What Is Constructive Discharge? (Definition, Rights and FAQs)

By Indeed Editorial Team

Updated November 2, 2022

Published October 9, 2020

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Most employees prefer to work for organizations that can provide a safe, positive, accommodating and fair work environment. When these needs aren't met, an employee may feel forced to resign or "constructively discharge" themselves from the situation.

In this article, we discuss what constructive discharge is, how it works and common reasons for dismissal with examples. We also answer FAQs about constructive discharge in the workplace.

Key takeaways:

  • A constructive discharge can be filed by an employee who feels forced to resign because work conditions have been intolerable. 

  • Intolerable work conditions might include discrimination or harassment, mistreatment, or receiving a cut in pay or job duties for reasons that aren't work-related.

  • An employer can purposefully make work conditions intolerable to force the employee to resign.

  • The employee must prove the conditions in an Equal Employment Opportunity Commission claim or lawsuit.

What is constructive discharge?

Constructive discharge—also called "constructive termination," "quitting with cause" or "constructive dismissal"—is when an employee decides to resign from their job due to an adverse work experience. Whether it's one negative incident or a pattern of behaviors and/or actions, the employee feels forced to leave because they can no longer work in what they see as an intolerable work environment.

Constructive discharge is a legal term that differs from other types of employee separations, such as a typical resignation, firing or layoff. While it is still considered a forced or involuntary resignation, constructive discharge relies entirely upon the presence of a hostile or uncomfortable work environment, making resignation necessary or as an "action of last resort."

Hostile work conditions might include discrimination or harassment, mistreatment, or receiving a cut in pay or job duties for reasons that aren't work-related. In most cases, the environment must violate federal laws prohibiting sexual harassment or discrimination based on age, national origin, pregnancy, race, religion, sex/gender and disability.

In a typical voluntary separation, or resignation, the employee is not eligible for unemployment benefits. However, constructive dismissal, if proven, becomes wrongful termination, a form of involuntary termination, and eligible for these benefits. 

Read more: What Is Wrongful Termination?

How does constructive discharge work?

When you feel you are in an uncomfortable or unfair work environment due to potentially negative working conditions, you can cite "constructive discharge" and resign from your position. 

As the employee, you are responsible for initiating a constructive discharge and providing evidence it occurred. The typical sequence of events is as follows:

  • An employee feels they are in a hostile work environment.

  • They consult an attorney to confirm they can prove constructive discharge.

  • They research state deadlines and guidelines per Department of Labor guidelines on submitting a claim.

  • They formally resign and communicate a "constructive discharge" to their employer.

  • They submit a claim to the Equal Employment Opportunity Commission (EEOC).

  • The EEOC reviews the claim and makes a determination.

  • If the claim is confirmed as grounds for "constructive discharge," the former employee can receive unemployment benefits associated with wrongful termination.

  • If the former employee has retained a lawyer, they may be able to recover lost wages, severance packages, benefits, legal fees, etc.

Related: Guide to Unemployment Benefits

Requirements for constructive discharge

The EEOC offers guidelines to know if your situation is a "constructive discharge" situation. According to the federal agency, constructive discharge is when:

  • An unbiased individual would also feel the situation is hostile.

  • Discriminatory actions caused a negative work environment.

  • An intolerable work condition was the direct cause of an employee's involuntary resignation. In most locations and situations, the employee has the burden of proof if the dismissal turns into a legal case. They have to show the employer either knew about the hostile work environment and failed to provide a solution or was directly responsible for the intolerable working conditions the employee experienced.

Read more: How Does Constructive Discharge Work?

Common reasons for constructive discharge

Within the parameters of the EEOC's requirements, there are several reasons why you might be eligible for a constructive discharge or dismissal, including:

Discrimination

If you experience discrimination—often based on race, gender, age, national origin, pregnancy status, religion and disability—you may feel forced to leave your position. For example, you did not get an expected promotion because you recently announced your pregnancy.

Job demotion

You could claim constructive discharge if you go through a job demotion for a reason other than your performance. For example, a manager may demote you if they get along more with another employee or if they don't agree with something you did outside of work on your personal time.

Retaliation

Retaliation is when an employer—typically someone in leadership like a manager or supervisor—takes action against you for performing a protected activity, such as giving feedback on a survey about the leadership team. Retaliation can take many forms, ranging from making it difficult for you to get promoted to showing disrespect for you during interactions. For example, an employer might suddenly exclude you from team meetings or promote another person instead of you.

Management disregard

Management disregard refers to management's lack of action when you have filed a complaint about an incident. They don't take action to address the situation or make the workplace a positive space. For example, you formally approach your supervisor with a concern about a coworker's inappropriate behavior, but management takes no action to find a solution.

