Constructive Discharge

What Is Constructive Discharge?

In the United States, constructive discharge is another term for involuntary resignation, a form of wrongful termination in which an employer’s actions create an intolerable situation such that an employee feels they have no other choice than to resign. The term constructive discharge is synonymous with constructive dismissal or constructive termination; all three describe the same idea of an employee leaving under nominally voluntary terms as the result of a hostile workplace or intolerable employment situation. These situations are referred to as discharge, dismissal, and termination because the separation is in fact involuntary despite having the appearance of a voluntary departure.    

Legal Requirements for Constructive Discharge

While there is no single state or federal law forbidding constructive discharge in the United States, the legal definition of constructive discharge depends on a violation of labor laws, making it de facto illegal and grounds for legal action on the part of the departing employee. 

The burden of proof in a constructive discharge case lies with the accuser. In order for a termination to qualify as constructive discharge in the legal sense, it must pass this three-part test established by the Equal Employment Opportunity Commission (EEOC): 

1. Working conditions must be such that a reasonable person in the complainant's position would have found them intolerable.

2. The intolerable working conditions must be the result of conduct that constituted discrimination against the complainant.

3. The complainant's involuntary resignation must result from the intolerable working conditions.

While reasonable is a subjective word, to be classified as constructive discharge, the intolerable working conditions must violate one or more labor laws, such as those related to the Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, or any other state or federal labor legislation. 

Fair Constructive Discharge

There are many situations in which an employee may feel forced to resign, but the situation that has forced their resignation is not illegal and therefore not constructive discharge in the legal sense. Some examples of reasons for a resignation that would not qualify as constructive discharge include:

• A change in scheduling applied fairly to all employees

• A reduction in hours or mandatory overtime in a state where mandatory overtime is legal

• A demotion, delay in advancement, reduction in pay, or denial of a raise based on unmet expectations

• Resignation offered as a preferable option to being terminated for cause 

Constructive Discharge Gray Areas 

In California, in order to prove constructive discharge, an employee is required to prove that their employer knowingly created or allowed a situation that forced an employee or employees to resign. However, it’s not clear whether that knowledge is required for constructive discharge elsewhere. It seems as though a situation in which the employer is unaware of the intolerable working conditions would still legally qualify as constructive discharge if the conditions were judged hostile or discriminatory, as it is the employer’s responsibility to be aware of such conditions, but it is unclear whether constructive discharge can still be considered applicable if the employer is unaware of a situation that is not also illegal under another statute.