California employees who voluntarily leave their job with “good cause” as defined by the applicable regulation are entitled to unemployment benefits. “Good cause” includes leaving for compelling reasons, whether or not work-related, that “would cause a reasonable person genuinely desirous of retaining employment to leave work under the same circumstances.” Whether the employee had good cause to leave generally is decided on the facts at the time the employee left work.
The employee has a duty to preserve the employment relationship before voluntarily leaving, for example by giving their employer a chance to remedy the problem or by seeking a leave of absence.
In Johar v. California Unemployment Insurance Appeals Board, the California Court of Appeal recently held that an employee who left work to care for a severely ill relative with the employer’s blessing could not be deemed to have left work voluntarily without good cause where the employee had not positively repudiated the employment relationship while she was gone.
Background
In April 2019, Reena Johar ed Success Water Systems (SWS) as a sales representative. SWS sells water filtration equipment to residential customers.
With the of her supervisor Mari Lynn Johnson, Johar took leave to go to Chicago to care for her terminally ill grandmother on October 23, 2019. While Johar was in Chicago, she received inquiries from Johnson about pending SWS matters and about her expected return date. Johar replied that she would respond when the emergency with her grandmother ended.
When Johar returned to California in early November, SWS gave Johar no further sales appointments. On Nov. 5, SWS sent Johar what SWS later characterized as a “final check.” Johar nonetheless believed her employment was ongoing because extended gaps between sales appointments were not unusual. Johar continued to field inquiries from prospective SWS customers.
On Feb. 2, 2020, when Johar had received no further sales appointments, she filed a claim for unemployment benefits with the state Employment Development Department (EDD). Johar labeled the loss of her job a “temporary layoff.” SWS responded to EDD’s notice of Johar’s claim by checking the “Voluntary Quit” box.
The EDD determined that SWS had approved Johar’s absence to care for her grandmother in Chicago, but that Johar was disqualified from receiving unemployment benefits because she had overstayed her leave, failed to communicate with her supervisor while gone, and failed to take steps to retain her job when she returned. The California Unemployment Insurance Appeals Board upheld the EDD order.
The court of appeal rules in Johar’s favor
The court of appeal reversed, concluding Johar was entitled to unemployment benefits. A claimant leaves her job with “good cause” under the regulations where the claimant’s presence is needed to care for a seriously ill relative and the claimant has taken reasonable steps to preserve the employment relationship.
The court of appeal determined Johar had voluntarily left her job for good cause when she went to Chicago with Johnson’s approval to care for her sick grandmother. The court of appeal concluded that Johar had taken adequate steps to preserve her employment with SWS before leaving for Chicago. “There was no evidence that, when Johar left, SWS had an established leave of absence policy which Johar knew or should have known, and simply ignored.”
The decisive question was whether Johar had ever clearly indicated she intended to abandon her job while she was gone. The court of appeal concluded she had not. Johar’s silence in response to Johnson’s requests for a specific return date while Johar was in Chicago was not enough to show Johar positively repudiated her future duty to return to her job
The court of appeal said it might have ruled differently had Johnson “set a date certain in advance of Johar’s departure – which, as Johar’s supervisor, she had the prerogative to do – and if Johar had then failed to report for duty in defiance of that directive or failed to request extended leave when the expected return date arrived.”
How employers can minimize unemployment insurance contributions
The ruling affected SWS’s annual contribution to the unemployment insurance fund. The amount of that contribution is based on an employer’s “experience rating”, including how much the employer’s reserve has been charged for unemployment benefits from departing employees who assert claims. In an information sheet, the EDD explains: “An employer who maintains a stable workforce, while filing and paying taxes on time, generally has a lower UI rate. An employer who experiences high turnovers, large fluctuations in payroll, and/or files and pays taxes late will have a higher rate.”
EDD suggests employers may limit their UI contribution by working with employees to avoid layoffs and voluntary quits, granting leaves of absences, and giving and retaining written warnings before terminating employees for misconduct.
Dan Eaton is a partner with the San Diego law firm of Seltzer Caplan McMahon Vitek where his practice focuses on defending and advising employers. He also is an instructor at the San Diego State University Fowler College of Business where he teaches classes in business ethics and employment law. He may be reached at [email protected]. His Twitter handle is @DanEatonlaw
