Derek L. Connolly v. Mechanical Resources, Inc., Department of Employment and Economic Development

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A26-0076

Derek L. Connolly,
Relator,

vs.

Mechanical Resources, Inc.,
Respondent,

Department of Employment and Economic Development,
Respondent.

Filed September 28, 2026
Affirmed
Harris, Judge

Department of Employment and Economic Development
File No. 52016925-3

Derek Lee Connolly, St. Peter, Minnesota (self-represented relator)

Mechanical Resources, Inc., Mankato, Minnesota (respondent employer)

Melannie M. Markham, Keri A. Phillips, Minnesota Department of Employment and
Economic Development, St. Paul, Minnesota (for respondent department)

Considered and decided by Wheelock, Presiding Judge; Frisch, Chief Judge; and
Harris, Judge.

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NONPRECEDENTIAL OPINION
HARRIS, Judge
In this unemployment -benefits appeal, relator challenges the decision of the
unemployment-law judge (ULJ) that he was ineligible for unemployment benefits because
he was not available for or actively seeking suitable employment. Because the ULJ’s
decision is supported by substantial evidence in the record, we affirm.
FACTS
The following summarizes the ULJ’s written factual findings along with the record
evidence relevant to the issues on appeal.
Relator Derek L. Connolly was employed by respondent-employer Mechanical
Resources Inc. from July 2021 to November 2024. In November 2024, Connolly was laid
off from Mechanical Resources because business was slow. Connolly established an
unemployment-benefits account with respondent Department of Employment and
Economic Development (DEED). Connolly requested and received weekly unemployment
benefits from November 2024 to June 1, 2025.
While unemployed, Connolly decided to start his own business. Connolly spoke
with a DEED representative, who recommended that Connolly participate in a small-
business program. Connolly participated in the program before creating an LLC in
February 2025. Shortly after establishing his LLC, Connolly put his business “on hold” to
care for his daughter’s medical needs and because he did not have time or money to pursue
his contractor’s license. Between setting up his LLC in February and the end of receiving
unemployment benefits in June, Connolly contacted two individuals about potential job

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openings but was mainly focused on his daughter’s care. Connolly resumed his small
business after he exhausted his unemployment benefits in June 2025, working about 35 to
40 hours per week.
In August 2025, DEED determined that Connolly was ineligible to receive
unemployment benefits between February 2025 and June 2025 because Connolly
“restricted [his] availability to look for covered employment due to starting [his] own
business.” Connolly appealed DEED’s determination.
The ULJ held an evidentiary hearing. Connolly testified that he believed the layoff
was seasonal, but that Mechanical Resources would rehire him in the spring when more
work was available. When asked if he was looking for work between February 2025 and
June 2025, Connolly stated that he “reach[ed] out to a couple people” but that certain
factors limited his potential job prospects, such as a decrease in pay and his involvement
in caring for his daughter.
Following the hearing, the ULJ issued its findings of fact and decision. The ULJ
concluded that Connolly was ineligible for unemployment benefits because “he was not
ready, willing, or able to accept suitable employment” between February 2025 and June
2025. It reasoned that “Connolly focused on his family and his daughter’s care needs,”
“took no action to engage in employment,” and “wait[ed] for seasonal work to return.” The
ULJ also found that Connolly also did not apply for any jobs during that time period and
“only devot[ed] time to self-employment because working on his own provide[d] more
flexibility for his family.” The ULJ determined: “Without reasonable and diligent efforts

