Being Fired for a Report Is Not One of the Two Ways Minnesota Takes Unemployment Away — and Whatever the Judge Decides Cannot Be Used in Your Whistleblower Case

Two doors, and a report is not behind either of them

A Minnesota employee who is fired is ineligible for unemployment benefits on two grounds and no others. Minn. Stat. § 268.095, subd. 4:

An applicant who was discharged from employment by an employer is ineligible for all unemployment benefits according to subdivision 10 only if:

(1) the applicant was discharged because of employment misconduct as defined in subdivision 6; or

(2) the applicant was discharged because of aggravated employment misconduct as defined in subdivision 6a.

“Only if” is the operative phrase, and the definitions those two clauses point to are closed. Subdivision 6(e): “The definition of employment misconduct provided by this subdivision is exclusive and no other definition applies.” Subdivision 6a(c) says the same about aggravated employment misconduct. Chapter 268 then closes the back door in § 268.069, subd. 3: “There is no equitable or common law denial or allowance of unemployment benefits.”

Nothing in that structure lets a hearing turn on whether the employer thought you were disloyal, whether you went outside the chain of command, or whether you talked to a state agency. The definition of employment misconduct in subdivision 6(a) is one sentence about your conduct:

Employment misconduct means any intentional, negligent, or indifferent conduct, on the job or off the job, that is a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee.

The full treatment of that sentence, the ten exclusions in paragraph (b), the impaired-driving clawback in paragraph (c), and the single-incident rule in paragraph (d) is in unemployment misconduct in depth and is not repeated here.

The exclusions that a report or a refusal would have to fit

If an employer does argue that something about the report was misconduct — the way it was made, who it went to, what it disclosed — the fight moves into paragraph (b), where the Legislature listed ten things that are not employment misconduct “[r]egardless of paragraph (a).” Four of the ten are the ones a report or a refusal would run through, and each is quoted here exactly as it appears:

• (3) “simple unsatisfactory conduct”;
• (4) “conduct an average reasonable employee would have engaged in under the circumstances”;
• (6) “good faith errors in judgment if judgment was required”;
• (2) “conduct that was a consequence of the applicant’s inefficiency or inadvertence”.

Clause (6) is the one with a whistleblower’s name on it, and it is worth reading against the Whistleblower Act’s own vocabulary, because the two statutes use the same phrase for different things. The Whistleblower Act defines “good faith” by cross-reference: “‘Good faith’ means conduct that does not violate section 181.932, subdivision 3,” Minn. Stat. § 181.931, subd. 4, and subdivision 3 reaches statements made “knowing that they are false or that they are in reckless disregard of the truth.” Chapter 268 does not define “good faith” at all, and clause (6) attaches it to “errors in judgment” rather than to reports. Two statutes, one phrase, two jobs. Neither definition governs the other, and this page does not treat them as interchangeable. What good faith means under the Whistleblower Act is a separate question from what clause (6) excuses.

None of this has been worked out in a published decision, and the honest way to say so is to say what was searched. Every published Minnesota Supreme Court and Court of Appeals decision in North Western Reporter, Second Series, volumes 825 through 932 — 1,673 decisions filed between May 29, 2013 and September 4, 2019 — was retrieved from the Caselaw Access Project and searched. No decision in that corpus contains both “268.095” and “181.932.” None contains both “268.095” and “whistleblower.” The two statutes have not been read together in a published Minnesota appellate decision that search reaches.

Paid leave is not a discharge. Unpaid indefinite leave is.

A whistleblower who has been investigated and sent home is often told to wait and see whether a termination follows. Chapter 268 answers part of that on its own terms. Section 268.095, subd. 5(a)–(b):

(a) A discharge from employment occurs when any words or actions by an employer would lead a reasonable employee to believe that the employer will no longer allow the employee to work for the employer in any capacity. A layoff because of lack of work is a discharge.

(b) A suspension from employment without pay that is of an indefinite duration or is for more than 30 calendar days is considered a discharge at the time the suspension begins.

Paragraph (b) has two triggers and both require the suspension to be without pay: indefinite duration, or more than 30 calendar days. Paragraph (c) closes the theory an employee usually reaches for next: “When determining if an applicant was discharged, the theory of a constructive discharge does not apply.”

