Constructive Discharge: Employers May Still Face Liability Even When an Employee Resigns

Business owners generally recognize that terminating an employee from employment carries with it the risk of litigation in that the employee may later claim the employer’s decision was unlawful.  What may be less obvious is that an employer may still face a claim under various employment laws even when an employee is not fired, but instead resigns from his or her position.  This is so because courts recognize the concept of “constructive discharge.”   Constructive discharge occurs in limited circumstances when an employee may have had no other choice but to quit, meaning his or her decision to do so was actually involuntary and therefore equivalent to a termination.  In other words, an employer cannot force an employee to quit for an unlawful reason, any more than an employer can terminate an employee for an unlawful reason.  Constructive discharge is found when an employee demonstrates that the decision to quit was forced on the employee because the employer made the employee’s working conditions so intolerable or unpleasant that any reasonable person in the employee’s shoes would have felt compelled to resign.   

This does not mean that every decision to resign can be labeled a constructive discharge simply because the employee viewed his or her working conditions as unpleasant or too difficult to deal with any longer.  Courts impose an enhanced burden on employees to demonstrate constructive discharge.  Whether an employee has been forced to resign is evaluated based on an objective standard; the employee’s subjective views as to the harshness of his or her working conditions do not control.  Courts have explained that toiling under a boss who is tough, insensitive, unfair, or unreasonable can be burdensome, but the law does not protect employees from such burdens or from any of the other “ordinary slings and arrows” that workers may encounter in a demanding and fast-passed work environment.  Instead, to establish that a resignation was a constructive discharge, the employee must show that his or her working conditions were so egregious that when viewed objectively, it is clear the employee’s decision was void of free will or choice.  A plausible cause of action based on constructive discharge requires an employee to demonstrate that he or she was subject to deliberate mistreatment or harassment so severe and oppressive that staying on the job while seeking redress would be intolerable for any reasonable person. 

One approach employers can take to help avoid claims based on a theory of constructive discharge is to make reporting procedures available to employees, through which workplace concerns may be raised and addressed without fear of retaliation.  Such policies should provide employees with multiple avenues for presenting concerns about working conditions to supervisors and other members of management.  An effective reporting procedure presents employees with several options for reporting concerns to a number of different management-level individuals.  This avoids the problem of having all reports funneled through a single supervisor or member of management, who in some cases may be the source of the employee’s concerns.  An employee who unreasonably fails to use an employer’s reasonable reporting procedures prior to resigning will have greater difficulty in maintaining a claim based on constructive discharge.  Effective reporting procedures also allow employers to become aware of and to address problems in the workplace before they escalate to the extent an employee feels compelled to resign. 

For more information on constructive discharge or workplace reporting policies, please contact one of Rudman Winchell’s experienced labor and employment attorneys. 

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