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to search for and apply to suitable work, Connolly [was] not actively seeking
[employment].”
Connolly filed a request for reconsideration of the ULJ’s September 3, 2025
determination. The ULJ denied reconsideration and affirmed its previous determination,
concluding that “Connolly [was] not . . . available for or actively seeking suitable
employment because he was waiting for a seasonable job to restart, caring for his child,
and/or building his own business.” It also determined that Connolly “provided no new
information or arguments that would likely change the outcome or show the testimony
from the hearing was false or likely false.”
Connolly appeals.
DECISION
Minnesota’s unemployment insurance program is meant to assist those who become
“unemployed through no fault of their own.” Minn. Stat. § 268.03, subd. 1 (2024).
Minnesota Unemployment Insurance Law is “remedial in nature and must be applied in
favor of awarding unemployment benefits.” Minn. Stat. § 268.031, subd. 2 (2024). “[A]ny
statutory provision that would preclude an applicant from receiving benefits must be
narrowly construed.” Id. To be eligible to receive unemployment benefits, an applicant
must meet all the ongoing eligibility requirements in Minnesota Statutes section 268.085,
subdivision 1 (2024). See McNeilly v. Dep’t of Emp. & Econ. Dev., 778 N.W.2d 707,
710-11 (Minn. App. 2010). Among other requirements, applicants must be “available for
suitable employment” and “actively seeking suitable employment.” Minn. Stat. § 268.085,
subd. 1(4), (5).

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Connolly challenges the ULJ’s order, which found him ineligible to receive
unemployment benefits because he was (1) not available to accept suitable employment
and (2) not actively seeking suitable employment.
I. The ULJ did not err in determining that Connolly was not available for suitable
employment.

Connolly argues that the evidence is insufficient to support the ULJ’s determination
that he was not available for suitable employment.
Whether an applicant is available for suitable employment is a question of fact.
Goodman v. Minn. Dep’t of Emp. Servs., 255 N.W.2d 222, 223 (Minn. 1977). “[W]e
review the ULJ’s findings of fact in the light most favorable to the decision and will not
disturb those findings as long as there is evidence in the record that reasonably tends to
sustain them.” Wilson v. Mortg. Res. Ctr., Inc., 888 N.W.2d 452, 460 (Minn. 2016)
(quotations omitted). “We defer to the ULJ when reviewing credibility and conflicting
evidence.” Lamah v. Doherty Emp. Grp., Inc., 737 N.W.2d 595, 598 (Minn. App. 2007).
We may reverse or modify the ULJ’s decision if it was unsupported by substantial evidence
in view of the entire record or affected by an error of law, thereby prejudicing the
applicant’s substantial rights. Minn. Stat. § 268.105, subd. 7(d)(4), (5) (2024).
To be available for suitable employment, an applicant must be “ready, willing, and
able to accept suitable employment.” Minn. Stat. § 268.085, subd. 15(a) (2024). “The
attachment to the work force must be genuine.” Id. “An applicant may restrict availability
to suitable employment, but there must be no other restrictions, either self-imposed or
created by circumstances, temporary or permanent, that prevent accepting suitable

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employment.” Id. “An applicant who is absent from the labor market area for personal
reasons, other than to search for work, is not ‘available for suitable employment.’” Minn.
Stat. § 268.085, subd. 15(c) (2024).
Connolly contends that the evidence is insufficient to support the ULJ’s
determination that he was not available for suitable employment because (A) he certified
weekly that he was available for suitable employment, (B) evidence of his LLC alone did
not establish that he was unavailable for suitable employment, (C) he never refused suitable
employment, and (D ) the ULJ improperly relied on conduct that occurred after the
unemployment-benefits period ended to support a finding of ineligibility. We address each
argument in turn.
A. The ULJ did not err in finding that Connolly was not ready, willing, or
able to accept suitable employment.

Connolly argues that the ULJ erred in determining that he was not ready, willing, or
able to accept suitable employment because he truthfully certified weekly that he was
available for work. He asserts: “Weekly certification is direct evidence of continued
attachment to the workforce.”
To continue to receive unemployment benefits, an applicant must certify each week
that they meet the “ongoing eligibility requirements for unemployment benefits under
section 268.085.” Minn. Stat. § 268.0865, subd. 1 (2024). Section 268.085 provides, in
relevant part, that an applicant may be eligible to receive unemployment benefits for any
week that the applicant was “ready, willing, and able to accept suitable employment.”
Minn. Stat. § 268.085, subds. 1(4), 15(a). An applicant does not meet the ongoing

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eligibility requirements under section 268.085 if they are “absent from the labor market
area for personal reasons, other than to search for work.” Minn. Stat. § 268.085,
subd. 15(c).
The ULJ found that Connolly “was not ready, willing, or able to accept suitable
employment” during the unemployment-benefits period because he was primarily focused
on his daughter’s medical care. This finding is supported by the record. At the evidentiary
hearing, Connolly testified that during the unemployment-benefits period, his daughter
required medical treatment. He explained that he attended appointments with the medical
facility, his daughter’s school, doctors, social workers, and therapists, which were “very
time consuming.” When the ULJ asked if Connolly was looking for work during this time,
he testified that he was “nervous about starting a job” because of the demanding nature of
his daughter’s care.
The ULJ did not err by finding that Connolly did not establish that he met the
ongoing eligibility requirements for unemployment benefits, despite certifying weekly that
he was available for work. During the unemployment-benefits period, Connolly was
absent from the labor market to care for his daughter’s medical needs. While
understandable, this temporary circumstance prevented Connolly from accepting suitable
employment. See Minn. Stat. § 268.085, subd. 15(a) (stating that “there must be no other
restrictions, either self-imposed or created by circumstances, temporary or permanent, that
prevent accepting suitable employment”).
Accordingly, the ULJ did not err in determining that Connolly was not ready,
willing, or able to accept suitable employment.

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B. The ULJ’s ineligibility determination was not based solely on the
establishment of Connolly’s LLC.

Connolly argues that the establishment of his LLC was the primary basis for the
ineligibility determination. He asserts that evidence of the creation and existence of his
LLC alone was insufficient to prove that he was not available to accept suitable
employment. Connolly misstates the record.
To determine whether employment is suitable for an applicant seeking
unemployment benefits, “primary consideration is given to the temporary or permanent
nature of the applicant’s separation from employment and whether the applicant has
favorable prospects of finding employment in the applicant’ s usual or customary
occupation at the applicant’s past wage level within a reasonable period of time.” Minn.
Stat. § 268.035, subd. 23a(b) (2024). “If prospects [of suitable employment] are
unfavorable, employment at lower skill or wage levels is suitable if the applicant is
reasonably suited for the employment considering the applicant’s education, training, work
experience, and current physical and mental ability.” Id.
The ULJ found that suitable employment for Connolly paid around $25 per hour
and included “full-time work in residential construction, carpentry and woodworking, and
system installation.” The ULJ noted that because “construction had seasonal breaks,
suitable employment also include[d] temporary work so long as the average gross weekly
wages [were] equal to or more than 150 percent of the applicant’s weekly unemployment
benefit amount.” The ULJ determined that between February 2025 and June 2025,

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Connolly was not available to accept suitable employment because he “took no action to
engage in employment” and instead, “wait[ed] for seasonal work to return.”
The ULJ’s findings are supported by the record. Connolly testified that at the time
he was laid off, he “felt pretty confident” that Mechanical Resources would rehire him
when more work was available. Connolly stated that, while unemployed, he reached out
to two individuals for work. He testified that he contacted a former colleague from a
different company but discovered that the company was “in a slump.” He also “reach[ed]
out to another guy, but he no longer worked for that company anymore. So that was kind
of a . . . dead end.” Connolly noted that other job prospects would involve a substantial
decrease in pay, so he decided to “keep looking instead of just jumping on the first thing.”
Connolly testified that when his benefits ceased in June 2025, he was not contacted by
Mechanical Resources to return and ultimately decided to continue working on his small
business.
Contrary to Connolly’s assertion, the ULJ’s determination was not based solely on
the establishment of Connolly’s LLC. Rather, the ULJ’s determination was based on
Connolly’s failure to seek temporary or full-time employment in residential construction,
carpentry and woodworking, and system installation. Considering the nature of his
daughter’s care, Connolly could have obtained temporary work, so long as the average
gross weekly wages were “equal to or more than 150 percent of [his] weekly
unemployment-benefit amount.” Connolly also could have obtained employment at a
lower wage level, depending on his education, training, and work experience. See Minn.
Stat. § 268.035, subd. 23a(b). Connolly’s decision to “keep looking instead of just jumping

10
on the first thing” supports the ULJ’s finding that he was not available to accept suitable
employment.
We conclude that the ULJ did not err because its determination is adequately
supported by the record.
C. The ULJ did not find that Connolly refused suitable employment from
Mechanical Resources.

Connolly appears to argue that the ULJ improperly based its ineligibility
determination on a refusal to accept suitable employment from Mechanical Resources.
Connolly’s argument stems from his belief that his layoff was seasonal, but that the
company would rehire him during the spring and summer. He asserts that there was no
evidence that he declined suitable employment because he “was laid off due to lack of
work” and “[t]he employer confirmed he was not called back and no job offer was refused.”
We are not persuaded.
The record does not support Connolly’s contention that his ineligibility was based
on a refusal to accept suitable employment from Mechanical Resources. The ULJ
determined that Connolly was not available to accept suitable employment because he was
“waiting for seasonal work to return.” At the evidentiary hearing, a representative from
Mechanical Resources testified that Connolly was laid off due to lack of work. He stated
that no employees had been called back since the layoff, and that they did not anticipate
any work for a while. Connolly could not have refused suitable employment from
Mechanical Resources because the company did not offer him a job.

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The ULJ did not find that Connolly was ineligible for unemployment benefits
because he refused suitable employment from Mechanical Resources. The ULJ found that
Connolly was ineligible because he merely waited for seasonal work to return, which is
supported by record evidence. Therefore, we will not disturb the ULJ’s findings. See
Wilson, 888 N.W.2d at 460.
D. The ULJ did not rely on Connolly’s conduct after the unemployment-
benefits period as a basis for ineligibility.

Connolly argues that the ULJ improperly relied on his self-employment efforts after
June 2025, when his unemployment benefits ceased, as a retroactive basis for conclude that
he was not available for suitable employment. This argument is unavailing.
In determining that Connolly was not available for suitable employment, the ULJ
stated:
From February 2 to about June 1, 2025, Connolly was not
attached to the workforce. During that time, Connolly focused
on his family and his daughter’s care needs. He was not ready,
willing, or able to accept suitable employment. Instead,
Connolly took no action to engage in employment, waiting for
seasonal work to return. After about June 1, 2025, Connolly
focused his efforts on only self-employment. This is a
restriction beyond suitable employment.

The record clearly demonstrates that the ULJ focused on the time period of February 2025
to June 2025. The ULJ determined that during this time period Connolly primarily focused
on his daughter’s medical care. Connolly testified that, prior to his daughter’s medical
treatment, he participated in meetings with the medical facility and attended appointments
with his daughter’s health-care providers, which he described as “very time consuming.”
When asked whether he looked for work during this time, Connolly stated that he was

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“nervous about starting a job” because of the demanding nature of his daughter’s care.
Viewing the ULJ’s determination in its entirety, we conclude that the ULJ did not focus on
the wrong time period.
In sum, we conclude that the ULJ did not err in determining that Connolly was
ineligible to receive unemployment benefits because he was not available for suitable
employment.
II. The ULJ did not err in determining that Connolly was not actively seeking
employment.

Next, Connolly asserts that the evidence is insufficient to support the ULJ’s
determination that he was not actively seeking employment. He maintains that he
“truthfully certified each week that he was available for work,” and that the record lacks
specific evidence to support the ULJ’s finding that he did not apply for any jobs.
Whether an applicant is actively seeking suitable employment is a question of fact.
McNeilly, 778 N.W.2d at 711-12. To be eligible for unemployment benefits, an applicant
must be “actively seeking suitable employment.” Minn. Stat. § 268.085, subd. 1(5).
“Actively seeking suitable employment” is defined as “reasonable, diligent efforts an
individual in similar circumstances would make if genuinely interested in obtaining
suitable employment under the existing conditions in the labor market area.” Id .,
subd. 16(a) (2024). If an applicant was laid off because of a lack of work, “an applicant
must, when reasonable, contact those employers from whom the applicant was laid off
because of lack of work and request suitable employment.” Id., subd. 16(b) (2024).

