California Law of Constructive Discharge

by | Mar 31, 2023 | Employment |

Constructive Discharge in Violation of Public Policy

A constructive discharge claim in California refers to a situation where an employer’s misconduct effectively forces an employee to resign.  In such a situation, the employee has a right to sue for constructive discharge in violation of public policy, which is equivalent to a claim for wrongful termination in violation of public policy.

There are several elements that an employee must prove in order to succeed in a constructive discharge claim. These include:

  1. An employer-employee relationship. While in some cases an independent contractor may be able to sue for constructive discharge, in general these claims require an employer-employee relationship.
  2. Working conditions that violated public policy. Generally, working conditions violate public policy if they violate some written codified law, which could be a statute, regulation, municipal code, the California Constitution, or other written law. Conditions that only violate the employer’s own company policies, but no written law, probably do not violate public policy.
  3. Employer intent or knowledge. The employer must have intentionally created or knowingly permitted the unlawful working conditions.  If the employer did not intentionally create the working conditions, this element is generally satisfied by proof that the employee put the employer on notice of them and the employer failed to remedy those conditions within a reasonable time period, such that the employer knowingly permitted those conditions to remain.
  4. The working conditions were objectively intolerable. The unlawful working conditions must be truly intolerable, such that any reasonable person in the employee’s position would also have felt compelled to resign because of the conditions.  Note, to be intolerable, the working conditions must be more than trivial.
  5. The employee resigned because of the working conditions. Even if the employee was forced to work in intolerable conditions, there is no constructive discharge if the employee resigned for other reasons (e.g., to take a higher paying job, to relocate, to return to school, to retire, etc.).  The intolerable conditions must have been a substantial factor in the decision to resign.
  6. The resignation caused harm to the employee. The employee must have suffered some harm from the resignation.  This can be lost income or lost benefits, which are forms of economic harm, but this can also be emotional distress.  If an employee was constructively discharged, there is almost always some compensable harm, so this element is fairly easy to establish so long as the other elements are established.

If all of these elements are present, then the employee may be able to recover damages for lost wages, emotional distress, and other losses resulting from the constructive discharge.  Note, constructive discharge cases can be trickier than a wrongful termination case, and in particular it can be difficult to prove (a) the existence of intolerable and illegal working conditions, (b) that the employer intentionally created or knowingly permitted those conditions, and (c) that those conditions were the reason for the employee’s resignation.  Thus, it can be useful to consult with and/or retain an employment attorney to advise you before you resign, to help you navigate the process in a way that best preserves the best evidence for your case.

In general here are some steps an employee may want to take before resigning to protect his/her legal rights to pursue a post-resignation claim for constructive discharge:

  1. Consult an Attorney. An experienced employment law attorney can provide guidance on how to best pursue a constructive discharge claim, as well as advise on any potential legal defenses or counterclaims that the employer may raise.
  2. Document the Intolerable Conditions. It is essential to document the intolerable working conditions. Further, any evidence that the employer intentionally created or knowingly permitted the intolerable conditions should be documented.
  3. Give Notice of the Intolerable Conditions to the Employer, and Document Your Notice. Before resigning, it is almost always best – and sometimes absolutely necessary – that the employee provide the employer with notice of the intolerable conditions, and then give the employer a reasonable time to remedy the conditions, before resigning. This may be necessary to prove that the employer knowingly permitted the intolerable conditions to exist, leaving the employee with no choice but to resign. Generally it is best to provide such notice in writing or electronically, but oral notice can suffice.  If notice is provided orally, it is best to document it, such as memorializing the conversation in a follow up email.  It is important to document that you gave notice so the employer cannot simply deny that this happened.  Thus, if you text notice of an intolerable condition to your supervisor, keep a screenshot of the text conversation since text messages can be inadvertently lost or deleted.  If you delivery a written notice to your employer, keep a copy of it for your records and document how it was delivered.  Emails are often the best means to give notice since then you have proof the message was sent, at what time, on what date, etc.
  4. Do Not Give a False Excuse for Your Resignation. Often employees want to resign with the least fuss and the least conflict, so they tell a “white lie” about why they are resigning, offering some vague or benign reason to avoid confrontation. The employer can later use those false statements by the employee to argue that the employee did not actually resign because of the intolerable working conditions. Note, you do not have to give any reason for your resignation.  It is acceptable to resign without telling the employer why, and this is better than providing a false reason to avoid confrontation.  In short, when you resign, it is best to give the true reason – to identify the intolerable conditions that forced your resignation – but if you wish to avoid that confrontation, simply give no reason at all, but do not give a false reason to ease your departure.
  5. Do Not Sign Anything When You Resign. Often employers will want to do an exit interview and/or have you sign some paperwork related to your departure.  You are under no legal obligation to do so.  If the employer tries to hold your final check hostage until you sign exit paperwork, that would likely be a further violation of law and could subject the employer to additional claims.  The main reason not to sign any exit paperwork is that sometimes an employer may put some kind of release language in the exit paperwork, so that you are signing a release of all claims against the employer, which could preclude you from later suing for constructive discharge.  The safest course of action is to decline to sign anything in connection with your separation of employment.
  6. Keep Good Records. Keep copies of all relevant documentation, including your resignation letter, any complaints you made, and any response from management or HR. These records will be important evidence if you pursue a constructive discharge claim.

Note, when you resign from a job, you are generally not allowed to seek unemployment benefits in California.  However, if you resign due to a constructive discharge, then you may be entitled to such benefits, the same as if you were terminated from the job.  The forms submitted to the Employment Development Department (the “EDD”) should include a place for you to indicate the reason for your separation of employment, and one of the options should be constructive discharge.  While the employer may dispute your right to unemployment benefits after you resign, if you can convince the EDD that you were constructively discharged, they should approve you for benefits.  Note, if you have an employment attorney handling your constructive discharge claim, they can likely assist you in any dispute with your employer over your right to EDD benefits.

In conclusion, if you are considering resigning from a job due to intolerable working conditions, it is essential to take steps to protect your legal rights.  It is important to note that constructive discharge claims can be complex, and it is advisable to seek the guidance of an experienced employment law attorney when pursuing such a case, preferably before you resign.  Also, keep in mind that there is a limited time after you resign to pursue a claim for constructive discharge, so you should not delay seeking legal counsel or otherwise prosecuting your claim.