This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).






Thomas M. Hagel,


TCR Corporation,

Commissioner of Employment and Economic Development,


Filed April 20, 2004

Reversed and remanded

Minge, Judge


Department of Employment and Economic Development

File No. 8423 03



Thomas M. Hagel, 4746 Aldrich Avenue North, Minneapolis, MN 55430-3529 (pro se relator)


TCR Corporation, 1600 67th Avenue North, Minneapolis, MN 55430-1742 (employer)


Lee B. Nelson, M. Kate Chaffee, 390 North Robert Street, St. Paul, MN 55101 (for respondent Department of Employment and Economic Development)


            Considered and decided by Kalitowski, Presiding Judge; Shumaker, Judge; and Minge, Judge.

U N P U B L I S H E D  O P I N I O N


MINGE, Judge


            Relator appeals the determination of the commissioner’s representative that he was discharged for misconduct and disqualified from receiving unemployment benefits.  Because the commissioner’s representative did not apply the statutory definition for employment misconduct in effect at the date of relator’s discharge, we reverse and remand.  Because it appears that the record is incomplete and that the interests of justice would be served, we direct that on remand the commissioner’s representative consider whether a further evidentiary hearing is appropriate. 



            Relator Thomas Hagel, a machinist employed by TCR Corporation, was terminated on April 11, 2003, for refusing to sign an amendment to an action plan designed to address his status as a problem employee.  At the August 5, 2003, hearing, the commissioner’s representative applied a revised definition of employment misconduct that had become effective August 1, 2003.  See 2003 Minn. Laws 1st Spec. Sess. ch. 3, art. 2, §§ 13, 20(g); see Minn. Stat. § 645.02 (2002) (establishing an effective date of August 1 for all laws unless otherwise provided by the legislation).  Using this revised definition, the commissioner’s representative found that relator’s failure to sign the amendment constituted employment misconduct and disqualified relator from unemployment benefits. 

            Decisions of the commissioner’s representative are accorded particular deference.  Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995).  Whether an employee has engaged in conduct that disqualifies him from unemployment benefits is a mixed question of fact and law.  Schmidgall v. FilmTec Corp., 644 N.W.2d 801, 804 (Minn. 2002).  A determination of the commissioner’s representative regarding the reasons for an employee’s separation is a factual determination that is to be reviewed in the light most favorable to the decision and may not be disturbed if there is evidence reasonably tending to sustain the finding.  Markel v. City of Circle Pines, 479 N.W.2d 382, 383-84 (Minn. 1992).  But whether the acts constitute misconduct is a question of law that we review de novo.  Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).  The interpretation of a statute is also a question of law that this court reviews de novo.  Homart Dev. Co. v. County of Hennepin, 538 N.W.2d 907, 911 (Minn. 1995).  Therefore, we review de novo the decision of the commissioner’s representative to use the amended statutory language to determine whether there was misconduct that justified a discharge occurring prior to the effective date of the statute.  See In re Welfare of B.C.G., 537 N.W.2d 489, 490 (Minn. App. 1995).


            An employee discharged for employment misconduct is disqualified from receiving unemployment benefits.  Minn. Stat. § 268.095, subd. 4(1) (2002).   In 2002, the definition of employment misconduct was as follows:

(a)  Employment misconduct means:

(1) any intentional conduct, on the job or off the job, that disregards the standards of behavior that an employer has the right to expect of the employee or disregards the employee’s duties and obligations to the employer; or

(2)  negligent or indifferent conduct, on the job or off the job, that demonstrates a substantial lack of concern for the employment.

(b)  Inefficiency, inadvertence, simple unsatisfactory conduct, poor performance because of inability or incapacity, or absence because of illness or injury with proper notice to the employer, are not employment misconduct.


Minn. Stat. § 268.095, subd. (6)(a), (b) (2002) (amended 2003).  The definition was amended effective on August 1, 2003.  2003 Minn. Laws 1st Spec. Sess. ch. 3, art. 2,     §§ 13, 20(g); see Minn. Stat. § 645.02 (2002).  Employment misconduct was redefined as follows:

(a)  Employment misconduct means any intentional, negligent, or indifferent conduct, on the job or off the job (1) that evinces a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee, or (2) that demonstrates a substantial lack of concern for the employment.

            Inefficiency, inadvertence, simple unsatisfactory conduct, a single incident that does not have a significant adverse impact on the employer, conduct an average reasonable employee would have engaged in under the circumstances, poor performance because of inability or incapacity, good faith errors in judgment if judgment was required, or absence because of illness or injury with proper notice to the employer, are not employment misconduct.


Minn. Stat. § 268.095, subd. (6)(a) (Supp. 2003).