Paid leave is handled in a different section, and it is the answer a whistleblower who has been sent home on full pay pending an investigation actually needs. Minn. Stat. § 268.085, subd. 13(c):

A suspension from employment with pay, regardless of duration, is not a separation from employment and the applicant is ineligible for unemployment benefits for the duration of the suspension with pay.

Two things in one sentence, and the second is the one people miss. A paid suspension is not a separation — so there is nothing for § 268.095 to operate on — and the applicant is ineligible for benefits while it lasts. “Regardless of duration” is the statute’s phrase; a nine-month paid leave is treated the same as a nine-day one.

The same section’s subdivision 13a(c) says the same about an approved leave: “A leave of absence is a temporary stopping of work that has been approved by the employer. A leave of absence is not a quit or a discharge from employment. Section 268.095 does not apply to a leave of absence.” And subdivision 13a(d): “An applicant who is on a paid leave of absence, whether the leave of absence is voluntary or involuntary, is ineligible for unemployment benefits for the duration of the leave.”

None of that decides anything under the Whistleblower Act, where paid investigatory leave is squarely in play. The Minnesota Court of Appeals has held that administrative leave is not categorically outside the Act’s definition of “penalize” — the treatment is in what “penalize” reaches. Chapter 268 and § 181.931, subd. 5, are asking different questions about the same leave, and the answers do not have to match.

Quitting rather than break the law

The Whistleblower Act protects an employee who refuses an employer’s order and says why. Minn. Stat. § 181.932, subd. 1(3). It does not protect quitting, and chapter 268 does not have a clause for it either.

An applicant who quit is ineligible unless one of the ten situations in § 268.095, subd. 1, applies. The only one that could reach this is clause (1) — quitting “because of a good reason caused by the employer as defined in subdivision 3.” Subdivision 3(a) sets three elements:

A good reason caused by the employer for quitting is a reason:

(1) that is directly related to the employment and for which the employer is responsible;

(2) that is adverse to the worker; and

(3) that would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment.

Subdivision 3(g): “The definition of a good reason caused by the employer for quitting employment provided by this subdivision is exclusive and no other definition applies.” The Legislature wrote an express clause for sexual harassment in paragraph (f) and an express clause for notification of a future discharge in paragraph (e). It did not write one for being ordered to break the law.

And subdivision 3(c) adds a step that has to happen before the quit:

If an applicant was subjected to adverse working conditions by the employer, the applicant must complain to the employer and give the employer a reasonable opportunity to correct the adverse working conditions before that may be a good reason caused by the employer for quitting.

Set that beside the Whistleblower Act’s refusal clause and the two statutes ask for different things from the same employee at the same moment. Clause (3) of § 181.932, subd. 1, requires an order, a refusal, and that “the employee informs the employer that the order is being refused for that reason.” Subdivision 3(c) of § 268.095 requires a complaint and a reasonable opportunity to correct. Neither statute mentions the other. Whether an order to violate the law is an “adverse working condition,” and whether refusing it satisfies the complaint requirement, are questions no decision retrieved for this page answers, and this page does not answer them.

One more trap sits in subdivision 2(c): “An employee who has been notified that the employee will be discharged in the future, who chooses to end the employment while employment in any capacity is still available, has quit the employment.” An employee told the termination is coming who leaves early has converted a discharge into a quit, and then has to find one of the ten exceptions. The quit exceptions are worked through in quitting and still collecting unemployment.

The decision does not travel — and that cuts both ways

This is the provision most likely to be described backwards to a whistleblower, so here it is in full. Minn. Stat. § 268.105, subd. 5a, titled “No collateral estoppel”:

No findings of fact or decision or order issued by an unemployment law judge may be held conclusive or binding or used as evidence in any separate or subsequent action in any other forum, be it contractual, administrative, or judicial, except proceedings provided for under this chapter, regardless of whether the action involves the same or related parties or involves the same facts.

Read the last clause. The bar applies “regardless of whether the action involves the same or related parties or involves the same facts” — which is exactly the situation of a fired whistleblower with a district court case. The favorable finding does not come with you. Neither does the unfavorable one.

Subdivision 1a(d) adds: “Decisions of an unemployment law judge are not precedential.” So a decision in someone else’s case does not help either.

