Opinion
No. A04-819.
Filed February 1, 2005.
Appeal from the Minnesota Department of Employment and Economic Development, File No. 2037 04.
Amy Blythe Mohberg, Central Minnesota Legal Services, St. Cloud, Mn, (for relator)
Jessica N. McKinney, Strommen Building, St. Paul, Mn, (for respondent Yellow Taxi Service)
Lee B. Nelson, Department of Employment and Economic Development, St. Paul, Mn.
Considered and decided by Kalitowski, Presiding Judge; Lansing, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Relator challenges the decision of the commissioner's representative that she quit her employment without good reason attributable to the employer and is, therefore, disqualified from receiving unemployment benefits. We reverse.
FACTS
In 1995, relator Lois Thoreson began working as a full-time dispatch communications room manager for her former employer, Wayne Joyce. In December 2001 and December 2002, Thoreson received a year-end payment of $6,000 from Joyce. In 2001, this payment was characterized as a "bonus," but in 2002, Thoreson and Joyce considered the $6,000 payment to be part of her salary.
On July 1, 2003, Joyce sold the business to Bander Al-Harthy, owner of respondent Yellow Taxi Service Corporation. Thoreson continued in her position as a dispatch communications room manager from July 1, 2003, to December 26, 2003. When Al-Harthy took over the business, he was aware that Thoreson had previously received $6,000 year-end payments that were not based on her performance. According to Mildred Joyce, the former owner's wife, she discussed the payments with Al-Harthy several times, and he told her that everything would "stay the same" under the new ownership.
In mid-July 2003, Thoreson met with Al-Harthy to discuss the terms of her continued employment. According to Thoreson, she and Al-Harthy discussed the $6,000 year-end payments, and Al-Harthy told her that it "was not a problem" and that "nothing would change." Jerome Joyce, another employee present during this meeting, also testified that Al-Harthy told them that "everything would stay the same," including their year-end payments. Al-Harthy admitted that during this meeting, Thoreson told him she expected her $6,000 payment at the end of 2003. But Al-Harthy testified that he told the employees that he "would pay them [the $6,000], but it's going to be dependent on their performance by the end of the year." Thoreson denies that Al-Harthy ever told her that the year-end payment would be conditional.
Thoreson testified that between July and October 2003, she began to doubt whether Al-Harthy would honor the $6,000 year-end payment. To address this issue, Thoreson began leaving messages with Al-Harthy in early December, but he did not respond. On December 18, 2003, Thoreson sent Al-Harthy a letter stating that in the past, she had received her $6,000 year-end payment on December 20, but because that date would fall on a weekend, she would be willing to wait until December 22, 2003, to receive the payment. Al-Harthy did not respond to the letter, and Thoreson did not receive a payment on December 22.
According to Thoreson, she and Al-Harthy then scheduled a meeting for December 23, 2003, to discuss the year-end payment. Thoreson testified that Al-Harthy did not show up for this meeting, and she could not reach him on his cell phone. Al-Harthy, on the other hand, testified that he and Thoreson agreed to discuss the issue on December 24 during Thoreson's scheduled shift, but Thoreson did not show up for work. Thoreson denied that a meeting was ever scheduled for December 24 and testified that she was at work that day.
Thoreson formally resigned from her employment on December 26, 2003. The parties do not dispute that Thoreson quit and that she was never paid a $6,000 year-end payment. Furthermore, Al-Harthy testified that he did not intend to pay Thoreson the year-end payment of $6,000 because of her "performance."
Thoreson subsequently established an unemployment benefit account with the Department of Employment and Economic Development (department). The department initially determined that Thoreson quit without good reason caused by her employer and was, therefore, disqualified from receiving benefits. Thoreson appealed, and following a hearing, an unemployment law judge affirmed the decision. Thoreson then appealed to the commissioner's representative, who also affirmed the decision. This appeal followed.
DECISION
In unemployment cases, we review the record to determine whether it reasonably supports the decision of the commissioner's representative. Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995). While we defer to the commissioner's representative's findings of fact if the record reasonably supports them, similar deference is not afforded questions of law. Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989). Whether an employee had good cause to quit is a question of law, which we review de novo. Peppi v. Phyllis Wheatley Cmty. Ctr., 614 N.W.2d 750, 752 (Minn.App. 2000).
