What Does Constructive Discharge Mean for Employers?

How can forcing an employee to resign affect unemployment compensation?

New York recognizes constructive discharge in the workplace. Furthermore, understanding the legal ramifications is vital for employers.

What is constructive discharge?

Under normal conditions, when an employee quits, employers do not have to pay unemployment claims. Constructive discharge refers to creating intolerable work conditions so an employee will quit. Originally, this practice arose when employers fought against employees’ efforts to form unions.

The National Labor Relations Board (NLRB) adopted this provision in the National Labor Relations Act (NLRA). It allowed employees to sue employers if they purposely created intolerable conditions that would force employees to resign.

However, the courts extended the NLRA to apply to others situations as well. They also applied it to non-union employees. Essentially, when intolerable work conditions force an employee to resign, courts view the resignation as termination. Therefore, employees are able to receive unemployment compensation.

In addition, when suing their employers, employees would have to show that work conditions were intolerable.

What determines whether work conditions are intolerable?

An employee must show that the working conditions were so unbearable that an average person in their situation would have also felt compelled to quit. The standards for this are high. For example, a woman does not meet the intolerable standard when she claims her pay was lower than what a man would receive doing the same job. The intolerable conduct would have to be egregious. Humiliating the employee for no reason and demoting them would be an example. In some states, abusive bullying might qualify, even if not based on discrimination.

At will employment in New York

As in many states, New York has at will employment. At will employment means the employer can fire an employee at any time for any reason. Although, they cannot fire an employee based on an illegal reason, such as discrimination. In addition, an employee can quit or resign at any time. In New York, giving two weeks notification is not necessary.

Do you have concerns about forcing an employee to resign?

If you have questions about constructive discharge, arrange a consultation with an experienced employment defense lawyer. Call Stephen D. Hans & Associates, P.C. at (718) 275-6500.