VANNOY:

Avoid wrongful termination lawsuits. What is constructive discharge? My name is Mike Vannoy. I’m the Vice President of Marketing at Asure. And this is a really important topic that we’re gonna unpack today. This, this notion of constructive discharge. It’s a legal term. And, and I think this is what trips people up, because so many employers work in, say, an at-will state, that they think if there’s, you know, whatever reason is justifiable to them. They’re not trying to be inhumane but they can terminate employment. But there are some, some, some legal constraints here. And just because you can terminate someone against their will doesn’t mean that they can’t sue you for any reason they want for wrongful termination. And constructive discharge is one of the most common reasons that people sue for wrongful termination. So to help me unpack this topic today’s guest, if you’ve regular tender of the show, you know, Brian, Brian Shenker.

He is a counsel at of the Long Island New York office of Jackson Lewis pc. Brian’s practice focuses on representing employers in a wide range of workplace matters, as well as preventative advice and counseling. Brian has extensive experience defending class action and collective action lawsuits under federal, state, and wage and hour laws. He has successfully defended wage and hour audits conducted by the US and New York State’s de depart state departments of labor. And Brian regularly handles cases before courts and administrative agencies involving claims of discrimination, sexual harassment and retaliation. Brian, welcome back to the show.

SHENKER:

Thanks, Mike for having me. Yep. Yeah. A very interesting, you know, doctrine that we have to discuss today, constructive discharge, something that, you know, many employers may simply be, you know, unaware of. So I think unpacking this today will be certainly interesting.

VANNOY:

So, so let’s just start out with kinda like a, a, a definition, I think, legal and practical. What is constructive discharge? I think this is a term a lot of employers haven’t heard of, right?

SHENKER:

So, yeah. So, you know, the Supreme Court has defined this doctrine as you know, an employee’s reasonable decision to resign because of unendurable, you know, working conditions so that it’s equated with a formal discharge by the employer. So, essentially, it’s a claim that when the employee quits, that the law will treat that as an actual termination by the employer. So at its most basic level, you know, the inquiry that we’re looking at is, you know, did the employer create work conditions that were so intolerable that a reasonable position in that employee’s shoes would’ve felt compelled to resign? Yeah. you know, so as you mentioned, you know, this comes into play, you know, in the discrimination hostile work environment, retaliation context both, you know, at the federal state and even the local law this doctrine is, is typically recognized.

VANNOY:

And so, so Brian, from a, from a legal perspective, this, this is not like it’s there’s not a line from Title seven. There’s not, there’s not a law that spells this out. This is the, the, the, that say, department of Labor enforce, say, like wage and hour, you know, over time, minimum wage, things like that. But th this is a legal thing that the courts will defend when it comes time to wrongful termination. So the way this, the way this plays out is lawsuits, right?

SHENKER:

Exactly. Exactly. So, right. This isn’t actually, you know, in most statutes, it’s not actually on the books. You know, the history comes from actually the the union context. So this cause of action, the constructive discharge claim was first recognized in the 1930s by the National Labor Relations board. And they, they interpret the N L R A, the National Labor Relations Act. So back in 1938, right? Among other things that were prohibited under the N L R A, you can’t fire an employee because they, jo joined it, joined the union. So after, you know, the N L R B passed that, you know, had that law in the books, employers, you know, smartened up and, and N l Rrb realized that the unlawful firings they sought to stop were being just as e easily achieved by employers who made conditions of employment so bad that many of these workers were forced to quit.

 So the employer could claim to the na to the nlrb, Hey, you know, they, they voluntarily resigned. You know, but at the same time, the employer was doing everything in its power to force that resignation. So, right. You know, they were following the letter of the law, but certainly, you know, not the spirit. So then in, in this 1938 case, the NL RRB held that an employee ran afoul of the act when it fired you know, not only when it fired an employee, but when it purposely made conditions so bad that the employee had no meaning for choice and that even if they quit in such circumstances, they would still have grounds for a wrongful termination claim. You know, just as you know, someone who was actually, you know, terminated. So, you know, within decades of that decision you know, courts picked up on it, both federal and state courts and now it’s a recognized doctrine, you know, all throughout the country that an employee can, can resign and still a claim.

VANNOY:

Ok.

SHENKER:

So, so, you know, we look at it as, you know, the exception to the rule, but, you know, certainly you know, it’s, it’s well established at this point.

