Constructive Discharge: FAQs

Constructive discharge occurs when employees claim that their working conditions were so intolerable that they were forced to quit. Employers must stay within federal labor laws so they don’t contribute to factors that trigger constructive discharge claims, and don’t heighten the risk of employee lawsuits.

This is how one state supreme court defined constructive discharge: “An employee who is forced to resign due to actions and conditions so intolerable or aggravated at the time of his resignation that a reasonable person in the employee’s position would have resigned, and whose employer had actual or constructive knowledge of the intolerable actions and conditions and of their impact on the employee and could have remedied the situation, but did not, is constructively discharged.”

What falls into the intolerable or aggravated category? Think: actions intended to humiliate (e.g., demoting a vice president to janitor overnight); actions intended to harass (e.g., requiring a black employee to work extra hours for the same pay as white co-workers and punch a clock while others do not); actions intended to destroy the employee’s career or guarantee job loss (e.g., sudden, unexplained drops in performance ratings, skipped promotions, forced demotions, pay cuts).

Factors that may contribute to a constructive discharge claim—either singly or in combination—include whether an employee suffered:

• a demotion;
• a reduction in salary;
• a reduction in job responsibilities;
• a reassignment to menial or degrading work;
• a reassignment to work under a younger supervisor;
• an involuntary transfer to a less desirable position;
• badgering, harassment, or humiliation by the employer;
• offers of early retirement or encouragement to retire;
• offers of continued employment on terms less favorable than the employee’s former status;
• a threat of violence or actual physical assault; or
• a threat of termination.

There are other factors that don’t substantiate claims of constructive discharge, such as:

• a one-time inappropriate comment from a supervisor;
• expecting employees to live up to what’s demanded on the job;
• not being terribly friendly or communicative; and
• handing out a less-than-expected pay raise or even a demotion or transfer, as long as the supervisor can prove that such a negative report is valid.

You don’t have to feel handcuffed in your dealings with an employee who has filed a complaint. But you do have to be very careful with any disciplinary action taken, particularly after the charge has been filed. Here are six points to keep in mind before you discipline an employee who could strike back with a claim of constructive discharge.

1. You must be able to show that the behavior of the employee you want to discipline violates written company policy.
2. You have to prove that the employee was aware of the policy and the possible consequences for violating it.
3. Your recommended discipline must be consistent with actions you have taken in the past against other employees who have not filed any charges against the company. Make sure both extremes are avoided – special treatment or retaliation.
4. You should never try to build a case against employees who have filed a complaint. Putting them under special scrutiny or constructing a file filled with reprimands and/or unsatisfactory performance appraisals will make matters worse.
5. Remember that even if an employee’s original complaint against the company is dismissed, the person is still protected. Retaliation under such circumstances can turn an innocent employer into a guilty one if the employee can prove retaliation.
6. Take a close look at all undesirable jobs. Make sure supervisors don’t use them as a weapon to punish complaining employees.