Lawsuit Prevention for Employers

Background

Employers make a big mistake when they decide against firing a problem employee, and instead resolve to “just get him to quit.” Unknown to many employers, employees who “quit” under such circumstances are legally deemed to be discharged in the event that the employer’s conduct would have caused a reasonable person in the employee’s position to resign.

Although the employee may say “I quit,” the employment relationship is treated by the courts as having been terminated against the employee’s will as a result of the employer’s acts.

This form of termination is commonly known as a constructive discharge. An employee who has been constructively discharged is legally empowered to sue the employer for wrongful discharge and may assert all of the rights available to any employee who is fired from his/her job.

The Problem

Employers who make this catastrophic mistake, however, suffer many disadvantages that other employers sued for wrongful discharge are not presented with.

In a constructive discharge case, the employee must prove that the employer knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee’s resignation that a reasonable person in the employee’s position would have been compelled to resign. This requirement is satisfied by knowledge on the part of either the employer or any of its officers, directors, managing agents or supervisory employees.

For example, constructive discharges often arise in discrimination claims, after the victim has complained about discriminatory acts and management has refused or failed to correct the conditions. Similarly, an employer’s failure to reimburse an employee for mileage and work-related automobile maintenance expenses has been held to support a cause of action for constructive discharge in violation of public policy.

In determining cases alleging constructive discharge, courts have considered such factors as demotion, reduction in salary, reduction in job responsibilities, reassignment to menial or degrading work, reassignment to work under a younger or more junior supervisor, badgering, harassment or humiliation by the employer calculated to encourage the employee to resign and offers of early retirement or continued employment on terms less favorable than the employee’s former status.

Other examples include:

1. Continued harassment of an employee due to his sexual orientation;

2. A supervisor’s continuous course of “yelling and screaming,” unfair and harsh criticism or threats to fire an employee;

3. Demands by a supervisor that an employee obtain a certificate if he wanted to keep his job, knowing he was too busy to do so. In one case such a certificate “demand” was found to be “false and pretextual” and intended to force the employee’s resignation in order to replace him with the supervisor’s friend and

4. A supervisor’s extended campaign to get an employee fired, including repeated efforts to invent documentation to support the termination, combined with frequent reorganization of the employee’s duties and demands that the employee process unlawful orders.

Individual or isolated acts are generally insufficient to support a constructive discharge claim, in the absence of “aggravated” misconduct by the employer or one of its supervisors. For example, a crime of violence against the employee, or a demand that the employee commit a crime may qualify.

Normally, someone in a position of authority must be aware of intolerable conditions before an employee can prevail on a constructive discharge claim. Notice to any supervisor will normally suffice.

The Bottom Line

In the author’s experience, employers who feel compelled to fire an employee almost always have ample legal justification for doing so.  The problem arises when they fail to bring proper care to identifying the most legally defensible basis to justify the disciplinary action being contemplated.  When employers decide to take “shortcuts” by trying to force a resignation, they may be stepping into a trap they would never consider if they understood the legal exposure that awaits them.

Conclusion

Once it is shown in court that the employer committed a constructive termination, it is too late for the employer to reverse fields and defend on the basis that it had ample legal justification to fire the employee in any event.  The predictable rejoinder will be:  “Well, if that is the case, why on earth would the employer engage in a deceitful subterfuge by dishonestly manipulating the plaintiff’s resignation instead of simply firing him?”

This often presents an insurmountable obstacle, because once the judge and jury discover that the employer’s actions were even partially based on dishonest motives, it is usually “lights out” for the defense.  The game is over, and the jury has only one task remaining: to determine what number to insert before the six (or seven) zeroes.

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Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over three decades. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives.

While no one can guarantee a future free of lawsuits, Putnam has compiled a remarkable record of success: Not one employer-client has been sued in 36 years with his system of precautions in place.

For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well. 

You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. www.jaygputnam.com/articles-by-jay-g-putnam/