VANNOY:

So most people watching today’s show or listening after the fact probably think, well, I don’t, I don’t, I’m, I’m not a jerk. I don’t I have employees that maybe I don’t like, and maybe they’re not productive, or I don’t need them anymore, and so I need to let them go. But I’m not, I’m not a jerk that just creates in quote unquote intolerable situations can let, let’s get into the details. What I, I do, I under understand it, right, that there’s a three part test to de that the courts will look at to, to determine whether this does qualify as constructive discharge,

SHENKER:

Right? Right. So, in general, you know, there, there are three parts to this, and you know that number one, you know, working conditions must be such that, you know, a reasonable person in this employee’s position would find them to be intolerable. And the intolerable working conditions must be a result of conduct that relates to the, you know, underlying discrimination claim or retaliation claim. And then obviously the involuntary resignation, you know, this result specifically from those intolerable work conditions. So, you know, it might even help to put this in context to back up a step. Yeah. Right. To understand, you know, how constructive discharge works. Let’s look at, you know, what a discrimination claim requires in the first place, right? So, you know, typically, you know, the burden, you know, is on the employee to establish a prima facie claim of dis claim of discrimination, which includes one that they belong to a protected class, right?

This is, you know, race, sex, religion, disability. Two, that the individuals qualified for the position, and then three, that they suffered an adverse employment action. And then finally, that adverse employment action occurred under circumstances giving rise you know, to an inference of discrimination. So, looking at that, you know, the constructive discharge doctrine is essentially another way to satisfy the adverse employment action that, you know, the conditions are so bad that, you know, again, we’re saying instead of needing a termination, I can just point to these bad conditions that force me to, you know, quit as being that adverse, you know, action. But you know, again, as we’ll go through, and I’ll, I’ll use some examples. You know, this often requires more than just regular discrimination, more than just, you know, ordinary, hostile work environment. You know, to some extent we talk about it as, you know, hostile work environment plus, right? So there’s the hostile work environment that might give rise to the employee’s actual underlying claim, but to get to the level of a constructive discharge, there’s gotta be something else. What, you know, what’s that egregious conduct that push this over the edge you know, into a you know, to force this person to quit. So,

VANNOY:

You know, there, so, so let, let’s talk about that, cuz like, you can’t say, Hey, these are intolerably hot conditions. I can’t take the heat. Well, it’s, it’s a, it’s a roofer in Florida, right? I mean, it, it it’s hot that the job is, and it’s not different than anybody else doing the job. So maybe, maybe give us some examples, or what’s the clarification of intolerable? Cause I assume it has to do with intolerable that is unique to that person in a different standard for everybody else,

SHENKER:

Right? Right. No, exactly. And look, there, there are probably two main broad categories of scenarios. This, this comes up in when we’re talking about the, the employer’s conduct. You know, one is where, you know, the employer makes it clear that essentially no matter what the employee does, they’re going to be terminated, right? So that you, you’ve just left them with a posi, you know, in a position where, you know, for instance, they’re placed on a performance improvement plan and told that when, you know, the, the 60 day time limit on that runs out, that the company will terminate them no matter what. Right? Now, obviously, we’re talking about there’s a background of some discrimination or hostile work environment there, but if that employee resigns before the end of that 60 day period, right? That could potentially be a constructive discharge because they were left with a ch little choice, right?

You’re, you’re either gonna quit or be fired, which you know, isn’t a real choice at all. You know, the other scenarios where this comes into play are where, you know, the employer’s conduct really becomes so intolerable that it pushes the employee to make that make that decision. So, you know, to give you an example, this actually comes, you know, just right from the E E O C you know, that for instance, you have an employee who is black and they’re employed as an assembly line worker and required to work closely with others on that assembly line. That employee is subject to repeated harassment from other white employees on that assembly line, such as, you know, racial jokes, racial slurs, you know, even going so far to, you know, tamper machinery that, that this employee works with to interfere with his job performance.

