The Minnesota Court of Appeals ruled today that a woman, who was encouraged by her boss to quit her job and become an independent contractor (self employed) instead, is entitled to unemployment benefits.
It's the case of Heather Rowan of Detroit Lakes, and it's the type of case that makes you wonder how many Heather Rowans are out there who gave up rather than fight the system.
Ms. Rowan was employed as a painter by a general contractor, Dream-It in Detroit Lakes, which cut her hours in 2009 and laid her off. Her employer suggested if she quit and formed her own LLC (limited liability corporation), she could get paid based on the amount of painting she did rather than on a per-hour basis and make back the money her reduced hours took away.
When she refused a job because she thought the per-square-foot painting payment amount -- $180 for a week --was too small, the company offered her no more jobs.
The state Department of Employment and Economic Development ruled her ineligible for unemployment benefit because self-employed workers aren't eligible. An unemployment law judge at first reversed the ruling, then ruled she not only was not eligible, but had to pay back more than $5,000 of unemployment benefits she received.
But today the Court of Appeals ruled she had good reason to quit and, thus, should be allowed to collect unemployment.
"Dream IT was responsible for encouraging Rowan to form her LLC because Herman (her boss) emphasized that she would not have to work as many hours to earn more money, but he did not inform her that, by so proceeding, she would no longer be eligible for unemployment benefits and that Dream It would not be required to offer her work," Judge Roger Klaphake wrote in today's decision.
The court said any reasonable employee would have felt compelled to quit in the same situation.
How does a person not know that forming your own business is risky and that your employer would not be obligated to hire you once you went independent? Maybe I'm too harsh but I don't agree with this ruling at all.
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Sounds to me like her employer encouraged her to quit to cut his own costs and not be responsible for her unemployment. I'm happy she won. In this economy, education doesn't tell the whole story. I know many people with degrees that cannot find work. And if you're talented in your own field, it's a shame to have to spend time and money learning another trade.