The testimony is treated separately and almost as strictly. Subdivision 5(b):

Testimony obtained at a hearing may not be used or considered for any purpose, including impeachment, in any civil, administrative, or contractual proceeding, except by a local, state, or federal human rights agency with enforcement powers, unless the proceeding is initiated by the department. This paragraph does not apply to criminal proceedings.

Two carve-outs are inside that. A human rights agency with enforcement powers may use it — which reaches a charge before the Minnesota Department of Human Rights or the Equal Employment Opportunity Commission, and not a district court whistleblower action. And it “does not apply to criminal proceedings.”

Subdivision 5(a) governs the recording itself. All testimony at any hearing must be recorded, and a copy must be furnished to a party at no cost during the reconsideration and certiorari windows and while either is pending. Then: “Regardless of any law to the contrary, recorded testimony and other evidence may later be made available only under a district court order. A subpoena is not considered a district court order.”

Two different questions about one firing

The reason the two proceedings do not decide each other is not procedural. It is that they ask about different people.

An employer can lose the unemployment case and win the whistleblower case, because a finding that the conduct was not a serious violation of the employer’s reasonable standards is not a finding that the employer fired the employee because of the report. The reverse is equally available: an employee whose conduct was genuinely a serious violation can still have been fired for the report, and § 268.095, subd. 6, has nothing to say about that.

The agreement that does not bind the department

A severance offer sometimes includes a promise not to contest benefits. Minn. Stat. § 268.069, subd. 2, is the answer: “Any agreement between an applicant and an employer is not binding on the commissioner in determining an applicant’s entitlement,” and “[t]here is no presumption of entitlement or nonentitlement to unemployment benefits.”

Minn. Stat. § 268.192, subd. 1, goes further and voids the trade: “Any agreement by an individual to waive, release, or commute rights to unemployment benefits or any other rights under the Minnesota Unemployment Insurance Law is void.” The same subdivision makes it a misdemeanor for an employer to “require or accept any waiver of any right or in any manner obstruct or impede an application or continued request for unemployment benefits” — a provision the Minnesota Supreme Court relied on in Dukowitz v. Hannon Security Services, 841 N.W.2d 147, 153 (Minn. 2014), as a reason to decline to create a common-law wrongful-discharge tort on top of the statute. Subdivision 1a voids the specific bargain: an employer may not make an agreement that, in exchange for not contesting benefits, the employee will quit, take a leave, leave temporarily or permanently, or “withdraw a grievance or appeal of a termination.” “An agreement that violates this subdivision has no effect under this chapter.”

What this page does not do

It describes how two statutes sit next to each other. It does not tell you what to say at a hearing, whether anything you did was a serious violation of a standard your employer could reasonably expect, or whether your firing was unlawful — that last question starts at was my firing illegal. The hearing mechanics, the three 45-calendar-day clocks, and the rules about participation are in the unemployment hearing that decides the case.

Currency

Statutory text is quoted from the 2025 Minnesota Statutes as posted by the Revisor. History lines: § 268.095 ends at 2022 c 98 art 4 s 51; § 268.105 at 2023 c 33 s 17-20; 2023 c 69 s 11; § 268.085 at 2023 c 55 art 1 s 30; § 268.069 at 1Sp2019 c 7 art 8 s 3; § 268.031 at 2017 c 35 art 3 s 1; § 268.192 at 2012 c 201 art 2 s 7; § 181.932 at 2025 c 39 art 2 s 57; § 181.931 at 2025 c 39 art 2 s 54-56. The Revisor’s Table 2 was queried per exact section at both /statutes/2025/table2 and /statutes/2026/table2, and every returned row was read on its Session column. The most recent action recorded for any subdivision of § 268.095 is the 2022 regular session; for § 268.105, the 2023 regular session; for § 268.085, subdivision 13, the 2017 regular session, and for subdivision 13a, the 2019 first special session. None of the sections cited on this page has a 2026 row. The current sentence in § 268.095, subd. 6(a), dates from Laws 2019, 1st Spec. Sess., ch. 7, art. 7, § 9 — the amendment that struck “displays clearly” and the “substantial lack of concern” prong, described in unemployment misconduct in depth.

Related: unemployment misconduct in depth, the unemployment hearing that decides the case, quitting and still collecting unemployment, and the map of Minnesota whistleblower claims.