 You know, that employee then complains to the company or to his supervisors, but, you know, no action is taken and the comments continue. You know, look, oftentimes we’ve seen this before, you know, a manager or supervisor might think it’s funny, you know, that it’s just everyone’s having good fun, but you know, this individual has complained. It clearly isn’t. And then that individual then, because he’s now complained, it hasn’t stopped, it’s continuing, he now resigns and files a charge of discrimination. So, you know, that employee is going to contend that he was subjected to this racial harassment and that his resignation was in response to that. And that the thing that took this beyond just the regular discrimination was that even after he complained the company and the company had noticed that something was going on, they allowed it to continue. So, you know, that’s one example, you know, where, where we could see, you know, a constructive discharge claim.

And, you know, the E E O C identifies a number of relevant factors that it will look for in cons in, in determining you know, whether this rises to the level of a constructive discharge. You know, so first of all, first off, they’re gonna look at, you know, what the employee gave as the reason for resigning cause, right? Obviously the resignation has to be because of this conduct. Two, obviously they’re looking at the actual discriminatory employment practices that, that are alleged. But a very key element is how long the employee was subject to these you know, this conduct. You know, someone who quits after, you know, two days of unwelcome advancements or unwelcome comments that often is not gonna be looked at as being severe enough in terms of the amount of time the employee had to, you know, suffer through this to lead to a termination.

So, you know, one big question is how long, and then the timing many courts have found that, you know, if there’s anything that in the employment that actually improves right before the employee’s resignation, that that can defeat a constructive discharge claim because that would indicate that things weren’t so bad. So it’s a very, you know, very fact intensive inquiry. And a, again, one of the biggest things, and we’ll get to this later on, is that, you know, one of the typical requirements in a constructive discharge claim is that the company knew about it. That the, you know, employee made a complaint. That the company had this opportunity to understand, you know, what conduct was being alleged. And, you know, then we’re either gonna see that the company did nothing and it just continued. Or, you know, the company maybe did something, but then, you know, engaged in retaliation. You know, those are the types of things that will, you know, inaction or inappropriate action, you know, can lead to these types of constructive discharge.

VANNOY:

Brian, I gotta think about what, how to even ask this. So, so like, I, I assume people watching and listening to this that they don’t see themselves as a racist. And there’s, and the, these cases are probably not blatant, you know, racial epitaphs being thrown around, right? But it, it to, to follow up on, on the use case that you gave pretty common in some job environments that there’s like some rookie hazing, right? That that happens. And what, what, what about what, how, what about situations where the employer thinks this is just in good fun? And maybe some of the comments were not super blatant that everyone would obviously agree? No, that’s not acceptable, but there’re more nuanced cultural references that the, the, your, your use case, the, the black man deeply offended by them, right? And, and probably rightly so. But the offense isn’t intended. It’s meant to be all good fun. Shucks, let, let’s pick on the new guy. Help, help employers to understand where they must lie on, on, on, on this continuum of, of cause we’re, cause we’re, by definition, I think, gray area legally, what gi give some guidance for employers in that situation.

SHENKER:

Yeah. And, and look, I think it’s, you know, there’s a spectrum, right? You know, there might be some, you know, level of you know, I, I don’t wanna say hazing cuz I don’t think there’s any level of hazing, you know, that’s appropriate, but of you know, friendly, you know, behavior in the workplace. And, but yeah, I think, you know, we, we always go back to having the right policies in place. But you know, a lot of it’s about setting, you know, the right tone for, for your company, having the right company culture you know, another you know, recent matter, you know, involved you know, a a retailer, you know, that, that we would all know you know, in the fast food industry. And you know, there, you know, it is similar to what you’re saying, you know, the, there was a, a toxic workplace environment.

The E O C found, right? With, you know, the male service managers and, you know, fe you know, harassing, you know, female crew members at a, at a particular location. And there, you know, the, the E O C looked back and said, yeah, there’s, you know, we have a history of this, right? Where, you know, there’s a history of some unwelcome sexual comments you know, things like that where again, you know, these are young people in their twenties that, you know, the company might have just thought, you know, this is normal behavior. And, you know, we’re, we’re allowing it that, you know, young people can talk to each other. But, you know, what did happen is an employee complained and the general manager then failed to investigate and instead turned the investigation around and, and thought that it was more about, you know, this, you know, female who complained having a consensual relationship with a manager.

