This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. ' 480A.08, subd. 3 (1994).


Susan M. Barrett


Northstar Guarantee, Inc.,
Commissioner of Economic Security,

Filed July 2, 1996
Harten, Judge

Department of Economic Security
File No. 7248UC95

Susan M. Barrett, 1889 Stanford Ave., St. Paul, MN 55105 (Pro Se)

Robert Zeglovitch, Daniel L. Palmquist, Leonard, Street & Deinard, P.A., 150 South Fifth St., Ste. 2300, Minneapolis, MN 55402 (for Respondent Northstar Guarantee, Inc.)

Kent E. Todd, Minnesota Department of Economic Security, 390 N. Robert St., St. Paul, MN 55101 (for Respondent Commissioner of Economic Security)

Considered and decided by Harten, Presiding Judge, Davies, Judge, and Willis, Judge.



The Commissioner's representative determined that relator Susan Barrett was disqualified from receiving reemployment benefits because she quit her job without good cause attributable to her employer. We affirm.


From June 17, 1991 to August 4, 1995, Barrett worked as a regulatory advisor for respondent Northstar Guarantee, Inc. (Northstar), a non-profit corporation administering a federal loan program under the Department of Education. Barrett monitored Northstar's compliance with government regulations and provided regulatory advice and assistance.

In December 1994, Barrett discovered during an audit that certain loan checks had not been cashed by their recipients within 120 days of issuance as required by regulation. Barrett determined that the resulting loss of the checks' federal loan guarantee gave rise to a potential lender liability of $150,000. On February 10, 1995, Barrett wrote a memorandum to Northstar's management stating her belief that Northstar was required to notify the lenders of the problem and to purchase the affected loans itself.

Northstar management disagreed. Instead, after disclosing the problem to the Department of Education, Northstar retained a consulting company to develop a new program for regulatory compliance. As part of the subsequent restructuring, Barrett's position was changed from Compliance Manager, reporting directly to Northstar's president and board of directors, to Senior Operations Regulatory Advisor, reporting to Northstar's chief financial officer and other vice-presidents. Barrett's salary and benefits remained the same. On August 4, 1995, Barrett resigned.

After a hearing, a reemployment insurance judge disqualified Barrett from receiving reemployment benefits, concluding that she voluntarily quit her job without good cause attributable to Northstar. The Commissioner's representative affirmed the disqualification. Barrett now brings this certiorari appeal, arguing that Northstar's purportedly illegal actions, its alleged retaliation against her for identifying the problem, and the change in her job constituted good cause for her resignation.


An individual is disqualified from receiving certain reemployment benefits if she "voluntarily and without good cause attributable to the employer discontinued employment with such employer." Minn. Stat. ' 268.09, subd. 1(a) (Supp. 1995). It is undisputed that Barrett quit her job voluntarily; the issue, then, is whether she quit for good cause attributable to Northstar. The test is as follows:

In order to constitute good cause, the circumstances which compel the decision to leave employment must be real, not imaginary, substantial not trifling, and reasonable, not whimsical; there must be some compulsion produced by extraneous and necessitous circumstances. The standard of what constitutes good cause is the standard of reasonableness as applied to the average man or woman, and not to the supersensitive.

Ferguson v. Department of Employment Servs., 311 Minn. 34, 44 n.5, 247 N.W.2d 895, 900 n.5 (1976). The employee bears the burden of showing that she quit for good cause. Marz v. Department of Employment Servs., 256 N.W.2d 287, 289 (Minn. 1977).

The Commissioner's representative ruled that Barrett did not meet her burden of showing good cause.

The narrow standard of review requires that findings [on this issue] be viewed in the light most favorable to the decision, and if there is evidence reasonably tending to sustain them, they will not be disturbed.

White v. Metropolitan Medical Ctr., 332 N.W.2d 25, 26 (Minn. 1983).

Resolution of conflicting testimony lies with the Commissioner. This court will not question the Commissioner's determination of credibility.

