It’s not an unusual situation. An employee tenders to her employer a notice that she intends to resign in two weeks. In some situations, the employer may be fine with allowing the employee to work out the notice period. But in others, the employer, for any number of reasons, may decide not to allow the employee to work out the notice period and consider the resignation effective on the date the notice was first provided. In this latter situation, how does it affect the employee’s entitlement to unemployment benefits? Did she voluntarily resign — in which case she would not be entitled to benefits? Or was she terminated — in which case she likely would be entitled to benefits?

The Tennessee Court of Appeals recently addressed this issue in Brell v. Thomas, concluding that when an employee is terminated prior to a previously announced resignation date, the employee did not voluntarily resign and was thus entitled to unemployment benefits.² Here, we’ll provide an overview of the Brell decision and then outline some practical guidance for employers who will no doubt be faced with similar situations in the future.

The Facts

Deena Brell worked as a staffing specialist at PeopleReady, where she worked for almost four years. On Feb. 15, 2019, Brell expected to receive a promotion during a staff meeting, but that did not come to fruition, and she was upset. Later that day, she submitted her two week notice and emailed human resources asking for guidance about her last day so she could utilize her accrued PTO. Brell requested to work through Feb. 22 and use PTO for the next 15 days, making her last official day March 15.

Later that same day (Feb. 15), the employer sent Brell an email stating that it had received her resignation and it would be effective Feb. 22, the last day she had wanted to work, but without authorizing PTO for the next 15 days as she had requested. On Feb. 18, Brell reported to work and completed her shift. Later that day, the employer informed Brell that her employment was terminated effective that day. She only received wages through the last day she worked, Feb. 18.

A few weeks later, Brell submitted her claim for unemployment benefits to the Tennessee Depart of Labor and Workforce Development. The Department of Labor initially informed Brell that she qualified for unemployment benefits. However, it later determined that she voluntarily quit her job and was therefore disqualified for benefits. Brell appealed this decision throughout all levels of the Department of Labor, with no success. She obtained the same result in her appeal to the Chancery Court of Rutherford County.

The Decision

The Court of Appeals was tasked with determining whether Brell voluntarily quit her employment within the meaning of Tennessee’s Employment Security Law. The statute provides that a voluntary quit is when a claimant, like Brell, “left the claimant’s most recent work voluntarily without good cause connected to the claimant’s work.”³ Courts have interpreted this to mean that an employee has voluntarily quit when he or she fails to take all necessary and reasonable steps to protect his or her employment.

The Department of Labor faced a couple of hurdles. First, from a procedural perspective, the department had the burden of proving that Brell’s resignation was a “disqualifying event.” Second, from a statutory construction perspective, Tennessee’s Unemployment Security Law is construed liberally in the employee’s favor and the disqualification provisions are construed narrowly.

The Department of Labor argued that Brell voluntarily quit because she chose to resign after not receiving a promotion and that her resignation email is the type of voluntary act that can lead to a termination or be considered a voluntary quit.⁴ Brell, for her part, argued that her employment ended when her employer terminated her immediately after she gave notice of her resignation. With statutory interpretation at the heart of this dispute, the key was going to be the timing of Brell’s exit.

In reviewing the statutory language, the Court of Appeals reasoned that a voluntary quit is one “take on the employee’s own motion or accord” and is not “compelled by the employer.” But, as the court noted, this didn’t provide much help given the facts in this case. There was no caselaw in Tennessee to aid in this analysis, so the court looked to decisions from other jurisdictions as persuasive authority.

After determining that the persuasive authority supported Brell’s position, the salient question, the court opined, was “[a]t what point do we assess the voluntariness of the employee’s act [resignation]?” The court held that “for an employee to have left work voluntarily on a certain date, the employee must have, through words or actions, chosen to leave that employment at that time.” (Emphasis added.) And with respect to Brell’s situation, the court determined that despite giving notice of her future resignation on Feb.15, 2019, the reason her employment ended on Feb. 18, 2019 is because she was terminated. Brell wanted to work longer, but her employer didn’t allow her to do so. That, the court reasoned, was not a voluntary quit.

But what about the principle that a voluntary quit occurs when an employee fails to take all necessary and reasonable steps to protect his or her employment? The Department of Labor argued that a reasonable person would know that sending a resignation email is the type of voluntary act that can be considered a voluntary quit or lead to termination. The court was not persuaded, however, pointing out that the vast majority of decisions from other jurisdictions did not support the department’s position on the effect of a resignation. Ultimately, the court determined that Brell did not terminate her employment and that the administrative decision denying her unemployment benefits was not supported by substantial and material evidence and was arbitrary and capricious.

One question that was not addressed, because it was not before the court, was whether an employee would be entitled to benefits for the period after the effective resignation date set forth in the employee’s email. While not ruling on this issue, the court noted that states are currently split in this regard. But interestingly, the court pointed out in dicta, that “we are not aware of any limit on eligibility in Tennessee’s unemployment statutes under these circumstances.”

The Takeaway

Notice periods — especially ones that may be longer than two weeks — can create morale issues or pose potential security risks. For example, if the exiting employee is going to work for a competitor, then there are valid reasons why an employer may not wish for him or her to work out the notice period. So, what is an employer to do in such a situation as was present in Brell (i.e., employee tenders resignation but wants to work out a notice period)?

As we see it, there are a few potential options:

1. If avoiding responsibility for unemployment claims is important, then let the employee remain employed throughout the notice period. This does not necessarily mean, however, that the employee has to continue performing the same duties as before the resignation was communicated, just that he or she remains employed.
2. If avoiding responsibility for unemployment claims is less important, then the employer can terminate the relationship during the notice period or as soon as the resignation is communicated.
3. Alternatively, if no set amount of notice is required, the employer could tell the employee that she can remain employed throughout the notice period or leave immediately. If the employee chose to leave immediately, then based on the rationale in the Brell decision, that is a situation in which the employee voluntarily quit because she chose to leave at that time despite being given the option to work longer. Of course, if the employee chooses to work out the notice period, then we have the same result as in the first option.

The Brell decision makes clear that the timing of an employee’s exit after submitting a notice of resignation is paramount in determining whether the employee is eligible for unemployment benefits. If the employee is terminated during the notice period, then he or she will not be considered to have voluntarily quit and benefits will likely be awarded. |||

EDWARD G. PHILLIPS is a lawyer with Kramer Rayson LLP in Knoxville, where his primary areas of practice are labor and employment law. He graduated with honors from East Tennessee State University and received his law degree from the University of Tennessee College of Law in 1978 with honors, and as a member of The Order of the Coif. He is a former chair of the Tennessee Bar Association’s Labor and Employment Law Section.

BRANDON L. MORROW is an employment lawyer with Kramer Rayson LLP in Knoxville. He also serves as a mediator in employment-related disputes. He holds a bachelor’s degree from the University of Tennessee and a law degree from the University of Tennessee College of Law.

NOTES
1. The authors extend their gratitude to their law partners, John C. Burgin Jr. and Betsy J. Beck, for their thoughtful and practical insight on the implications of the Brell decision.
2. No. M2024-00300-COA-R3-CV, 2025 WL 798642, at *6 (Tenn. Ct. App. Mar. 13, 2025).
3. Tenn. Code Ann. § 50-7-303(a)(1)(A)(i).
4. Interestingly, Brell’s employer, PeopleReady, did not participate in the unemployment hearings or the litigation.