And so that’s how the company looked at it. And so, you know, this harassment, this, you know whole environment continued. And then, you know, a year later, again, you know, more comments, you know, calling someone, you know, mama sweetheart, you know, baby girl you know, things like that where, you know, more comments were made, another complaint was made by two individuals and nothing was done. And so those people then you know, quit, especially after, you know, there was some, you know, we’ll say, not quite retaliation, but the individual who was alleged to have harassed found out about the complaints, starts making comments to the people who complained. And, you know, that the E E O C found was sufficient for a constructive discharge. So, you know, that’s one where, you know, the conduct isn’t necessarily, you know, as egregious as, you know, many examples we could come up with, but the fact the company knew it was going on and then when there was a complaint, did nothing to protect these individuals from, you know, the wrath of the, you know, the manager they complained against. You know, those are the types of things where, you know, it, it, you know, looking at that, it, it is just, you know, the company did something, but they didn’t really do best practices for, you know, what you do with respect to

VANNOY:

I, I know I’m jumping ahead to kind of the punchline and the ending here for what employers should do, but I, I, I feel like we shouldn’t go any further without just saying your, it is your legal responsibility as an employer to provide a safe work environment, and it is your ethical and best practice legal advice here. They have to take all these things serious. So even if you think as the employer, oh, there’s nothing egregious going on here, re regardless if it’s race, gender, whatever, whatever the topic is, you have to investigate, right? And, and, and you, and you can’t show priority to the people who were already in the job, right? So it could turn out to be that it was good, healthy joking, it could turn out to be m more. And if you can’t demonstrate that, you put a, put a full throat effort into figuring it out, trying to remedy it, putting, putting solutions in place, whether that’s disciplining other employees, terminating other employees coaching you, you have to be able to document what you did in response, just from a legalistic perspective of the employer, right?

SHENKER:

Yeah, absolutely. Right. As we’ll get to in a bit, like you, you mentioned, right? I, I think a, a large part of this is how does a a company respond to complaints? Because that’s typically when we’re running into, you know, constructive discharge type issues, when you know, the, the, like we said earlier, there are two parts, right? The conduct needs to be intolerable, and the company, you know, should be aware of it, right? Because the company is either aware of it or they’re intentionally doing. And here the law will essentially treat those two things as the same, right? The company intentionally forcing the employee out, or the company sitting back and watching a supervisor make conditions so bad that, that they quit, you know, are, are gonna be looked at, you know, in the same way. So yeah, a lot of this is, you know, what do we do when we get a complaint?

We document it, we investigate and, you know, one part that shouldn’t be forgotten about is, you know, how we protect the person who made a complaint. Right. You know, most of the time, you know, we may tell workers that, you know, if you make a complaint, we’ll keep it confidential to the extent possible. But, you know, we cannot promise, you know, full confidentiality. And so often, you know, the person who’s subject to the complaint, they obviously find out about it because, you know, they’re, they’re part of the investigation. And it’s important to make sure that that person or others who are friendly with, with the accused are not then taking action against the accuser. Because again, you know, the company can be held, you know, to have acted, even if it’s just aware of, you know, what may be going on. So we wanna, you know, foster a culture of bringing, raising complaints and foster a culture of, you know, no retaliation.

VANNOY:

What’s going through my mind, Brian, is, you

SHENKER:

Know, that’s not the,

VANNOY:

Yeah, I, I, so I want, I want you to help clarify the intolerable conditions that the company creates versus employees. Is there even a difference? It’s, I think, cuz I think the punchline is gonna be, it’s one of the same, but I keep coming back to, nobody on this call probably sees themselves as creating a taxist racist culture. They probably don’t see themselves as creating a sexist culture with a bunch of cat calling. Those are the obvious things. Okay? How does this apply to me? But I mean, I firsthand have witnessed, I’d say, good businesses and good business owners. I know a construction company where there may not be intimidation and hazing of, of the new guy on the job site, but they sure aren’t helpful. And it can be pretty toxic. You can, you can cut the air with a knife because they’re gonna make the new guy prove that he can handle the job. And is he tough enough to be here? I’ve seen a hair salon that the, the, the, the, the new front desk person got a really pretty, pretty, dare I say, rough treatment of almost no treatment, clearly crossed arms. You’re gonna have to prove it to me to, to see if you’re good enough to work here. How, how I think that’s actually quite common, and probably a lot of employers can relate to that. How, where, where does that sit in this continuum of, you know, an intolerable workplace?