Nelson v. Bemidji Regional Interdistrict Council, 359 N.W.2d 38, 41 (Minn. App. 1984). Whether the employee is disqualified from receiving benefits is ultimately a question of law, however. Smith v. Employers' Overload Co., 314 N.W.2d 220, 221 (Minn. 1981).

Barrett asserts that she quit for good cause because she was compelled to acquiesce in Northstar's allegedly illegal conduct. See Hawthorne v. Universal Studios, Inc., 432 N.W.2d 759, 762 (Minn. App. 1988) (illegal conduct by employer may constitute good cause); Knutson v. DJM Transport, Inc., 413 N.W.2d 598, 601 (Minn. App. 1987) ("An employee who is instructed to engage in illegal and immoral conduct has good cause to quit * * *.").

At the hearing, Barrett alleged that Northstar violated applicable regulations by failing to stop payment on some loan checks 120 days after their issuance. Barrett conceded, however, that Northstar had satisfactorily corrected the problem to foreclose the possibility of future occurrences.

Barrett's main contention is that Northstar acted illegally in refusing to notify the lenders about the checks cashed after 120 days and the potential liability resulting from the loss of loan guarantees. The Commissioner's representative rejected this argument, finding that Northstar fully disclosed the problem to the Department of Education and that the Department, as the appropriate enforcement agency, would determine the actions required of Northstar regarding the potential liability.

We sustain the Commissioner's representative's findings on this issue. Northstar took action to correct the 120-day problem, and it retained outside consultants to set up a new compliance program. Northstar's newly-formed compliance committee decided that the potential liability was not sufficiently material to require that the lenders be notified because only 45 out of approximately 900,000 checks (0.005 percent) were involved. Northstar sent a letter to the Department of Education explaining the problem and declaring Northstar's intent not to purchase the particular loans from the lenders. The letter went on to state that Northstar's review of the circumstances surrounding the 45 checks yielded no evidence of possible fraud and that the purpose of the regulations was therefore not undermined.

Most importantly, Barrett did not point to any specific law or regulation requiring Northstar to notify the lenders or purchase the loans. Finally, the record contains evidence supporting the conclusion that Northstar reasonably reacted to the problem. Northstar acted with full disclosure to the agency responsible for enforcing the applicable regulations. [1] Northstar did not defraud the government, as Barrett contends. We conclude that Barrett was not compelled to acquiesce in any illegal act by Northstar.

The next issue is whether the change in Barrett's position constituted good cause attributable to Northstar. The Commissioner's representative found that Barrett's restructured position was "not substantially dissimilar" to her former position and therefore the change afforded Barrett no good cause to quit.

In Marty v. Digital Equip. Corp., 345 N.W.2d 773 (Minn. 1984), the claimant was given a new position at the same salary, but she refused the position because she felt that it offered less opportunity for advancement or higher pay in the future. Id. at 774. The supreme court noted that the claimant's new position was mostly clerical, while her former position required little such work. Id. at 774-75. Accordingly, the court held that the claimant's separation was for good cause because the new position was "not substantially equivalent" to her former position. Id. at 775. The court stated:

We have recognized that a claimant has a right to reject, without loss of benefits, a job which requires substantially less skill than she possesses.

Id.; see also Holbrook v. Minnesota Museum of Art, 405 N.W.2d 537, 539 (Minn. App. 1987) (shift without pay reduction to clerical positions from assistant curator position with limited clerical work constituted good cause), review denied (Minn. July 15, 1987); cf. Bestler v. Travel Co., 398 N.W.2d 611, 614 (Minn. App. 1986) (no good cause where Commissioner's determination that there was no appreciable difference between old and new positions was reasonably supported by employer's testimony that the new position did require the claimant's skill).

Barrett testified that she believed her new position was a lesser job. She testified that in her former position she was the person responsible for compliance activities. She stated that in her new position she could only give advice on compliance matters. Barrett basically felt stripped of her oversight duties.

