Constructive discharge: When is quitting actually a termination?

California employees are often faced with a difficult situation: workplace conditions have become so intolerable that they must quit their job. In these situations, California law does not always treat an employee's resignation as quitting. Sometimes, workplace conditions can be so bad that the resignation is actually, for legal purposes, a termination. Constructive discharge, sometimes called "constructive dismissal" or "constructive termination," is legal doctrine that holds employers accountable for making a workplace so intolerable that an employee is forced to quit. This doctrine can be very important in determining whether employees may be entitled to additional compensation from their former employer.

Why is constructive discharge important?

If employees are fired, they have several rights that they don't have if they resign. Examples vary from case to case, but they often include:

  • Eligibility for unemployment benefits.
  • The right to a wrongful termination lawsuit.
  • And increased damages in retaliation or discrimination lawsuits.

Also, where an employment contract exists requiring good cause for termination, the doctrine of constructive discharge also prevents employers from forcing their employees out if no good cause exists.

For these reasons, the doctrine of constructive discharge is an important one in securing employee rights.

When does quitting your job become constructive discharge?

In general, an employee must be treated so poorly that a court will view the termination as having been coerced. According to the California Supreme Court:Constructive discharge occurs when the employer's conduct effectively forces an employee to resign. Although the employee may say 'I quit,' the employment relationship is actually severed involuntarily by the employer's acts, against the employee's will. As a result, a constructive discharge is legally regarded as a firing rather than a resignation.

Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1244–1245.

What elements does an employee need to show to prove constructive discharge?

The California Supreme Court's formulation of the constructive discharge doctrine gives us an idea of why courts have the doctrine, but it doesn't really explain what employees need to show to prove that their resignation was actually a termination. Accordingly, the courts have adopted an objective test to determine if a resignation is actually a constructive discharge: Did the employer either create or knowingly permit work conditions that were so intolerable that a reasonable employer would realize that a reasonable person in the employee's position would be compelled to resign? ((Turner v. Anheuser-Busch, Inc., supra, 7 Cal.4th at p. 1251.))

In constructive discharge cases, the intolerable conditions must have been sufficiently extraordinary and egregious to overcome the normal motivation of a competent, diligent, and reasonable employee to remain on the job to earn a livelihood and to serve his or her employer. ((Thompson v. Tracor Flight Systems, Inc. (2001) 86 Cal.App.4th 1156.)) Also, the employer must be aware of the impact that these conditions have on the employee. ((Gibson v. ARO Corp. (1995) 32 Cal.App.4th 1628, 1640, citing Turner v. Anheuser-Busch, Inc., supra, 7 Cal.4th at p. 1251.))

Importantly, these intolerable work conditions must have been present at the time that the employee resigned. They must also be continuous; single, trivial, or isolated acts of misconduct by an employer are generally insufficient.

So, to break this test down, an employee must prove the following elements to show that they were constructively discharged:

  • Intolerable work conditions existed at the time of the employee's resignation.
  • The work conditions are so unusually adverse that a reasonable employee would have felt compelled to resign.
  • The employer intentionally created or knowingly permitted these intolerable work conditions.
  • A reasonable employer would have realized that a reasonable person in the employee's position would be compelled to resign.

What is an intolerable work condition?

The biggest hurdle in determining whether a resignation is a constructive discharge is whether work conditions were intolerable. The bar to showing intolerable work conditions is actually pretty high. Intolerable work conditions often include constant yelling, screaming, intimidating, or disparaging a plaintiff. ((Steele v. Youthful Offender Parole Board (2008) 162 Cal.App.4th 1241, 1259.))

On the other hand, California courts have found that the following situations alone do not result in intolerable work conditions:

  • A reduction in pay.
  • A demotion.
  • A transfer to a different branch.
  • Single incidents of mistreatment.
  • Reassignment to graveyard shifts.
  • A former subordinate's promotion over the employee, requiring the employee to answer to a person they used to supervise.
  • Unfair performance evaluations.

What can employees do?

If an employee hasn't quit yet, they should talk to an employment lawyer about the facts of their situation. Employees should not assume that their working conditions meet the test necessary for a constructive discharge. If they make the assumption that their resignation is a termination, they may be incorrect and they may be waiving important rights. Instead, it's best to discuss these issues with a lawyer comfortable with constructive discharge issues.

If, on the other hand, the employee has already quit, that employee may have important legal rights. These legal rights may have short time limits, however. So it is important for the employee to act fast. The employee should contact an employment lawyer to determine whether their employer violated their rights and perhaps wrongfully terminated them through a constructive discharge.

If you have questions about leaving your job, give Optimum Employment Lawyers a call at (949) 954-8181. All consultations are complimentary and confidential.