SHENKER:

Yeah. So you, you make a great point. And so I think number one, to, to be clear for a constructive discharge, you know, we’re talking about, you know, not just a general unpleasant workplace. Although I, I think in the, all the, you know, instances you mentioned, I think those are, are part of a culture that can be problematic. And, you know, even if not related to a discrimination or a constructed discharge claim, you know, those probably are problems and eventually could, you know, seep into an area like this. Because when you have conditions like that where, you know, people, there are cliques or, you know, there are, you know, people being difficult on others for really, you know, no reason, you know, then again, if we have the basis of some hostile work environment claim and then, you know, so that that same guy who’s coming to the construction site and he is new and he, you know, they’re, they’re giving you a tough time.

Well, you know, maybe he happens also to be gay. And now there are people both making, you know, sexual orientation comments towards him and, you know, they, they might think those are just, you know, regular jokes and, you know, maybe the tough time they’re giving him has nothing to do with that. But it has everything to do with him just being the new guy. But now that’s all tied together, right? And so from some, you know, from that employee’s perspective, you know, this might be developing a, a work environment and that becomes intolerable. Now again, most courts are going to find that it has to go on for some time and be quite serious. But yeah, I mean, look, minimally, the, we could be talking about hostile work environments that that might not raise to the level of, you know, the you know, unpleasant conditions that that lead to, you know, you know, the constructive discharge.

But, you know, I think there’s a whole nother line of of cases where companies kind of, you know, put employees in a in a, a position. And, you know, this can be something where your managers are saying things, getting the company in trouble, where these are the, you know, inevitable termination cases where you know, basically an employee resigns, you know, in the face of an impending, you know, inevitable, you know firing. So for example, you know, we have you know, a court found that you know, you know, multiple threats are typically included in, you know, needed for this. But that you know, where a company presented an employee with a resignation letter and told them to sign it, and that if you don’t sign this, you know, we’re gonna fire you and your career is ruined, <laugh>, well, you know, that’s likely going to lead to, you know a constructive discharge claim cuz you’re, you’re not leaving them with, with many options there.

 So again, you know, in, in this area is sometimes, you know, it’s, you know, the employer. And look, I can see areas where, you know, and I’ve seen these situations, right? Someone complains about discrimination or hostile work environment, an investigation is done, and then, you know, HR or someone else is talking to the employee and we’re asking, look, you know, we’ve identified, you know, some issues that you’ve had, but there’re also some performance or behavioral issues, you know, you know, and you start talking about maybe whe whether they’re cut out for this, and maybe it’s best if we just, you know, go our separate ways. And you have to be careful because if there are comments, you know, made to this individual that, you know, look, you know, we’re probably getting rid of you at the end of, you know, this investigation or, you know, something like that, you know, they might be left in a situation where they think, you know, they have to resign because a termination is in the books.

 You know, the courts might not always rule that way. But you know, since, you know, an employee isn’t always right to assume the worst. But I think whenever we’re talking to an employee about termination or improving conduct, you know, it’s important to make sure, you know, managers don’t say things that are going to be taken as, you know, you’re getting fired. You know, where yeah, you know, we’re, you know, you know, so for instance, you know, there, you know, there’s some cases I can, you know, in, in one case, you know, an employees, supervisors, you know, yelled at her in insulting terms during coaching sessions, right? So those are coaching sessions designed to improve performance. Instead, they’re, you know, by co in the coaching sessions, they’re degrading her. Yep. And, and they make comments, you know, her supervisor are making comments, do you think you’re gonna outlive us?

You know, there’s no hope for you. You know, there’s no chance you’re gonna be here. You know, they told her, you know, she was too expensive as an employee and, you know, in, in reality, the facts showed that this was actually a, a good worker. And so, you know, in, in that situation, you know, a reasonable person in that employee’s shoes could infer from that situation and this onslaught of criticism and attack that, Hey, you know, I’m not going to be here, you know, at the end of this, I, you know, I need to, you know resign. And so,

VANNOY:

And I, I’ve seen sometimes I’ve seen cases, like in, I’ve seen cases like in sales, where sales manager puts the rep on a, on a performance improvement plan, a pip because they’re not, you know, hitting their sales quotas. But then at the same time, you know, I’m re restrict say, their territory or the products that they can sell or remove their discounting authority because you know, they’re not good enough to handle it, and we need to make sure we’re gonna give the good leads to people who can close it. Meanwhile, creating an, an unequal playing field for the rep that you’re supposedly trying to improve. But my, my question for you, and, and that sounds like an obvious thing you pr probably shouldn’t do. My question for you is if, and, and I’m trying to be as humane about this as possible, but thinking as an employer, you’d be better off if you’re an at-will state, just terminating the person saying, Hey you’re not meeting your quota. This isn’t working out. We need the, the, the, the revenue that comes from your sales pays everybody else’s salary here. We’re gonna have to let you go. You’d be better off doing that than you would putting someone on a PIP and then holding back their ability to succeed, right?

