Constructive Discharge

All too often, an employer assumes that if a disgruntled employee quits the job, it can escape liability for wrongful discharge.  After all, a discharge cannot be wrongful if there was no discharge at all.  Or so goes the theory.

In reality, the law recognizes the possibility that an employee may quit a job under circumstances that are so stressful, so intolerable, so extreme or outrageous that resignation is effectively unlawful termination.  Such a resignation is, in effect, a discharge; more specifically, a constructive discharge.

Intolerable work conditions created by hazardous or unsafe workplaces may force a constructive discharge.  So, too, can intolerable work conditions created by sexual harassment or flagrant acts of race discrimination or religious discrimination.  The test for whether a resignation can be treated as a wrongful (constructive) discharge is whether a reasonable employee, confronted with like circumstances, would react by leaving the job.

Among the circumstances that have been recognized in constructive discharge claims are the following:

  • A cut in pay for doing essentially the same work as before;
  • Demotion to a position of less responsibility or pay;
  • Transfer to a shift involving lesser responsibility or pay;
  • A change in job title to one of lesser status or prestige;
  • Reassignment to a job involving no work, or menial work;
  • Where compensation is affected by the amount or success of work (for example, a commission), a reassignment to accounts, customers or districts that are significantly less remunerative;
  • A transfer to a job site significantly less convenient to the employee;
  • Imposition of conditions that require personal expenses by employee that are not reimbursed;
  • Significantly increased responsibilities with no reasonable adjustment in working conditions to enable the new responsibilities to be met;
  • Revocation of the usual conveniences or amenities of the workplace;
  • Unreasonable refusal to provide normal or accustomed resources in solving problems or meeting increased responsibilities;
  • Infliction of humiliation;
  • Unwarranted criticism of an employee or the employee’s job performance to co-employees with no need to know;
  • Demeaning or belittling references to the employee;
  • Expressions of a desire that the employee leave the company;
  • Exclusion of the employee from meetings or social events at which he or she would normally expect to be included;
  • Requiring the employee to follow bothersome or embarrassing procedures not required of similarly situated employees;
  • Demands or requests for sexual favors as a condition of retention, promotion, advancement, or other work-related benefit;
  • Creation of a hostile workplace that rises to the level of sexual harassment;
  • Repeated and unwelcome requests for dates, socializing, or sexual favors;
  • Offensive touching of an employee;
  • Lewd or lascivious jokes directed to, made about, or made in the presence of an employee;
  • References to genitalia or bodily functions, especially in coarse or vulgar terms;
  • Repeated and demeaning references to women (or men, if the employee is a man);
  • Reference to women generally, or to a particular woman, whether or not an employee), in sexual terms;
  • Displays of offensively sexual photographs in places where the employee is likely to confront them’
  • Unwarranted inquiries for details of the employee’s romantic relationships, sexual partners, or marriage;
  • Inquiries into the employee’s sexual habits or preferences for sexual activity;
  • Offensive accounts of one’s own sexual activities or desires;
  • Exclusion of employee (generally, a female employee) from social events at which business is discussed;
  • Continuation of offensive behavior such as the above, after the employee has asked that it cease or made it clear her distaste for it;
  • Demeaning or belittling references to the employee’s race or religion;
  • Use of racial or religious slurs, or the refusal to act when racial or religious slurs are used by co-employees;
  • Toleration of a workplace that is hostile to the employee’s race or religion;
  • Imposition of requirements repugnant to the employee’s religion, such as required attendance at prayer meetings;
  • Assignments to unpleasant or demeaning work assignments based on the employee’s race or religion; and
  • Refusal to accommodate reasonable requests for time off or shift-swapping on Sabbath days or to attend religious services, especially if the employer routinely allows such accommodations in other situations.

Courts have widely recognized wrongful discharge suits filed by employees who resigned their jobs but subsequently characterized their resignation as a constructive discharge.  As the list above suggests, the circumstances underlying a constructive discharge can vary widely.  For example, the doctrine of constructive discharge was recognized in a case brought by a software network engineer who was demoted for refusing to load copyright-protected software onto personal computers and quit the job claiming that he was humiliated and harassed (Nguyen v. Technical & Scientific Application, Inc., 981 S.W. 2d 900 (Tex. App. 1998). It was honored in a case involving a payroll clerk who quit after she refused to violate the tax law on payroll withholdings (Strozinsky v. School Dist. of Brown Deer, 237 Wis. 2d 19, 614 N.W.2d 443 (2000). It was upheld in a case involving an employee who was raped by a supervisor and quit and filed a sexual harassment claim (Champion v. Nationwide Sec., Inc., 450 Mich. 702, 545 N.W.2d 596 (1996). Constructive discharge was also recognized in a claim brought by an employee who returned from medical and family leaves of absence and was given a new assignment with substantially lower salary and less responsibility.

Yet a mere reduction in an employer’s overtime hours will not generally give rise to a constructive discharge claim, nor will the criticism an employee receives from a manager, or the loss of a light duty work schedule.  No constructive discharge was found to exist in one age discrimination claim brought by an employee who himself proposed to resign, negotiated for a severance package, and demanded a higher payoff on threat of legal action.  Nor was the constructive discharge theory recognized in a case where an employee alleged that she was subjected to verbal and mental harassment and abuse.

Most states recognize constructive discharge and treat it the same as express discharge in wrongful termination cases.  Few states, however, address the constructive discharge doctrine directly in their statutes, choosing instead to define the area on a case-by-case basis.  Arizona is an exception to the rule, addressing constructive discharge comprehensively in its Employment Protection Act.

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