Constructive Discharge

What Is Constructive Discharge?

Constructive discharge—also known as constructive dismissal or constructive termination—refers to a situation in which an employee quits due to working conditions that any reasonable person would deem intolerable.

While on the surface it may seem like a voluntary resignation because the employer did not technically fire the employee, the law may rule that this employee was essentially terminated.

If a judge determines that an employee was constructively discharged, the ruling can open the door for a wrongful termination lawsuit. This is because the hostile working conditions make the separation involuntary, so the case is treated like a traditional termination.

10 Examples of Constructive Discharge

Constructive discharge can occur for many different reasons. Here are 10 constructive discharge examples that can create a hostile work environment and make employees feel they have no choice but to leave.

Withholding Pay

An employee’s pay is connected to their ability to build security in their lives. Intentionally underpaying an employee or withholding timely pay from them is not only unfair, but it may also violate labor laws, create an untenable work environment, or cause an employee to quit and search for employment that will not jeopardize their financial and personal security.

Employee Discrimination

Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against employees.

Refusing to allow employees to practice religious traditions, excluding disabled employees from job-related activities, and denying promotions to pregnant employees are all examples of discriminatory practices that can make a work environment intolerable and land an employer in legal trouble.

Refusing Accommodations

The Americans with Disabilities Act (ADA) requires employers to make reasonable accommodations for employees with disabilities so that they can perform their jobs to the same standard as people without disabilities.

When these requests are repeatedly ignored or denied, or an employee is punished for making them, it may force that employee to find another employer who’s willing to abide by the law and help them succeed.

Employer Retaliation

The US Equal Employment Opportunity Commission (EEOC) prohibits employers from firing, demoting, or otherwise retaliating against an employee for filing a formal complaint against them for allowing sexual harassment, discrimination, or other illegal activities to continue.

In some cases, however, the employee’s complaints or negative feedback isn’t formally filed but instead shows up in an employee survey. It is still inappropriate for an employer to punish an employee for sharing their feelings about the workplace. This not only affects morale, but it can also contribute to a hostile workplace and cause constructive discharge.

Removing Benefits

Employers use benefits to attract candidates to their organization. When those candidates become employees, many start to rely on those benefits for their wellbeing and ability to do the job.

For example, suddenly taking away a company car or commuter benefits may cause undue hardship in getting to work or participating in work activities. Removing healthcare benefits can be against the law in some cases and jeopardize an employee’s ability to get care for a condition.

These things can cause a great deal of hostility and force an employee to find employment elsewhere as a remedy.

Changing Hours or Location

Changing hours or location is yet another move that can cause undue hardship for an employee. This can especially be the case if the change is sudden and the employee doesn’t have adequate time to make transportation or childcare arrangements.

The law recognizes that employers must sometimes make changes due to financial issues or company restructuring. However, this should never be used as an excuse to target an employee and make the work environment unbearable or unfeasible.

Demotions

Demoting an employee can affect many aspects of an employee’s life, including their morale and financial wellbeing. Targeting an employee through demotion can easily cause hostility in the work environment. When there is no just cause for the demotion, or it is a result of retaliation, it can certainly push an employee out the door.

Public Criticism

It’s unacceptable for employers to berate their employees in private or in front of others. However, there are other ways criticism can be delivered improperly.

Sometimes, it comes in the form of singling an employee out with constant criticism at company meetings or demeaning them in the presence of the entire team. This breaches employee trust, contributes to negative feelings, and may cause an employee to leave.

Ignoring Concerns

If an employee raises concerns about bullying, harassment, or discrimination, it falls upon the management team to conduct an investigation. When those in a position of power turn a blind eye to an employee’s concerns, an employee may feel their only option is to leave the job. This, in turn, sets the stage for potential constructive discharge.

Unsafe Conditions

Forcing an employee to work in conditions that jeopardize their health and safety goes against the laws set forth by the Occupational Safety and Health Administration.

If an employee is essentially given the choice of putting themselves in danger or vacating their position, this can result in constructive discharge and increase the organization’s legal compliance risk.

Legal Requirements to Prove Constructive Discharge

There’s no single state or federal law that prohibits constructive discharge. Instead, those who wish to bring a case against an employer must prove that the organization has made the workplace intolerable by violating one or more labor or anti-discrimination laws, such as the ADA.

When an employer fails to comply with the law, the departing employee is more likely to have adequate grounds for legal action.

An Example of a Legal Violation

For instance, suppose that an employee makes several complaints to the HR team about experiencing sexual harassment from their manager, and HR does nothing to investigate the situation.

If the situation continues, the employee may decide to file a formal complaint with the EEOC. Once the employer finds out about the complaint, they may retaliate by demoting the employee.

This demotion, in turn, creates a hostile working environment for the employee. They’re being professionally and financially punished for trying to escape harassment at work. Any reasonable person may find this situation intolerable and, as a result, leave the job.

In this case, the employer would be held responsible for creating those intolerable conditions by failing to address the harassment in the first place. While the employer never violated a specific constructive discharge law, the employee can likely prove that the organization violated a federal law, such as Title VII of the Civil Rights Act of 1964. By doing so, the employee would fall under being constructively discharged.

Proving Constructive Discharge

If an employee feels they were wrongfully terminated and chooses to bring a lawsuit, the burden of proof in a constructive discharge case lies with that employee.

In order for a termination to qualify as constructive discharge in the legal sense, it must pass this three-part test established by the EEOC:

1. Working conditions must be such that a reasonable person in the complainant's position would have found them intolerable.
2. The intolerable working conditions must be the result of conduct that constituted discrimination against the complainant.
3. The complainant's involuntary resignation must result from the intolerable working conditions.

When defining a “reasonable person,” the law simply means that the average person experiencing the same circumstances would be justified in exhibiting the same behavior.

What Doesn’t Qualify as Constructive Discharge

There are many situations in which an employee may feel forced to resign, but the situation that has forced their resignation is not illegal and, therefore, not constructive discharge in the legal sense.

Some examples of reasons for a resignation that would not qualify as constructive discharge include:

• A change in scheduling applied fairly to all employees
• A reduction in hours or mandatory overtime in a state where mandatory overtime is legal
• A demotion, delay in advancement, reduction in pay, or denial of a raise based on unmet expectations
• Resignation offered as a preferable option to being terminated for cause

While these situations may result in negative feelings, the employee wouldn’t likely have legal standing to bring a constructive discharge case.

What Can Happen If a Constructive Discharge Claim Is Proven Against an Employer?

When a constructive discharge claim is proven correct, an employer can face harsh penalties and be ordered to compensate the employee financially.

Consequently, many of the penalties employers face are the same ones that would be levied even if the employee didn’t leave:

• Front and back pay: The employer must compensate the employee for lost wages or future loss of earnings, especially if their new employment pays less.
• Benefits compensation: The employer must compensate the employee for lost retirement contributions or money spent on healthcare due to loss of benefits.
• Other expenses: The employer must compensate the employee for job-hunting expenses, medical bills, or costs associated with hiring an attorney.
• Pain and suffering: The employee compensates the employee for the negative emotional impact on their personal lives.
• Punitive damages: The employer compensates the employee for undergoing particularly harsh treatment.

Keep in mind that not all of the penalties an employer may face will be financial in nature. An employee may also be granted injunctive relief, which simply means that an employer will be required to take a certain action or refrain from a particular behavior.

In the case of constructive discharge, a common injunctive relief is requiring the employer to give the employee their position back with the same compensation package.