Sometimes, employees end up on unpaid leave after complaining about discrimination. Then the employee’s lawyers try to negotiate a settlement that includes returning to work. If you turn down such terms, make sure you get clarification on whether the worker will return even if you don’t meet her demands.
If you discharge too early, she may collect unemployment benefits. But if you hold your fire and wait until she’s told you she won’t return unless you meet her demands, you may be able to block those benefits under a legal doctrine known as constructive voluntary leaving.
Recent case: Stephanie was suffering from stress and went on a leave from her marketing job at Merle Norman Cosmetics. This happened one month after she filed a claim with the California Department of Fair Employment and Housing, alleging that the company retaliated against her for reporting sexual harassment.
Her attorneys began negotiating a settlement that included her return to work. Merle Norman rejected the terms and fired her.
Stephanie applied for unemployment compensation. The company successfully contested the benefits, arguing it had no choice but to fire her because she made unreasonable demands. Thus, it was Stephanie’s fault she was fired.
Stephanie appealed, and her lawyers argued that she never got a chance to go back to work without conditions. They noted that Merle Norman fired her at the same time it rejected her latest settlement offer, without seeing if she would return anyway.
In the court’s view, if Stephanie’s lawyers were playing pre-litigation poker, then Merle Norman could not simply declare itself the winner—it had to call and see whether Stephanie was bluffing. She got the benefits. (Kelley v. Merle Norman Cosmetics, No. B244098, Court of Appeal of California, 2nd Appellate District, 2014)