Settlement deal required resignation? No unemployment benefits for former employee

Workers whose employers make it unbearable to come to work are still eligible for unemployment compensation. That’s called constructive discharge. It essentially allows an employee to quit while arguing that her employer fired her, making her eligible for unemployment benefits.

But what about an employee who files an EEOC complaint alleging unbearable working conditions and then settles the case for a lump-sum payment in exchange for resigning? According to a recent Minnesota decision, that’s a voluntary resignation, blocking benefits.

Recent case: Wajiha worked as a Pearle Vision optician for several years, receiving Fridays off for religious reasons. When a new supervisor arrived on the scene, Wajiha found herself scheduled to work on a Friday. She protested to management and was removed from the Friday schedule. However, her supervisor soon scheduled her for another Friday. Wajiha again complained and was, again, removed from that scheduled day.

Wajiha filed an EEOC complaint alleging refusal to accommodate her religious needs and retaliation for complaining about the scheduling.

The complaint was settled with a payment of $25,000 in exchange for Wajiha’s resignation. She took the cash and then filed for unemployment compensation, arguing that she had been constructively discharged.

The Court of Appeals of Minnesota ruled she wasn’t eligible for the benefits because she had not been constructively discharged. Instead, she had accepted a payment in exchange for resignation. (Shah v. IMI’s of MN, No. A14-1250, Court of Appeals of Minnesota, 2015)