An employee who voluntarily terminates his or her employment is disqualified from receiving unemployment benefits unless he or she "quit the employment because of a good reason caused by the employer[.]" Minn. Stat. § 268.095, subd. 1(1) (Supp. 2003). "Good reason" is defined as an action by the employer "(1) that is directly related to the employment and for which the employer is responsible" and "(2) that is significant and would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment." Minn. Stat. § 268.095, subd. 3(a)(1), (2) (Supp. 2003). Thoreson argues that Al-Harthy's promise to continue paying her the $6,000 year-end payment was part of her employment agreement and that his failure to fulfill this promise constitutes a substantial breach of the agreement, giving her good cause to quit attributable to her employer. We agree.
The revisor of statutes inadvertently substituted the term "ineligible for" for the term "disqualified from" in Minn. Stat. § 268.095, subds. 1, 4, 7, 8(a) (Supp. 2003). See Minn. Stat. § 268.095, subds. 1, 4, 7, 8(a) (2002) (using term "disqualified from"); 2003 Minn. Laws 1st Spec. Sess. ch. 3, art. 2, § 11 (making other changes to Minn. Stat. § 268.095, subd. 1, but retaining term "disqualified from"); 2003 Minn. Laws 1st Spec. Sess. ch. 3, art. 2, § 20(j), (k) (directing revisor to change the term "disqualified from" to "ineligible for" only in Minn. Stat. § 268.095, subd. 12, and then to renumber to Minn. Stat. § 268.085, subd. 13b).
We have held on several occasions that when an employer breaches a term of an employment agreement, good reason to quit exists. See, e.g., Hayes v. K-Mart Corp., 665 N.W.2d 550, 552-53 (Minn.App. 2003) (employer breached promise to give employee raise), review denied (Minn. Sept. 24, 2003); Helmin v. Griswold Ribbon Typewriter, 345 N.W.2d 257, 261-62 (Minn. App. 1984) (employer failed to notify employee of cancellation of company's health insurance policy), review denied (Minn. June 12, 1984). This rule applies regardless of whether the agreement is oral or written. See Krantz v. Loxtercamp Transp., Inc., 410 N.W.2d 24, 27 (Minn.App. 1987) (holding that employer's breach of oral promise that employee would not have to work weekends constitutes good cause for employee to quit); Baker v. Fanny Farmer Candy Shops No. 154, 394 N.W.2d 564, 566 (Minn.App. 1986) (holding that employer's violation of oral "understanding" that employee would not have to work nights gives employee good cause to quit).
The commissioner's representative found that Thoreson "had been paid a $6,000 balloon payment in addition to her base salary by the end of the calendar year by the previous owner" and that she "expected her pay structure would continue under the new ownership." He also found that Thoreson sent Al-Harthy "a letter stating she expected to be paid the $6,000 balloon payment by December 22, 2003, two days after the last regular scheduled pay date of the calendar year." The testimony of Thoreson, her former employer and his wife, and a coworker amply supports these findings.
Furthermore, the record demonstrates that Thoreson's expectation was based on an express agreement with her employer. Thoreson testified that her previous year-end payments were part of her salary, were paid by December 20, and were not conditioned on her performance. Thoreson, her coworker, and her former employer's wife testified that Al-Harthy specifically agreed that the employees' compensation, including their year-end payments, would remain the same under the new ownership. There is no dispute that Thoreson did not receive the $6,000 payment before she quit on December 26, and Al-Harthy testified that he did not intend to pay it. Because the record establishes that an employment agreement was made, and that Al-Harthy breached that agreement, we conclude that the commissioner's representative erred in determining that Thoreson quit without good reason caused by her employer. See Hayes, 665 N.W.2d at 553-54 (concluding that store manager's breach of oral promise to give employee pay raise gave employee good cause to quit attributable to employer). Consequently, we need not address whether the wage reduction was "substantial." See id. at 554 (recognizing that while true that substantial wage reduction can also constitute good cause to quit attributable to employer, "the failure to honor the promise, and not the amount of financial loss . . . is the dispositive factor in determining whether there was a breach of the employment agreement").