When is a resignation not a resignation? When a court declares
it a "constructive discharge."
Suppose you have an employee you want to get rid of for a
variety of reasons, but you're worried that firing her might
look like race or age or gender discrimination. So you try to force
her out. You reassign her to a windowless office half the size of
what she had. You assign her the least desirable work. You tell
other employees to shun her. And after a few weeks, she quits.
Then-surprise! You get slapped with the lawsuit you feared,
claiming she was effectively terminated. What's up with
that?
The employee's action relies on the legal concept
"constructive discharge." It means that conditions at
work had become so intolerable that any reasonable person would
have quit. It doesn't matter whether you fired her or she threw
in the towel; if a court rules the circumstances a constructive
discharge, you're just as liable.
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Not that it's normally illegal to fire someone who's not
working out for your company. In most states, employees are
presumed to work on an "at will" basis. This means you
can terminate the employee at any time for any reason (or no reason
at all). But it's illegal in the United States to fire an
employee because of age, race, gender, religion, national origin
or, in some states, sexual orientation. You can't terminate an
employee because of a handicap if, with accommodations, the
employee can do the work. And you can't terminate someone if
doing so violates public policy-such as firing the guy who told the
press about your illegal dumping of toxic waste.
Accordingly, claims of constructive discharge come in tandem
with claims of some illegal activity, such as discrimination. And
in those cases, the fact that the employee resigned may not be an
adequate defense.
Courts have ruled that it doesn't count as a constructive
discharge merely to demote someone or reduce their pay or change
their duties or fail to promote them. To count as a constructive
discharge, there has to be a whole pattern of behavior aimed at
making conditions intolerable. Therefore, employees don't win
these cases very often.
That doesn't mean it's an uncommon claim. The word is
out among disgruntled employees and their lawyers that you can quit
and still sue. The hard part is proving that the employer was
trying to force the employee out—and for an illegal
reason.
The best way to avoid a constructive discharge lawsuit is to be
evenhanded in your treatment of employees, keep the lines of
communication open, and follow up on complaints of poor conditions.
A few additional precautions in case you get sued anyway:
If you hear that an employee finds working conditions
intolerable, look for solutions.
When an employee says there's a safety or environmental
violation, investigate and correct the problem. Don't take
action against the employee.
Keep good employment records, so you can document why you
decided to promote this person instead of that one, reassign duties
or territories, and so on.
If an employee quits, then says he was mistreated, send him
a letter saying he was welcome to stay and wasn't discharged.
It might help you build a case later.
Jane Easter Bahls is a writer in Rock Island, Illinois,
specializing in business and legal topics.