SHENKER:

Yeah, exactly. And, you know, that’s where, where the skills, because, you know, typically the constructive discharge doctrine assumes that the company wants this employee out. And instead of firing them based on either legitimate or non-legitimate reasons, they just make, you know, employment so bad so that the employee quits. And then, you know, the company can say, Hey, look, you know, we never fired this person. So yeah, I, I think absolutely, you know, this goes back to, you know, how do we discipline people, you know, what’s the proper way to discipline, what’s the proper way to terminate you know, building that record? You know, even if you have someone who has complained about, you know, a hostile work environment or discrimination, you know, they should still be performing as expected. So, you know, there are two parts to that, you know, if, if there’s ever a complaint like that, you investigate it and you document that investigation, but at the same time, you know, that employee still needs to perform.

So if you have, you know, employment, you know, performance related issues, you can still, you know, counsel someone on that if they’ve made a complaint. You know, you don’t just need to start pushing them out and hope it all just ends well, is, you know what, sometimes I think employers are thinking that, you know, if we can just get this person out, you know, things, things will be okay. You know, and, and it doesn’t necessarily work that way. But I, I think one way that, you know, companies can really help avoid these types of claims, both, you know, factually and legally, is, you know, to have a mechanism for employees to, you know, complain and get help, right? So courts often find that the availability of a grievance or complaint procedure, you know, will, you know, avoid this type of claim. Because if the employee had an avenue they could go through to seek redress for the, these, you know, so-called un tolerable, you know, conditions but they didn’t take advantage of it prior to their resignation, you know, then the court will typically find that, you know, it, it’s not a constructed discharge.

So I can give you a few examples to illustrate this. Yeah, please. You know, so, you know, one would be, you know, you know, finding that you know, you have in the union context, you know, a union member, you know, could have sought a hearing before being terminated, right? There, there’s often, you know, in, in the union context, a grievance procedure. And if an employee doesn’t go through that grievance procedure, you know, can they really say, you know, Hey, I would’ve been terminated, you know, or, or things were so bad. So typically, you know, they will have to do that. Even hr, you know, complaint procedures, you know for example, you know, in one case you know, the court found that the plaintiff’s demotion didn’t result in a constructive discharge because she was aware this employee was aware of the company’s complaint resolution procedures and made no complaint to HR regarding discrimination or mistreatment.

So, like we said, you know, the, that knowledge, that intention requirement for a constructive discharge, you know, that’s where, you know, a company can really save itself. Where, you know, the majority of constructive discharge cases where the court finds there is one you know, involve companies that had knowledge or, you know, should have had knowledge of the situation and either, you know, didn’t do anything or, or went the wrong way. So, you know, even assuming, you know, everyone who’s listening, you know, none of these companies are going to intentionally do the wrong thing. You know, inaction alone can, can lead to a constructed discharge claim, you know, if there’s a complaint and the company, you know, does nothing. So, you know, that complaint process, having a robust, you know, complaint procedure you know, in the handbook is so important. I know, you know, Mike, I, you know, on various times when we’ve spoken, we’ve discussed, you know, complaint procedures require, you know, having at least, you know, two if not more people someone can complain to, because, you know, what do I do if it says to complain to hr, but HR is the one harassing me, right?

Right. you know, I have, you know, I’m litigating a case right now with, with that very situation where, you know, HR is alleged to be the you know, the, the bad actor and, you know, where was the employee supposed to go to hr? So, you know, complaint procedures that, you know, provide very specific way of going about things are great, but we also wanna make sure there’s some flexibility to those in case, you know, someone involved in that is, is is the actual, you know, bad actor. So companies should really, you know, take that, you know, foster a culture of, you know, complaints. You know, that, that doesn’t mean we just want, you know, frivolous complaints, but employees bring issues to hr, to management is, is good for a company, right? You should know if there are issues, you should know what’s going on. And that provides the company with the opportunity to fix things before they rides to the level of, you know, an actionable claim or, you know, a potential un you know, constructive discharge because of something a a supervisor, you know, is doing unbeknownst to the company.

