By Sarah Hegener Anglin, Esq.
Most employers require employees to agree to resignation before beginning settlement negotiations. A question arises as to whether the employee, who has voluntarily resigned, is subsequently entitled to draw unemployment benefits.
In Georgia, an employee is disqualified from receiving unemployment benefits if he voluntarily resigned from his employment without “good cause”. See, OCGA § 34-8-194. In this case, the employee carries the burden to prove that he resigned for a good reason. So what does this mean for an employee who resigned upon settling his workers’ compensation case? Is this considered resignation for “good cause” such that he will be entitled to receive unemployment benefits?
Georgia courts have not specifically addressed whether resignation as a pre-condition to a workers’ compensation settlement constitutes good cause. However, the courts have generally found that resignation for personal reasons, and not for reasons related to employment, do not constitute “good cause” within the meaning of the applicable statute.
Minnesota courts have directly addressed the issue. While these cases are not binding on Georgia employers, they provide some guidance as to how Georgia courts may rule if presented with a case on point.
The Minnesota Court of Appeals considered this issue most recently in a June 2019 case where an employee sustained a back injury on the job. He was working light duty in a position that accommodated his restrictions, but his pay was reduced and he was informed that he would not be eligible to receive periodic company-wide raises. The employee then settled his workers’ compensation case, and signed a voluntary resignation form. The Court concluded that the employee’s resignation was for “good cause” thus entitling him to unemployment benefits, based on the fact that his pay had been reduced and he would not be eligible for future pay raises. The court determined this was a good reason for the employee to agree to voluntary resignation upon settlement of his workers’ compensation case.
On the other hand, the Minnesota Court of Appeals held in a 2000 case that an employee who resigns as part of a workers’ compensation settlement, but who has the option of remaining employed and continuing to pursue a claim, does not quit for good reason for purposes of eligibility for unemployment benefits. The primary difference between this and the 2019 case is that the employee had light duty work available and his pay had not been reduced. He testified that he agreed to resign because he was eager to conclude his workers’ compensation claim. The court found that his resignation was for personal reasons, so he would not be entitled to unemployment benefits.
For Georgia employers, the takeaways are three-fold:
1. An employee is entitled to receive unemployment benefits if he resigns from his employment for “good cause.”
2. “Good cause” is subjective, but generally, if the employee resigns for personal reasons such as wanting to conclude his workers’ compensation claim when he has the option to continue pursuing the claim, his resignation was likely not “for good cause”.
3. If there are other economic factors affecting the employee’s income as a result of his workers’ compensation injury, such as reduced pay or job unavailability, the employee’s resignation was more likely “for good cause”. This is sometimes known as constructive termination.