Can An Employer Agree Not To Contest Unemployment Benefits?

The Minnesota legislature recently passed a law that prevents employers and former employees from enforcing agreements in which the employer agrees not to contest the former employee’s eligibility for unemployment benefits.  The legislation revised Minn. Stat. § 268.192 to provide that:

An employer may not make an agreement that in exchange for the employer agreeing not to contest the payment of unemployment benefits, including agreeing not to provide information to the department, an employee will:

(1) quit the employment;

(2) take a leave of absence;

(3) leave the employment temporarily or permanently; or

(4) withdraw a grievance or appeal of a termination.

See S.F.No. 2224.  The legislation further states that “[a]n agreement that violates this subdivision has no effect under this chapter.”  The law took effect on July 1, 2012.

Takeaway:  Under Minnesota law, agreements by an employer not to contest a former employee’s eligibility for unemployment benefits are now unenforceable.