Eligibility For Unemployment Compensation Benefits In A “Resign Or Be Fired” Scenario In Nevada

Section 612.380 of the Nevada Revised Statutes generally provides that an individual is ineligible to receive unemployment compensation benefits where the person has voluntarily left his or her employment. On May 3, 2018, in the case of Dolores v. State, Dep’t of Employment Sec. Div., the Supreme Court of Nevada determined that an employee’s resignation, when presented the option to “resign or be fired,” constitutes a truly voluntary resignation thus rendering the person ineligible to receive unemployment compensation benefits.

In the case, Plaintiff worked as an airline ground agent for over seven years. The Transportation Security Administration (TSA) requires airport employees to wear a security badge that must be renewed every year. In July 2015, TSA altered its badge policy and, under the new policy, TSA improperly confiscated Dolores’ badge based on a misunderstanding of a previous criminal conviction. Dolores contested the revocation and his airline employer gave him ten days to resolve the matter. When the time lapsed and he had not been reissued a security badge, the airline employer informed Dolores that he could either resign or be fired. Dolores subsequently resigned and thereafter filed a claim for unemployment compensation benefits, which was denied pursuant to NRS 612.380 on the grounds that Dolores voluntarily resigned.

Because Nevada had not yet defined “voluntary” for the purposes of determining eligibility for unemployment benefits, the Supreme Court looked to other sources that have defined such voluntariness as “a decision to quit that is freely given and proceeding from one’s own choice or full consent.”  In this instance, the Supreme Court was faced with the issue of whether the “resign or be fired” ultimatum effectively destroys the voluntary nature of any such resignation. The Nevada Supreme Court ultimately adopted the legal analysis from several Minnesota Courts of Appeals in holding that “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.”

In this case, Dolores testified that he resigned because he lost his security badge, to maintain his vacation pay and profit sharing benefits, and because he did not want to wait for the union to clear his case. Dolores’ voluntary decision to forego the process to resolve this issue through his union demonstrated to the Supreme Court that his resignation was a conscious decision that was freely given by his own choice. Thus, Dolores voluntarily resigned his employment as contemplated by NRS 612.380 and is ineligible to receive unemployment compensation benefits.

For more information about the case and its potential impact, contact Paul Ballou in LGC’s Las Vegas office.