Constructive Discharge

When an employer creates such a “difficult or unpleasant” work environment that an employee feels that he has to resign, the law considers the employee “constructively discharged” or “constructively terminated.”

In the 1970s, employers found that they were unable to fire employees who engaged in union activities protected by the National Labor Relations Act. In order to get around these protections, employers made work so miserable for their employees that they had no other choice but to quit. As an added “benefit” to the employer, when the employees finally did quit, they were left without certain unemployment benefits and without the ability to sue for wrongful termination. The National Labor Relations Board developed the constructive discharge principle in an effort to protect employees from such bad faith acts by employers.

In 1997, the Arizona Legislature codified Arizona’s constructive discharge doctrine in A.R.S. § 23-1502, which establishes a notice system and other legal obstacles employees must overcome before successfully bringing a constructive discharge claim. In Arizona, an employee may bring a constructive discharge claim when the work environment becomes so “difficult or unpleasant” that the employee feels compelled to quit. However, before resigning, the employee must provide the employer with notice describing the employee’s specific complaints, and the employee must allow the employer fifteen calendar days to improve the conditions, if the conditions do need to be improved. If the employee reasonably believes that he or she cannot continue to work for the required fifteen days, then the employee may take a paid or unpaid leave of up to fifteen days, or until the employer responds to the employee’s complaint, whichever occurs first.

A.R.S. § 23-1502 also provides that if an employer fails to make his employees aware of this section of the law, then the employer is deemed to have waived his right to notice. By waiving his right to receive notice, the employer forfeits the opportunity to potentially correct any problems that exist within the workplace before being blindsided with a wrongful termination suit.

If the employer is actively engaged in more outrageous conduct, including, but not limited to sexual assault, threats of violence, or recurring discriminatory harassment, then the employee does not need to give the employer fifteen days’ notice and an opportunity to improve the situation. Rather, the employee can quit immediately and keep intact the ability to establish a claim for constructive discharge.

In an effort to illustrate the constructive discharge doctrine, below are two real examples of situations where courts have allowed employees to establish constructive discharge:

A network engineer’s employer ordered him to violate federal criminal copyright laws. When he refused, the employer cut his pay and demoted him. In addition, the engineer was humiliated, harassed, and tormented to the point where his work became unbearable. The court found that he could claim that he had been constructively discharged.

A payroll clerk refused to follow her employer’s order to make improper tax withholdings. Her employer screamed at her, threatened her job, stopped communicating with her, and stripped her of some of her former responsibilities. The court found that the employer’s actions created a work environment that was so difficult and unpleasant that the payroll clerk could claim that she had been constructively discharged.

All business owners should be aware of Arizona’s constructive discharge laws and be able to recognize when a workplace environment may rise to the level of being “difficult or unpleasant” enough that it constitutes constructive discharge. Additionally, all business owners should make their employees aware of the details of Arizona’s constructive discharge laws, either by posting the notice requirements in a conspicuous location, or by including the notice requirements in the employment handbook or policy manual to avoid unintentionally waiving his or her rights to notice.

Finally, if an employee communicates that he or she feels that the work conditions are difficult or unpleasant, the employer must take the complaint seriously and act immediately. Allowing a significant amount of time to pass without addressing an employee’s complaints could subject an employer to a wrongful termination suit. From an employer’s perspective, when it comes to protecting your business and yourself from a potential constructive discharge situation, it is always better to be safe than sorry. Call our Mesa employment lawyer today.

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