Pay decrease

An employer may change the employee's pay rate due to business needs. However, if the employer has an unfair reason for doing so, it could create the type of work environment where you no longer feel comfortable.

For example, you may have differing opinions on the department's goals for the next quarter and communicate this at a meeting. The employer doesn't appreciate this and reduces your pay as punishment.

Lack of disability accommodations

You may have a disability and require certain accommodations to perform your job well and comfortably. If you don't receive accommodations from your employer, you may experience a hostile work environment and feel forced to resign.

For example, as an employee who uses a wheelchair, you may request better mobility access and be denied or punished for the request. Keep in mind that state laws vary, so it's a best practice to check the laws where you live or speak to a licensed expert who can help guide you.

Read more: How To File a Complaint With Your Human Resources Department 

Proving constructive discharge

When it comes to constructive discharge, you may feel overwhelmed and find it challenging to prove your employer willfully created a hostile work environment or helped contribute to one by failing to address a particular situation.

It is, therefore, vital you acquire and gather evidence, such as employer email communication, etc., to make your case. You will likely have to show that your work environment was so intolerable that any reasonable individual would have resigned, given the circumstances.

Depending on the industry and state laws, you may only have a certain amount of time to file a constructive discharge claim before the statute of limitations is in effect. The Department of Labor in each state can help you understand more about your rights and responsibilities as they relate to constructive discharge.

Read more: How To Identify and Deal With a Hostile Work Environment

FAQs about constructive discharge

You likely have questions about constructive discharge rights and processes. The best course of action is to consult the EEOC and a lawyer to determine if you have grounds for constructive discharge and what steps to take. Here are a few of the most frequently asked questions:

What doesn't count as constructive discharge?

These situations would not generally count as a constructive discharge:

  • You aren't considered for a job promotion because of your performance.

  • You are demoted or fired due to poor performance.

  • You aren't given a raise because of a salary restructuring throughout the organization.

  • You resign because you disagree with a manager's new direction for the department.

  • A manager asks you to take on more work for the day to cover an absent employee.

  • A manager implements rotating on-call shifts across a department.

  • You aren't allowed to lead a project because you are on disciplinary action.

  • You are placed in a comparable position to your last one when you return from being on leave through the Family Medical Leave Act (FMLA).

  • You don't like changing the office floor plan from a cubicle setting to an open environment.

  • A manager asks you to work overtime to meet a project deadline.

Can I resign and claim constructive discharge?

Absolutely. However, educating yourself is the best next step if you feel you are in a hostile work environment. Contact the EEOC and possibly a lawyer to learn if your situation qualifies for constructive dismissal and how to prove it.

How long do I have to file a claim?

If you are considering filing a constructive discharge, consider your state's statute of limitations for bringing a claim. The window to file a claim varies by jurisdiction, state and nature of your work. For example, federal employees in the United States have 45 days to make a claim. For private industry, employees have 180 to 300 days from the day they resign, depending on the state where the claim is filed.

Can I sue for constructive discharge?

You can sue for constructive discharge. The best course of action is to contact the EEOC and an attorney to see if your case is viable and whether you might be entitled to compensation related to your constructive discharge.

What remedies may be ordered?

If the constructive discharge claim is settled in your favor in association with wrongful termination and employment discrimination, you may be eligible for the following remedies:

  • Back pay: This compensates you for loss of earnings from the time you resigned to the time of the trial.

  • Front pay: This compensates you for your future loss of earnings from the time of trials. This is available if you can't find employment or your new job pays less than your previous one.

  • Lost benefits: This compensates you for any benefits, such as insurance, pension or 401(k), lost due to your resignation.

  • Out-of-pocket losses: This compensates you for other costs due to your resignation. This may include costs incurred searching for work or medical bills associated with harassment or assault in the workplace.

  • Pain and suffering: This compensates you for emotional suffering, discomfort and reduced quality of life due to your resignation.

  • Injunctive relief: This court order can force the employer to rehire you in your previous position at the same pay and benefits. 

  • Attorney's fees and costs: This compensates you with reimbursement for legal expenses associated with the case.

  • Punitive damages: This compensates you when the employer has committed particularly severe conduct. The purpose is to punish the employer for their behavior.

Remember that compensation for out-of-pocket expenses, pain and suffering, and punitive is capped by federal law. The limit is based on the employer's size.

Related: 20 Ways To Improve Your Work Environment  

This article is for information purposes only and is not intended to constitute legal advice. Consult with an attorney or lawyer for any legal issues you may be experiencing.

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