Official Publication of the Minnesota State Bar Association

Vol. 62, No. 5| May/June 2005
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Tips & Traps

Unemployment Compensation.  A discharged employee may be eligible for unemployment compensation benefits, despite wrongful behavior, if the aberrant action constitutes an isolated and inconsequential incident.  The Minnesota Unemployment Compensation law, Minn. Stat. §268.095, Subd. 6, was amended by the Legislature in 2003 to reincorporate an exception for disqualification from unemployment benefits for a “single incident” of misbehavior.  Under prior case law, an employee who was fired for engaging in workplace misconduct was eligible for unemployment benefits if the incident underlying the discharge was a single spasm uncharacteristic of the employee’s overall work performance, Tilseth v. Midwest Lumber Co., 204 N.W.2d 644 (Minn. 1973).  This “hot headed” doctrine was abrogated by the Legislature in 1998.  See Isse v. Alamo Rent-A-Car, 590 N.W.2d 137, 139-40 (Minn. App. 1999). But the Legislature in 2003, amended the law to allow eligibility for benefits if the employee engages in a “single isolated incident that does not have an adverse impact on the employer.”  See Grivna v. Riverside Dental Clinic, P.A., 2004 wl 2049996 (Minn. App. 09/14/04). 

Claimants seeking unemployment compensation benefits under the “single incident” exception should strive to show that the employee has had a good work record over a long period of time, that the behavior was uncharacteristic of the employee’s overall work performance, and that the incident did not have any negative repercussions upon the business.  Employers can counter by demonstrating prior misbehavior by the employee, coupled with the detrimental impact of the incident upon the employer’s business activities.

Marshall H. Tanick
Mansfield, Tanick & Cohen, PA

Criminal (DWI).  Beware the late-night call from a client who needs advice after being arrested for a possible DWI.  The person needs some sound advice about the consequences of either taking or refusing an alcohol test.  Minnesota’s DWI law is ever-changing and has become a highly specialized practice area, so it is not wise to simply advise someone to take the test after hearing only minimal information.  For a first-time offender who has a strong likelihood of testing at .20 or higher, refusing the test (and thereby preserving the opportunity to get a drastically shorter license revocation period and to avoid a license plate impoundment) may be the better choice.  Although it’s a crime to advise someone to refuse the test, you can describe the consequences of refusal and let them make their own decision.  For someone who is not a first-time offender, taking the test is usually the best option.  Ideally, you should advise the person to call an attorney who has experience with dwi defense rather than attempting to give them advice off the cuff. 

Derek Patrin
Meaney & Patrin, pa


Auditor’s Inquiries
Responding to letters from your client’s auditor is an art and a science.  Improperly drafted responses may lead to liability for the attorney to third parties and may lead to difficulties with the sec where the client is a publicly traded company.  The existence of insurance for the claim(s) being reported is not likely to reduce the exposure of the attorney for an improperly drafted response.  See Allen, “Navigating the Minefield: Ethical and Liability Risks in Auditor Response Letters after Sarbanes Oxley,” The Brief (Winter 2005)

There is a “treaty” that was entered in to between the aba and the aicpa entitled “The American Bar Association Statement of Policy Regarding Lawyers’ Responses to Auditors’ Requests for Information (Dec. 1975) that can limit the exposure of an attorney responding to an auditor’s inquiry.  The aba’s Statement of Policy can be downloaded at 5070426i/secure.html

In order to insure uniform responses to auditor response letters, law firms should designate an “Auditor Response Partner” who agrees to monitor and cosign all letters responding to auditors’ requests for information. 

Michael J. Ford
Quinlivan & Hughes
St. Cloud


Arbitration Agreements.  With over 26 million employees in the U.S. subject to binding employment arbitration agreements, employers may question whether arbitration agreements can be included in employee handbooks.  If an employment arbitration agreement is contained only in a handbook, employees may express concern that they were not aware of any arbitration policy and that consent was not voluntary.  Also, the employee handbook may affirm the “at will” employment relationship and state that no contract is created with the employee.  Further, where the employer reserve the right to change the terms of a handbook, an arbitration agreement contained solely in the handbook may appear to be an illusory contract that is not binding. Employers who wish to implement employment arbitration should consider having separate, stand-alone arbitration agreements with employees. 

Darin T. Allen
National Arbitration Forum