September 24, 2010

HR policy development, part 2 of 3: policy violations as “misconduct” in unemployment cases

Posted in Breaks, Employee Handbooks, Misconduct, Smoking, Unemployment Benefits tagged , , , , , , at 9:24 am by Tom Jacobson

In the first of this three-part series, I highlighted the case of Cross v. Prairie Meadows ( where the employer’s well-written policies were a key reason why the court threw out a sexual harassment lawsuit against the company. In this installment, the issue is how well-written policies can help show that an employee committed employment misconduct which disqualifies him/her from unemployment benefits; the case is Gaustad v. Minnesota Department of Employment and Economic Devlopment (

In the Gaustad case, Jon Gaustad worked for Innova Industries, Inc.  Innova had a very clear work break policy; breaks were strictly regulated in order to manage work flow.  Innova also had a strict no-smoking policy inside its plant and a clear designation of where smoking was permitted outside the plant.  Both policies were plainly stated in the company’s employee handbook.  The smoking policy, which had been adopted after a discarded cigarette butt caused a serious plant fire, was also posted in the employee break room, and it had been handed out to employees.

After two prior warnings about violating the company’s smoking and break policies, Gaustad was fired for a third violation.  Gaustad filed for unemployment.  His claim made its way to the Minnesota Court of Appeals, and the court ultimately rejected it. 

The court initially noted that when an employee refuses to abide by an employer’s reasonable policies, the employee commits employment misconduct and is disqualified from unemployment benefits.  The court also noted that an employer’s policies are reasonable when the employer can articulate or identify purposes which further a legitimate employer interest.

In this case, the court concluded that Innova’s policies were indeed reasonable because the break policy was needed to aid the manufacturing process, and the smoking policy was needed due to the prior fire.  Because Gaustad deliberately and knowingly violated those policies, the court determined that his actions were misconduct.

Just as Cross v. Prairie Meadows highlights the importance of having a well-written sexual harassment policy, Gaustad v. Minnesota Department of Employment and Economic Devlopment points out that reasonable personnel policies (that is, policies that  further a legitimate employer interest) can provide the foundation for defining employment misconduct for the purposes of a Minnesota unemployment claim.

Next in this series:  leave policies under the FMLA and USERRA.

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.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: