## Facts

- Indiana State University (ISU) employed assistant professors on one-year probationary terms subject to annual review for reappointment or nonreappointment.
- William C. LaFief was appointed as an assistant professor for the 2004–2005 academic year.
- ISU reappointed LaFief for the 2005–2006 academic year.
- After the second one-year term, ISU notified LaFief that he would not be reappointed for an additional term.
- LaFief applied for unemployment benefits under Indiana’s Unemployment Compensation Act.
- An Administrative Law Judge denied benefits on the view that LaFief was not “discharged” because his employment ended when the contract term expired.
- The Indiana Department of Workforce Development Review Board reversed, treating ISU’s nonreappointment decision as equivalent to a discharge and awarding benefits.
- The Indiana Court of Appeals reversed the Review Board, reasoning that LaFief had agreed to a one-year contract that expired by its terms and therefore was not discharged.

## Issues

1. Whether a worker who accepts a fixed-term, one-year employment contract is “voluntarily unemployed” when the employer elects not to renew the contract at the end of the term.
2. Whether an employer’s nonrenewal/nonreappointment decision can be treated as a separation “through no fault of” the employee for purposes of eligibility for unemployment benefits.

## Decision

- The Indiana Supreme Court granted transfer, vacating the Court of Appeals decision.
- The court held that LaFief was not voluntarily unemployed when ISU chose not to reappoint him after his one-year term ended.
- The court concluded LaFief was entitled to unemployment benefits, absent an independent statutory disqualification.
- The court reversed the Court of Appeals and effectively reinstated the Review Board’s award of benefits.

## Legal Principles

- Indiana’s Unemployment Compensation Act is remedial and is applied to provide benefits to persons unemployed through no fault of their own.
- Acceptance of a fixed-term contract does not, by itself, make unemployment “voluntary” when the contract ends and the employer declines to renew or rehire.
- When the employee completes the contract term and does not resign or request separation, the employer’s decision not to renew is treated as an employer-initiated separation for unemployment-benefit purposes.
- Eligibility for benefits after nonrenewal remains subject to other statutory requirements and disqualifications (e.g., misconduct).

## Conclusion

A fixed-term faculty member who completes the contract term and is not offered reappointment is not “voluntarily unemployed” under Indiana unemployment law; the resulting unemployment is attributable to the employer’s nonrenewal decision, so benefits may be awarded absent another disqualifying basis.


Ind. State Univ. v. LaFief, 888 N.E.2d 184 (Ind. 2008)