When A Quit Turns Into A Constructive Discharge

(Published November 15, 2008)

 

Reprinted from MANAGER'S LEGAL BULLETIN, a widely read employment law newsletter that communicates legal guidelines to managers through scenarios based on real-life cases. Click here to view a sample issue, get more information, or sign up for a risk-free subscription.

 

An employee who constantly complains quits.  Good riddance, right?  Not if the employee feels his working conditions were so intolerable that quitting was his only option.  Then you might find yourself fending off another complaint — of constructive discharge — in court.

A Case Of He Said, You Said

"Ryan, do you have a minute?" Collin Finkel asked his manager, Ryan Bixby.

"Sure, Collin," Bixby replied, motioning for him to have a seat.  "Is everything all right?"

"Not really," Finkel commented.  "I accepted the job here with the understanding that I would be working 40 hours per week.  But in the few weeks since I started, I’ve been required to put in much longer hours."

"During your interview, I estimated that you’d be working 40 hours a week.  Naturally, some weeks are busier than others," Bixby clarified.  Are the longer hours a problem?"
"The longer hours aren’t a problem," Finkel responded, "but what is a problem is that I don’t get paid for the extra time."

"You were hired as a salaried, exempt employee," Bixby reminded him.  "I thought I made it clear that you are not entitled to overtime pay."

A Case Of Put Up And Shut Up

 Over the next two years, Finkel continued to work in excess of 40 hours per week without overtime pay.  He also continued to complain to Bixby about the number of hours he was required to work.  

"Collin, I understand your frustration," Bixby sympathized, "but your constant complaining and negativity is taking a toll on your performance."
 
"My performance is suffering because I’m required to work long hours without compensation," Finkel remarked sarcastically.

"Your performance has deteriorated because you refuse to complete required reports and assignments," Bixby corrected.  "You have a bad attitude."

"Do you blame me?"Finkel questioned.  "I’ve been complaining about the lack of overtime for more than two years, and nobody has done anything about it."

"What do you expect me to do?" the manager asked.  "You’re an exempt employee."

"Well, I spoke with an investigator from the Department of Labor and he said that since I perform mostly mechanical work, I should be classified as non-exempt," Finkel informed the manager.  "He said that I’m entitled to overtime."

Bixby had heard enough.  "You have a choice.  You can improve your attitude and live with the overtime work, you can quit, or you can continue with your bad attitude and be fired.  But I don’t want to hear it anymore."

A Case Of Constructive Discharge

 
Three days later, Finkel quit and filed a complaint under the Fair Labor Standards Act (FLSA) with the Department of Labor (DOL).  Following an investigation, the DOL found that Finkel had been incorrectly classified and ordered the company to pay him $3,500 in back overtime pay. 

But Finkel didn’t stop there.  He also filed a lawsuit against the company alleging that he had been constructively discharged in retaliation for asserting his FLSA rights.  Finkel claimed that his resignation was actually a constructive discharge, arguing that Bixby’s ultimatum to improve his attitude, quit, or be terminated effectively prohibited him from asserting his rights under the FLSA.

To prove constructive discharge, an employee must show that a manager/employer created employment conditions that were objectively intolerable to a reasonable person with the intent to cause the employee to quit.  The court found that prohibiting an employee from asserting his FLSA rights would be objectively intolerable to a reasonable person.

The court also ruled that by presenting the option of quitting, it was reasonably foreseeable that Bixby’s ultimatum would result in the end of Finkel’s employment.  Also, the fact that Bixby issued the ultimatum on the heels of learning that Finkel had met with a DOL investigator showed a connection between the protected activity and the adverse action.

"Constructive" criticism:  The biggest mistake that Bixby made was failing to take Finkel’s complaints seriously.  Rather than chalk up the employee’s classification complaints to a bad attitude, Bixby should have investigated the matter or referred the employee to someone who could have reviewed his overtime classification.  And when Bixby finally did respond to Finkel’s overtime complaints, he did so by issuing him an ultimatum, which made the employee feel compelled to quit and invited his constructive discharge claim.