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What is Constructive Dismissal?

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In the state of California, the terms constructive discharge, constructive dismissal, or constructive termination are used to refer to situations where an employer has intentionally created or allowed a hostile work environment that is so toxic and intolerable for an employee that they are forced to quit.

Wrongful constructive termination refers to situations where the reasons behind the dismissal would be grounds for a wrongful termination claim under California state law if the employer had fired them directly. As with a standard wrongful termination case, wrongful constructive termination may be based on the applicable exceptions to California’s at-will employment laws.

Some situations that may not warrant but can contribute to a constructive termination claim include:

  • Severely reduced hours
  • Increased workload with no assistance
  • Unaddressed harassment from coworkers
  • Being consistently unduly reprimanded

 

Wrongful Constructive Dismissal Laws in California

The purpose of wrongful constructive termination law is to protect an employee’s right to sue for wrongful termination in the event that they were forced to quit rather than having been fired.

It is not enough just to claim wrongful constructive termination. The employee must prove two things:

  • The employer committed an act of workplace retaliation by intentionally creating or allowing the creation of working conditions that were intolerable enough as to cause the employee to have no other choice than to quit.
  • The employer did not have the right to terminate the employee, and if they had, the employee would have been able to file a valid wrongful termination claim against them.

In California, if an employee is not part of a union, the employment relationship is considered at-will by default, though there may also be specific terms in their employment contract that verify it. This means that the employer does not have to give reason or notice in order to terminate an employee. They also may create or encourage hostile working conditions in general.

There are, however, some exceptions to this standard that may allow for an employee to claim wrongful constructive dismissal.

 

How is Constructive Dismissal Defined?

According to California state law, there are three factors in determining constructive dismissal:

  • The employer intentionally created or knowingly permitted certain conditions.
  • The conditions were so intolerable that the employee felt forced to quit.
  • The employer should have reasonably known that the conditions would force a reasonable employee to quit.

There are many methods an employer may use to force someone to resign such as discrimination, harassment, and intimidation. However, if the working conditions were merely bad, but not completely intolerable, it is not enough to claim constructive termination. There are many ways that an employer may make things difficult for an employee that individually do not constitute intolerable conditions such as:

  • Reduced hours or unsavory shifts
  • Reduced pay or demotions
  • Transfers and reassignments
  • Unfair reprimands and evaluations
  • Rude coworkers and supervisors

It is also not enough that intolerable conditions existed. The employer must have been aware and either intentionally created them, or knowingly permitted them to occur. The point of a constructive dismissal is that an employer has terminated an employee by forcing them to quit.

Although California is an at-will employment state, employers are still prohibited from discriminating against their employees. An employee can not be terminated due to being a part of any of the following protected classes:

  • Age
  • Disability
  • Gender/Sex
  • Pregnancy
  • Race
  • Religion
  • Sexual Orientation

They are also protected from retaliation in the event of:

  • Whistle Blowing
  • Sexual harassment complaints
  • Taking protected leave

If an employer fired an employee due to one of these reasons, that employee may have the right to claim wrongful termination. But if they resign, they lose that right. This can be a factor in an employer deciding to force a resignation rather than issue a termination.

 

Constructive Dismissal Examples in California

There have been many instances where an employee has believed that they were constructively terminated, but the court held that the conditions were not enough to qualify such as:

  • The presence of a workplace violation
  • A single isolated incident of discrimination
  • A demotion due to a poor evaluation
  • Being changed from full time to part time
  • A change in pay or bonuses
  • Job duties not being what the employee expected
  • The employee personally believing they should be paid more

Some examples of instances where the courts agreed that conditions may qualify as constructive termination include:

  • An employer failing to reimburse their employee for business expenses to the point that the employee was unable to cover their own cost of living
  • Consistent ongoing patterns of discriminatory behavior due to age, race, or sex
  • Excessive and aggressive verbal harassment in a hostile work environment
  • Physical threats and harassment including job performance sabotage
  • A well performing employee suddenly singled out and being subjected to harsh reprimands, inaccurate poor performance reviews, and verbal harassment

 

Why Do Employers Want Employees to Quit vs Firing Them?

When an employee resigns, they lose some of the rights they would have had if they had been fired, including but not limited to:

  • Unemployment benefit eligibility
  • Increased damages for discrimination or retaliation claims
  • The right to sue for wrongful termination

In order to avoid having a former employee exercise any of these rights, an employer may try to force them to quit rather than firing them directly. In those situations, the concept of constructive termination allows for an employee to regain their rights. It also prevents employers from circumventing clauses in employment contracts that demand any termination have a reasonable motive.

 

What Should I Do if I’m Being Forced to Quit?