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While there is no bright-line definition of what constitutes actively seeking suitable
employment, caselaw indicates that merely looking at employment listings, contacting
acquaintances, and applying for a few positions is insufficient to demonstrate that an
applicant is actively seeking suitable employment. See, e.g., Pyeatt v. State, Dep’t of Emp.
Servs., 263 N.W.2d 394, 395 (Minn. 1978) (concluding that applicant failed to demonstrate
that he had made a thorough and adequate work search by applying for six or seven
positions over an eight -month period when approximately 25 positions were available);
Monson v. Minn. Dep’t of Emp. Servs., 262 N.W.2d 171, 172 (Minn. 1978) (concluding
that applicant’s work search was inadequate when applicant researched an employment
data bank, regularly consulted professional journals and newspaper notices, and applied
for two or three positions in his field, but failed to explore other positions over a two-month
period); James v. Comm’r of Econ. Sec., 354 N.W.2d 840, 841-42 (Minn. App. 1984)
(concluding that applicant was properly denied unemployment benefits because applicant
did not follow the job search instructions to make several in-person job contacts each
week), rev. denied (Minn. Dec. 20, 1984).
The ULJ determined that Connolly was not actively seeking suitable employment.
It reasoned that Connolly did not make reasonable and diligent efforts to search for suitable
work because he had not submitted any job applications and “only devot[ed] time to self-
employment” during the time he was receiving benefits.
Our decision in McNeilly is instructive. There, a ULJ determined that the applicant
was ineligible for unemployment benefits after he failed to actively seek employment
following a seasonal layoff. McNeilly, 778 N.W.2d at 708. At the evidentiary hearing, the

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applicant acknowledged that he had not applied for jobs, that the landscaping business that
had employed him did not want him to work during the off-season, and that he had only
“asked around for work.” Id. at 709. We concluded that the ULJ properly determined that
the applicant failed to engage in any reasonable effort to find employment during the time
that he received unemployment benefits. Id. at 712.
Like the applicant in McNeilly, Connolly testified that during the time he was
receiving unemployment benefits he “reach[ed] out to a couple [of] people,” but ultimately
decided to “keep looking instead of just jumping on the first thing.” He stated that he first
reached out to a former colleague from a different employer and discovered that the
company was “in a slump.” He then “reach[ed] out to another guy, but he no longer worked
for that company anymore” so that was “kind of a dead end.” Merely reaching out to a
couple of people does not constitute a reasonable effort to find employment. McNeilly,
778 N.W.2d at 712. Furthermore, there is no evidence in the record that Connolly
submitted any job applications during the months he was receiving unemployment benefits.
Nor does the record suggest that Connolly requested suitable employment from his former
employer after he was laid off from lack of work. See Minn. Stat. § 268.085, subd. 16(b).
Connolly asserts that the ULJ failed to identify “how many applications were
required per week,” “what job search activities were reported weekly,” “which specific
weeks lacked job search activity,” and “what evidence contradicted weekly certifications.”
He also contends that the ULJ’s decision is not supported by substantial evidence because
it “lacks week-by-week findings for unemployment eligibility.” As mentioned above, there
is no bright-line definition of what constitutes actively seeking suitable employment. And

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whether an applicant is actively seeking suitable employment is a factual determination.
McNeilly, 778 N.W.2d at 711-12; see, e.g., Haub v. Dep’t of Emp. & Econ. Dev., No. A13-
1986, 2014 WL 2565698, at *4-5 (Minn. App. June 9, 2014) (reversing ULJ’s decision that
applicant was ineligible for unemployment benefits because applicant complied with her
DEED-approved work-search plan and actively sought employment by posting her resume
on an employment website, contacting several employers in her field, searching internet
job sites, and visiting a workforce center); In re Vue, No. A22-0875, 2023 WL 3047979,
at *2 (Minn. App. Apr. 24, 2023) (affirming ULJ’s decision that applicant did not actively
seek suitable employment when applicant spent six hours per week casually exploring
potential employment opportunities and sending inquiries to three employers over a one-
month period without submitting any job applications). Thus, the ULJ’s factual finding
that Connolly did not actively seek suitable employment is supported by record evidence.
For these reasons, the ULJ did not err in determining that Connolly was ineligible
to receive unemployment benefits because he was not actively seeking employment.
Affirmed.