Recently, we handled a number of cases in Sacramento where the employer presented an employee with a choice of resigning v being terminated or laid off. Usually, an offer to resign is accompanied with some type of severance package. The employee often chooses to resign to avoid having the termination mark on their record. When he applies for unemployment benefits, the EDD may end up determining that the employee did not have a “good cause” for resigning and is therefore not eligible for unemployment benefits.
In many cases, this kind of denial would be erroneous and could be reversed on appeal if presented correctly to the unemployment benefits appeals board (CUIAB). This would require showing all the essential information to the appeal hearing judge that shows that the employee would have been terminated anyway if he/she didn’t choose to resign.
If you are facing a situation where the employer offers you to resign in exchange for severance, makes sure that the severance agreement or some other document includes clear language that states that if you don’t resign, you will be terminated, so it doesn’t look like you actually choose to resign on your own. This should make it easier to win the unemployment benefits appeal if you are initially denied the benefits.
And remember, just because the employer states in the severance agreement / release that they are not going to contest your unemployment benefits does not guarantee that you will actually received those benefits automatically. This is because your eligibility for benefits is not your employer’s decision; EDD makes their own determination regarding your eligibility regardless of your employer’s position on that issue.