ST. PAUL, Minn. – In a ruling short on remuneration but long on potential impact, a state appeals court this week ordered the Minnesota Department of Employment and Economic Development to pay a former branch manager at Greater Minnesota CU $10,000 in back unemployment benefits even though she was fired for her role in causing the credit union as much as $550,000 in losses.
The case is of broad interest despite its small monetary award because it raises the issue of entitlements in firings, according to Howard Bolter, a local attorney who represented the ex-manager, DiAnne Bean, in the case. “Under Minnesota law you are entitled to unemployment benefits unless you do something egregious to deserve being fired, like engaging in gross negligence or if you tell the boss to go ‘F’ himself. Then, you are not entitled to unemployment benefits,” Bolter told Credit Union Journal yesterday.
Bean was hired by the credit union in 2005. One of her duties was to conduct regular reviews of autos at a local dealership to ensure they retained their value and the credit union’s collateral interest. As instructed by one of the credit union’s commercial loan officers, instead of reviewing all the vehicles on a regular basis, she conducted spot checks. The credit union had no written procedure for the vehicle checks.
When it turned out the dealer, who had borrowed $750,000 from the credit union, had used the vehicles to secure loans from other lenders as well, the credit union ended up losing as much as $550,000.
On Nov. 24, 2008, Bean was fired for failing to properly perform floor plan inspections, thereby causing a loss to the credit union.
The Department of Employment and Economic Development, which disperses unemployment benefits collected from Minnesota employers, ruled that Bean had been discharged for employment misconduct and was therefore ineligible for unemployment benefits. The ruling was upheld by an administrative law judge.
Bean argues that she did not commit employment misconduct when she began spot checking the vehicles, and therefore is entitled to unemployment benefits.
The appeals court sided with the former branch manager, noting that Greater Minnesota CU did not view Bean’s conduct as a firing offense until it suffered the losses. “They took a big hit, and because they took a big hit they tried to take it out on her,” said Bolter. “The question is whether she acted as a reasonable person what have acted.”
Bolter said though small in monetary amount – it represented about four-and-a-half months of unemployment for Bean – the case is important because it sets some parameters for unemployment disputes.
An attorney for the state department did not return a phone call seeking comment.
