June 9, 2010

When “may” means “must” in a progressive discipline policy, according to the Minnesota Court of Appeals

Posted in Contracts, Disclaimers, Employee Handbooks, Misconduct, Progressive Discipline, Unemployment Benefits tagged , , , , , at 11:19 am by Tom Jacobson

In a rare reversal of an unemployment law judge’s decision, the Minnesota Court of Appeals has ruled that despite an employee’s “ongoing attendance problems” which had resulted in warnings and a suspension, the employee did not commit employment misconduct, and he is, therefore, eligible for unemployment benefits.

At issue was the employer’s progressive discipline policy which said that for attendance problems, the employee “may” be disciplined in accordance with a schedule that progressed from an oral warning, to a written warning, to 3 and 10 day suspensions, and finally, termination.  The Court of Appeals rejected the argument that by using the word “may” in the policy, the employer retained the discretion to skip certain steps.  The Court reasoned that the employer’s only discretion was whether or not to discipline at all and that once it decided to discipline for the attendance problem, it had to follow each progressive step.  Because the employer in this case skipped the 10 day suspension and fired the employee, the Court ruled that the employee’s absenteeism was not employment misconduct.

The Court also rejected the argument that the employer’s obligation to follow the progressive discipline was nullified by a contractual disclaimer.  The Court noted that this argument might have been successful, but there was no evidence of any such disclaimer in the record.

The case, Stagg v. Vintage Place, Inc., highlights the importance of making sure that when employers want to maintain an at-will workforce, their employee handbooks must contain language that properly disclaims any contractual obligations and maintains the employer’s discretion regarding discipline and discharge policies and procedures.  It also points out how important it is to make sure that critical evidence is part of the record before an unemployment decision is appealed.

You can read this unpublished decision at http://www.lawlibrary.state.mn.us/archive/ctapun/1006/opa090949-0601.pdf.

The comments posted in this blog are for general informational purposes only.  They are not to be considered as legal advice, and they do not establish an attorney-client relationship.  For legal advice regarding your specific situation, please consult your attorney.

1 Comment »

  1. […] The Minnesota Supreme Court rarely considers claims for unemployment benefits.  That is because most unemployment claims are resolved at the administrative level or by the Minnesota Court of Appeals.  So, when the Supreme Court decides an unemployment case, it’s worth noting.  The Court did so on April 20, 2011, and the decision relates to my post last June regarding Stagg v. Vintage Place, Inc. (When “may” means “must” in a progressive discipline policy, according to the Minnesota Court…). […]

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