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.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on July 18, 2012, in Unemployment Insurance Benefits and tagged . Bookmark the permalink. Leave a comment.

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