Under federal law, a “constructive discharge” occurs when the employer deliberately makes working conditions so intolerable that a reasonable person in the employee’s position will feel compelled to resign. Intolerable can be a sliding scale when it comes to environment. If an employee quits because of a petty change in the job duties, or because of insignificant things that have always bothered the employee about the job, a court would most likely not find that a constructive discharge occurred.
Let’s say for example, that Joan takes a job on a construction site and is required to utilize a porter-potty for her bathroom breaks. She complains to the boss that they smell and are intolerable to her. After three days on the job she leaves because she finds it too unbearable to return. Does she have a claim for constructive discharge? Most likely, not. Though the use of a porter-potty may be intolerable to Joan, the construction company did not create the environment to make things more difficult for Joan, it is a reality of working on a construction site.
What about Adam who takes an office job as an assistant for Marla, a VP at a very large company. She is very demanding. Marla realizes that Adam is not handling the workload as well as she feels he should and he consistently makes mistakes. Rather than firing yet another assistant, she decides that she will make him as miserable as he is making her. She consistently calls him names in front of the other employees; refuses to let him take his lunch breaks when he wants to or complains that he takes too many restroom breaks. She has also told him that males make terrible assistants. Adam feels defeated and quits. He gives his notice. However, he can only find a position in another office but at a far lower salary. Has Adam been constructively discharged? Yes. Since Marla was unhappy with Adam and created a situation in which he would be so miserable he would leave rather than her having to fire him. This is the essence of constructive discharge.
An employer faces stiff penalties if an employee can prove that they were constructively discharged. They may be required to pay:
Back-pay, which is the wages or salary an employee would have made from the time they quit until they return to work;
Front-pay, or payment of normal wages or salary from the time the employee wins the case until they are either re-hired or until they find a similar job;
Attorney’s fees, costs and expenses;
Compensatory damages, which is money meant to pay the employee for their pain and suffering or mental distress caused by the discharge;
Punitive damages, which are to punish the employer for its wrong-doing.
The issue of determining a constructive discharge is currently before the Supreme Court in the case of Green v. Donahue. It will be important to keep our eyes on the decision in this case as it could impact your business and how constructive discharge is interpreted by Courts in New York.
While there are advantages to having an employee quit rather than be discharged, such as avoiding liability for unemployment benefits, creating a constructive discharge, even unintentionally, can result in liability for the company. A properly documented discharge is often the best way to eliminate an unsatisfactory employee.