The Commissioner's representative's finding that Barrett's job did not change substantially is reasonably sustained by the evidence. Barrett's salary and benefits did not change. Northstar's president testified that Barrett's primary responsibilities had been, and would continue to be, to advise Northstar's management about compliance issues and make recommendations. Under the restructuring, the audits would be performed by outside professional auditors. As the Commissioner's representative noted, there was insufficient evidence of how Barrett's day-to-day responsibilities would change in the new position. Barrett did not meet her burden of showing that her job changed substantially to one that required less skill than she possessed. Accordingly, we conclude that the change in position did not constitute good cause to quit.

Finally, Barrett contends that certain retaliatory actions by Northstar against her constituted good cause. Barrett alleges that Northstar retaliated against her because she identified the 120-day problem and the $150,000 potential liability, and because she had reported violations in the past. [2]

Barrett's primary contention is that she was not considered for the Compliance Director position because she identified the $150,000 potential liability. Barrett testified that she was told that she was not considered because of her disagreements with management regarding the liability issue. The Commissioner's representative specifically found that Northstar did not retaliate against Barrett for identifying the liability problem.

We uphold the finding on this issue. Northstar's management may have felt that Barrett's investigations exceeded the scope of her intended employment, but Barrett has not shown that Northstar retaliated against her for her identification of violations. Most telling was the testimony by Northstar's president that although Barrett did well at reading the regulations, she was not very good at determining what was material. Northstar's president also testified that Barrett acted as though she worked for the Department of Education rather than Northstar. The evidence generally suggests that Northstar declined to consider Barrett for the Compliance Director position because of the way she approached her job, the scope of which the employer had the right to define. Northstar obviously disagreed with Barrett about what steps were necessary to remedy the 120-day problem. We conclude that Barrett did not meet her burden of showing that Northstar's refusal to consider her for Compliance Director was an act of retaliation amounting to good cause to quit.

Barrett also alleges that when she accepted some additional responsibilities in 1993, she was told that she could expect an associated salary increase. When told later that no raise would be forthcoming, she relinquished the responsibilities. Barrett testified that a male employee then assumed those responsibilities and received a raise. In addition, Barrett alleges that she was the only exempt employee without job performance problems not to receive a raise in the final two years of her employment. Barrett argues that her failure to receive a raise and the gender discrimination in giving the other employee a raise were incidents of retaliation by Northstar for her reporting of violations.

The Commissioner's representative, however, specifically found that Barrett did not resign for these reasons. Barrett's letter of resignation and her hearing testimony identified the 120-day problem and the restructuring as her reasons for leaving. The hearing judge repeatedly asked Barrett to state specifically why she resigned, and Barrett generally responded that she did so because of Northstar's "illegal acts" and because Northstar retaliated against her in the restructuring. The finding that Barrett did not quit because of alleged discrimination or the failure to receive a pay increase is reasonably supported by the evidence. See Embaby v. Department of Jobs & Training, 397 N.W.2d 609, 611 (Minn. App. 1986) ("A Commissioner's representative's determination regarding the reason for an employee's separation is a factual determination.").

The Commissioner's representative also found that Barrett did not present sufficient evidence to support her retaliatory discrimination claims. There was no evidence about the male employee's other responsibilities and whether his raise was warranted. Northstar's president testified that in effect the only exempt employees who received pay increases either had been promoted or were technical employees. We hold that Barrett did not meet her burden of showing retaliation by Northstar amounting to good cause. [3]



[1]Barrett argues that Northstar sent its letter to the wrong person at the Department of Education; we conclude, however, that the Commissioner's representative's finding that Northstar properly notified the Department is supported by the evidence.

[2] Barrett claims that this retaliation constituted a breach of her employment contract because she had been assured that she would not suffer recrimination for reporting violations. See Baker v. Fanny Farmer Candy Shops #154, 394 N.W.2d 564, 566 (Minn. App. 1986) (breach of employment contract constitutes good cause).

[3] Barrett argues that the hearing judge improperly failed to make certain documents part of the record below. We emphasize that, in reaching our decision, we duly considered all relevant evidence properly introduced at the hearing.