VANNOY:

Yeah. I mean, it might sound like a broken drum, but I mean, the, the punchline and the answer, the, the solution in almost every topic we discuss in this weekly show is obviously following the law, but it’s, it’s communication, it’s transparency, and it’s good processes. It starts with an employee handbook. Here are policies and procedures, then it’s a job description. Here’s what’s expected of you, and here’s what’s expected of others. Like you, when there’s a problem, here’s how we’re gonna handle that problem. It’s, it’s just, it’s as simple as that. Advocate on the side of the business and the employee create a culture that is pro-employee where they feel listened to and heard, but you also have standards that can be, can be, can be you can hold performance up against. But to do that, you have to have ’em in writing, you have to have job descriptions.

You have to have employee handbooks, you have to have processes for handling grievances, for ha handling all these things. Coaching, termination, promotion, all this thing that these are the best practices of, of, of hr, right? Cuz I, cause I, I just think about one of the problem for, if I’m an employer, especially a small business, I want to know the rules, right? And just like we’re talking about having employee handbooks and job descriptions and whatnot, it sounds so simple, but you’re providing the roadmap and the rules for your employees. Unfortunately, as the employer, we, it’s not quite as clear for us, right? You, you’ve got, you’ve got really clear discrimination, you can’t discriminate based on age, race, gender, sexual orientation, et cetera. That, that there are some things about HR laws that are super black and white, but here’s the case of intolerable workforce.

The by definition, these are, these are gray areas, which means you have to err on the side of the employee, right? If, if, if you’re in front of a judge and you can say, here’s all of my extemporaneous notes. Here’s our policy, here’s our procedures, here’s, here’s the meetings that we have here. Here’s your evidence, here’s your testimony that says, boy, I, this, this looks really bad. We did our best. And let me prove to you why judges are human beings. They’re gonna, unless you’re, unless you’re clearly out of bounds, you’re probably in pretty good shape. You might have some legal fees to defend, but if you don’t have any of that documentation, it is truly your word against that person’s.

SHENKER:

Yeah. Yeah. A absolutely. A and that’s you where, you know, these good HR practices, I mean, not only do they help you combat the underlying discrimination claim, they’ll help you combat, you know, a constructive discharge claim. Because look, the way I look at it as at its, you know, at its base, is that a construct? If there really is a constructive discharge, you know, then that represents, you know, a, a a, a full, you know, failure in, in HR practices that either, you know, you have a, you know, rogue manager, a rogue supervisor that you know, was not reeled in by the company or, you know, the, the, the practice goes, you know, to, you know, the heart of what the company is doing. And, you know, there needs to be, you know, a culture shift. So, you know, these, these are situations where’s,

VANNOY:

Yeah, I have a use, I have a use case question for you. Sorry to cut you off.

And the, I guess I, it kind of goes back to this word intolerable. So what about changes in schedule? You know, if you’re, if you’re a temporary employee working for a retailer back when malls were still a thing, they seem to be disappearing pretty quickly here. You expected your employment was gonna be from, you know, you know, middle of November through December 24th or fifth, and then you, you go away. But i, I just know, you know, having kids growing up and with retail jobs and stuff, they don’t tell you you’re fired. They simply just stop scheduling you, but they keep scheduling their best employees. What talk, talk to me about scheduling and then just simply not scheduling and because I think there’s some, some potential ramifications there.

SHENKER:

Yeah. So I think, you know, I, I, I guess we’d put these under what we would call maybe a, a forced resignation where, you know, e even though they’re, they’re not being terminated, right? They’re, we’re pushing them out through some type of employment change. So I guess, you know, let’s start that, you know, you know, in the United States, in almost every single state, you know, we, we have at-will employment. And so, you know, whether, you know, employees can be terminated for any reason or no reason, just nothing discriminatory and, and, and mean really, the, the law doesn’t even govern being civil, right? You know, we can be horrible employers just nothing, you know, crossing the line into, you know, discrimination on protective categories. So you know, you should follow that, you know, a company can take actions like, for instance, a schedule change that may have the effect of a, a termination you know, wi without any repercussions.

