Dolores v. State Employment Security Division, 134 Nev.Adv.Op. 34, 416 P.3d 259 (Nev. 2018).

Recently, the Nevada Supreme Court tackled a question of first impression related to unemployment benefits: Does an employee voluntarily resigns when the employer gives an ultimatum, quit or be fired? The Court unanimously ruled the resignation is voluntary, precluding unemployment benefits. Of course, the Court’s decision is not as black and white as it first appears.

Background

Eugenio Dolores worked as a ground agent for an airline at the Las Vegas Airport and was part of a union. Mr. Dolores’ duties at the airport required a security badge from the Transportation Security Administration (TSA). After TSA altered its security badge background criteria, TSA mistakenly revoked Mr. Dolores security badge based on a misunderstanding about a previous criminal conviction.

After learning of this, Mr. Dolores’ employer gave him ten days to clear up the matter and obtain a new security badge. The ten days passed, but the issue was still not resolved, and Mr. Dolores knew it would be a long process to do so. Mr. Dolores’ employer then gave him an ultimatum: you can quit or we will fire you. Mr. Dolores considered his options, understanding if he quit, he got to retain his vacation pay and profit sharing benefits. Mr. Dolores also “did not want to wait for the union to clear his case.” Faced with this resign-or-be-fired option, Mr. Dolores tendered a resignation letter.

Following his resignation, Mr. Dolores sought unemployment insurance benefits with the Employment Security Division (ESD). After reviewing his case, the ESD denied Mr. Dolores benefits, finding he voluntarily resigned without good cause and is not eligible for benefits under NRS 612.380, the statute governing unemployment benefits. Mr. Dolores appealed the ESD’s decision to the Nevada district court; however, the district court denied judicial review of the decision so Mr. Dolores appealed to the Nevada Supreme Court.

A question of first impression

As mentioned earlier, the ESD found that NRS 612.380 precluded Mr. Dolores’ claim for unemployment benefits, which states in relevant part:

Except as otherwise provided in subsection 2, a person is ineligible for benefits for the week in which the person has voluntarily left his or her last or next to last employment:

(a) Without good cause, if so found by the Administrator, and until the person earns remuneration in covered employment equal to or exceeding his or her weekly benefit amount in each of 10 weeks.

Put differently, a person is ineligible for unemployment benefits if he or she voluntarily quits without good cause and until new employment is found and a certain amount of money is earned.

Although other states have dealt with the question of whether an employee voluntarily resigns when faced with the quit-or-be-fired ultimatum, the Nevada Supreme Court had never addressed this issue. After reviewing decisions in other jurisdictions, the Court adopted the Minnesota Court of Appeal’s analysis in similar cases. In these cases the Minnesota court found that when an employee chooses to resign instead of “exercise his right to have the allegations determined” or resigns “to protect his work record” rather than face termination, these actions are done voluntarily and without good cause. See Ramirez v. Metro Waste Control Comm’n, 340 N.W.2d 355, 357-58 (Minn. Ct.App. 1983); and Seacrist v. City of Cottage Grove, 344 N.W.2d 889, 891-92 (Minn. Ct.App. 1984).

Based on this reasoning, the Nevada Supreme Court held: “an employee presented with a decision to either resign or face termination voluntarily resigns under NRS 612.380 when the employee submits a resignation rather than exercising the right to have the allegations resolved through other available means.” The Court also stated: “We hold that where the record shows that the appellant’s decision to resign was freely given and stemming from his own choice, such a resignation is voluntary pursuant to NRS 612.380.”

After applying these new holdings to the facts in Mr. Dolores’ case, the Court determined he voluntarily quit his job with the airline without good cause. Mr. Dolores knew he had an appeal procedure available to him through the union and other avenues, but he “consciously chose” to forgo those options. The Court also found it significant that Mr. Dolores weighed the benefits of quitting so he could keep his vacation pay and profit sharing benefits.

Significance

The impact of the Nevada Supreme Court’s decision here will be long reaching. Numerous unemployment insurance benefit claims are filed each year by applicants who resigned. Without any guidance in this jurisdiction as to the meaning of having “voluntarily left” under NRS 612.380, such cases have dragged on with applicants making a host of arguments for why their resignation was not actually voluntary.  This decision will narrow the field of arguments applicants can use and help ESD administrators.

The Court’s decision seems to address two different types of employment benefit situations, which both applied to Mr. Dolores. The first is a situation in which an employer has a procedure that must be followed before an employee is terminated, such as providing the employee a hearing or an appeals process. This is often the case where a union has an agreement with an employer. If an employee chooses to resign “rather than exercis[e] the right to have the allegations resolved through” these other means, the resignation was voluntary. Mr. Dolores ignored his union options.

The second situation is much broader and involves any situation in which the employee’s “decision to resign was freely given and stemming from his own choice.” Unfortunately, this broad language leaves the door open for the interpretation of what it means to “freely” give one’s resignation and what it means to “stem” from one’s own choice. Fortunately, this case seems to make it clear that quitting after being given the resign-or-be-fired choice is a voluntary choice and freely given.

One situation where a resignation may not be freely given is when an employee is threatened with something other than termination if the employee does not resign. However, the Court did not address these other scenarios in its opinion, and only time will tell whether the Court will have the opportunity to address these other scenarios in the near future.

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