SW Legal studies in Business

Employee Who Quits for Fear of Breaking Law Is within Rights for Unemployment Benefits
Description

Mississippi high court held that the employee of a motel who quit during Hurricane Katrina rather than engage in price gouging of clients in possible violation of state law had good cause to quit and so was eligible for unemployment benefits.

Topic Employment Law
Key Words

Unemployment Benefits; Denial; Good Cause; Price Gouging

C A S E   S U M M A R Y
Facts

When Hurricane Katrina hit, people who lived on the coast evacuated inland. The Days Inn located in Moss Point, Mississippi normally charged $45-50 per night, but the owners raised the rate to $90 when evacuees began to arrive. Patricia Sherman, who worked as a desk clerk at the motel, complained to the manager about raising the rate. He said the high rate would be imposed. Sherman quit, saying that raising the rate was no way to treat people and was price gouging. She was afraid it was breaking the law to raise the rate that much. Her request for unemployment insurance was denied because she quit voluntarily without good cause. She appealed.

Decision

Reversed and rendered. Unemployment benefit claimants satisfy their burden of proof of good cause for leaving work when they voluntarily leave employment rather than violate a statute, which is a question of law. Sherman refused to engage in price gouging, which was a good reason to quit, so she is entitled to unemployment benefits. Under Mississippi law, when there is a state of emergency “the value received for all goods and services sold within the designated emergency impact area shall not exceed the prices ordinarily charged for comparable goods or services … immediately before the declaration of a state of emergency.” Those who violate the law can be subject to criminal violations, so Sherman was within her rights to quit.

Citation Sherman v. Mississippi Employment Security Comm., 989 So.2d 398 (Sup. Ct., Miss., 2008)

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