Before resigning, an employee who believes they are being forced out should speak with an employment lawyer. There is no guarantee that the details of their situation will qualify as a constructive termination, and if not, resigning will forfeit their right to sue. It is better to get legal advice from an experienced employment attorney before making any major decisions.

In the event that the employee had resigned already, they will need to know what their options are, what rights they have, and if they have a case for wrongful constructive termination.

 

What if an Individual Stays Employed Rather Than Being Forced to Quit?

An employee can only claim constructive termination after they have been forced to resign, not before. Though staying at a job under intolerable conditions does not necessarily count against a later claim. It is reasonably understood that a person may have no choice but to stay in such an environment to the detriment of their own wellbeing. It is also acceptably common for an employee to make attempts to improve their situation before resorting to resignation. However, while remaining at a job under intolerable conditions may not automatically negate a constructive termination claim, the longer an employee stays, the more difficult it may be to prove that the conditions were in fact intolerable.

Do I Have a Wrongful Termination Claim if I Was Forced to Quit?

In order to claim wrongful constructive termination, the employee must prove that the termination was in fact wrongful. There are many types of wrongful dismissal that include being terminated for:

  • Breach of contract
  • Public policy violations
  • Retaliation for whistleblowing
  • Retaliation for filing a complaint
  • Retaliation for filing a workers compensation claim
  • Requesting medical accommodations

These things constitute a wrongful termination. Because California is an at-will employment state, other forms of constructive termination may not be considered wrongful. Beyond these exceptions, employers have the right to fire any employee for any reason, and employees have the right to quit for any reason. Bad shifts, shortened hours, low pay, and a toxic environment are not enough on their own without an underlying cause that constitutes wrongful termination under California law.

 

Proving Constructive Dismissal

An employee can not just decide to quit and then claim constructive termination. The California courts have a system for determining if a resignation was actually a termination. There are several factors that the employee must prove:

  • That there were intolerable working conditions at the time of resignation
  • That the conditions were so intolerable that the employee had no choice but to quit
  • That any other reasonable person would have had no choice but to quit in those conditions
  • That the employer was aware of the conditions and was either directly responsible for creating them or knowingly allowed them to be created

All of these factors must be proven for a valid constructive termination claim. An isolated or trivial incident, a situation that the employer was not aware of, or a situation that was remedied before the employee resigned do not qualify as constructive termination. The working conditions must also have been truly bad enough that the employee was forced to resign rather than conditions that were not ideal and prompted a decision to quit.

 

Constructive Dismissal Statute of Limitations

There is a set period of time that a person has to file a lawsuit after an incident occurs. This is known as the statute of limitations. When it comes to constructive termination cases, the statute of limitations depends on the specific nature of the case, though in all cases the start date is the date of resignation.

  • In order to claim constructive termination as violation of an implied oral contract, the statute of limitations is two years.
  • In order to claim constructive termination as violation of public policy such as discrimination or harassment due to age, race, religion, gender, sexual orientation, pregnancy, or disability, the statute of limitations is two years.
  • In order to claim constructive termination as retaliation for whistleblowing, the statute of limitations is three years.
  • In order to claim constructive termination as a violation of the Fair Employment and Housing Act, the statute of limitations is three years to file with the Department of Fair Employment and Housing.

 

Contact Mesriani Law Group if You Have Been Constructively Discharged

If your employer is creating an intolerable work environment in an effort to force you to quit, the best thing you can do is seek legal advice. An employment lawyer can assess your situation, explain your legal rights, and help you make the necessary steps forward. If you have been forced to quit due to intolerable working conditions, an attorney can determine if you have a wrongful constructive termination case, and if so, help you get started filing a claim. If your employer has forced you to resign or is attempting to force you to resign, call Mesriani Law Group today for a free consultation.

 

Constructive Discharge FAQs

Why is constructive discharge important?

If an employer decides to fire an employee because of discriminatory or retaliatory reasons, then that employee can sue them for wrongful termination. The employee may also be eligible for unemployment benefits. However, if the employee quits, then they waive their right to sue and may lose eligibility for unemployment. Many employers with malicious intentions will use this to their advantage and deliberately create a hostile environment for the employee they want to get rid of in an effort to force them to quit. The idea of constructive termination is to protect employees in these situations. If they can prove constructive dismissal, then the resignation can be legally viewed as a termination instead.

What do you have to prove to claim constructive discharge?

When claiming constructive dismissal, an employee must prove three main factors:
• That the employer was deliberately trying to force them to quit as a form of discrimination, retaliation, or any other grounds for wrongful termination
• That the employer intentionally created or willfully allowed others to create a hostile or toxic work environment that was intolerable
• That the intolerable working conditions were severe enough that the employee had no other options but to resign
All three elements must be present in order for a resignation to be considered a constructive termination.

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