            Relator was discharged prior to August 1, 2003, but the commissioner’s representative applied the 2003 statutory language.  Respondent states in its brief that since August 1, 2003, the department has consistently applied the new definition to all cases decided by adjudicators, unemployment law judges, and commissioner’s representatives, regardless of when the events occurred.  Respondent argues that “[w]hile such adjudications necessarily depend upon past facts and evidence, the issue under consideration, to which the amended definition applies, is whether this applicant is eligible at the time of the particular adjudication for benefits.” 

The rule in this state is that “[n]o law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature.”  Minn. Stat. § 645.21 (2002).  Courts do not favor retroactive application of statutes.  Am. Family Ins. v. Metro. Transit Comm’n., 424 N.W.2d 825, 827 (Minn. App. 1988).  There is no indication that the legislature intended that this amendment to the unemployment laws be retroactive.  Cf. Marose v. Maislin Transp., 413 N.W.2d 507, 511-12 (Minn. 1987) (citing example of retroactive intent where legislature provided that the changes in workers’ compensation were effective for all cases pending on a particular date, regardless of date of injury, hearing, or appeal, as well as providing that all workers’ compensation judges shall apply changes on or after effective date).

            We find that the application of the amended 2003 employment misconduct definition to discharges occurring prior to the amended statute’s effective date is erroneous as a matter of law.   The precise issue being appealed must be ascertained to determine which version of the law should be applied.   If the initial eligibility is at issue, the law in effect on the date the applicant was terminated applies.  If the applicant’s continued eligibility is at issue, a different cut-off date may apply because the applicant must show eligibility for each week the benefits are sought.  Because relator is appealing the initial decision that he was discharged for employment misconduct, and not his continued eligibility, the statutory definition in effect when he was discharged applies.     

To constitute misconduct under the 2002 version of the statute, the “conduct must (1) be intentional and (2) disregard standards of behavior the employer has a right to expect or the employee’s duties and obligations to the employer.”  Houston v. Int’l Data Transfer Corp., 645 N.W.2d 144, 149 (Minn. 2002).  “[T]he word ‘disregard’ includes intent that is separate and distinct from the intent to engage in the conduct in question.”  Id. at 150.  Here, the commissioner’s representative emphasizes that the 2003 legislative change was designed to reject Houston’s subjective definition of misconduct and apparently determined that this was significant in this case.  Relator argues that his refusal to sign an amendment to an employee-improvement agreement was not misconduct.  Because we cannot determine whether the commissioner’s representative might have reached a different outcome under the 2002 law, we reverse and remand for consideration under the 2002 version of the statute. 


            Having decided to remand for a decision under the applicable version of the statute, we note that this case raises the potentially difficult and troubling issue of whether it is employment misconduct for an employee to refuse to admit a disputed claim of misconduct to avoid dismissal.  The facts of this case and the limited evidence are troubling.  Relator initially signed an agreement stating that he would improve certain areas of his performance.  After several weeks the employer reviewed his performance, found unacceptable progress in certain areas, and presented relator with an amendment to the original plan stating specific instances in which relator had failed to meet expectations.  In Vargas v. Northwest Area Foundation, 673 N.W.2d 200 (Minn. App. 2004), this court affirmed the use of employment-improvement plans and held that an employee’s refusal to attempt performance of any part of the plan was employment misconduct.  In Vargas, the employee conceded that he refused to fully cooperate with his employer’s improvement plan.  Id. at 205.   

The present case differs from Vargas.  Although relator refused to sign the amendment, he signed the initial plan and was willing to continue working under the plan as amended.  The problem raised by the relator was that he believed that the incidents cited in the amendment that allegedly demonstrated his failure to meet the company’s expectations were not fairly and accurately presented.  Relator was faced with a dilemma: either admit mistakes which might constitute grounds for discharge even though he did not believe he had made those mistakes, or face discharge for failing to sign the admission.  We do not reach the issue of whether employers can place employees in such situations.  But we conclude that absent an opportunity to explain the circumstances of the incidents, employees should not be disqualified from benefits because they were forced to choose between confessing to disputed conduct that could be grounds for employment misconduct and refusing to sign, which could also be grounds for misconduct. 

            Here, relator did not present the full nature of the situation to the unemployment law judge.  Thus, there is no explanation of how the amendment letter misrepresented the incidents.  Although relator offered his explanation to the commissioner’s representative, it was not a part of the record and the representative did not consider this information.  Pursuant to Minn. Stat. § 268.105, subd. 2(c), (d) (2002), we find that on remand, the commissioner’s representative should address whether the record regarding this issue is incomplete as it currently exists, whether application of the 2002 statute leads to a different result, and whether in the interest of justice, the matter should be remanded to an unemployment law judge for the taking of additional evidence. 

            Reversed and remanded.