Now, obviously, you know, there’s a caveat to that, that as the company needs to be acting with, you know, legitimate business reasons, so mm-hmm. <Affirmative>, you know, I, I, I can see the situation where, right, we have a scheduling change, you know, across the board that affects, you know, everyone. And okay, you know, that’s something where the company can likely show, you know, this was applied in discriminatory, you know, indiscriminately, it applies to everyone. You know, we simply are changing these times. And look, if it doesn’t work for employee a then and she has to resign, you know, as long as you know, there’s nothing, you know, in terms of you know, the decision to include, you know, employee a in that group that’s discriminatory, you know, these types of, you know, scheduling changes, you know, can be fine. But, you know, at the same time, you know, changes in, you know, scheduling where, you know, we might be effectively laying people off you know, can, can lead to issues, right?

 You know, for example, I, I, I can, you know, give you an example where you know, I, I had this happen in a case where, you know, the company after it had, you know, one of the supervisors was alleged to have you know, harassed, sexually harassed an employee. And after that, you know, the, the supervisor changed that employee’s schedule to a schedule that the supervisor knew the employee couldn’t work because of childcare issues. Yeah. So what happened next? You know, no one else in the company knew that, only the supervisor. And so what happened next, the, the employee was forced to you know, resign because she couldn’t work those new hours. And now that employer is dealing with a constructive discharge claim you know, cuz a lot of it goes to a, again, you know, how is it tied in to that underlying, you know, discrimination, hostile work environment claim.

This, in this case, the plaintiff’s alleging it is you know, tied into that because, you know, the manager did that to get her, you know, as, you know, retaliation based on making a complaint. So yeah, you know, the same change in scheduling or, you know, reduction in hours, you know, if done on a consistent basis across, you know, a group of the workforce, you know, can be legitimate, non-discriminatory. But if done, you know, as part of a campaign against someone, you know, could also, you know, could on the other hand, you know, lead to a constructive discharge claim. So I, I think, you know, whenever a company is looking to, you know, like you said, change in scheduling or, you know, maybe in across the board, you know, reduction in hours or you know, di different types of you know, changes to a to a workforce you know, they should examine, you know, how is this going to impact people?

Are there any people we have existing issues with that, you know, we should make considerations for? But, you know, I mean, look, the general rule is the company can you know, act with legitimate business reasons and change conditions of employment. And if that forces an employee into a, you know you know, I have no choice but to quit scenario because they can’t work under those new terms. You know, that’s not unlawful to be clear that that’s, that’s not unlawful. So, you know, an employer can do that. But again, the caveat being, if it sounds like any of those other situations we were discussing above where, you know, a condition is being changed based on, you know, a complaint or as part of, you know, some other, you know, mistreatment of the employee, that that’s when we really run into problems.

VANNOY:

So Brian, I’m, I’m, I’m assuming I, I’m assuming forced resignations, constructive discharge, these in courts, they probably go hand in glove with retaliation. Is that pretty common?

SHENKER:

Yeah, exactly. O oftentimes they will. Because I, I mean, look, so many times when we have a hostile work environment or a discrimination claim, we have a retaliation claim as well. But, you know, here with constructed discharge, especially because one of the requirements is that the employer knows of the conduct or is, you know, aware of it or is intentionally taking this activity, sometimes the very same action that leads to the constructive discharge claim, you know, will also lead to the retaliation claim as well. So yeah, they, they go hand in hand. And like I said before, you know, same thing with hostile work environment, but again, a constructive discharge is kind of, you know, so to speak, a, a hostile work environment claim on steroids. Right. There’s something else there as well.

VANNOY:

Yeah. Right. We haven’t touched on unemployment insurance here. It’s probably a whole, we could spend another hour on just that topic. I, I, I do think that there are, I know that there are some employers will take pride. I, I hate to even say it that way cause I, cause I know some people are very comfortable putting people in uncomfortable situations. They’ll take pride of, no, I’ll make ’em quit before I fire them because they don’t wanna take the unemployment claim. What, what role do you think that motive plays here in, in coach people? How badly that can backfire on them?

SHENKER:

Yeah, so I guess first I would say I, I understand that aspect because at least you know here in New York, right, they’re, you know, and most places the, you know, the Department of Labor, whoever’s, you know, analy, you know, determining the unemployment claims is looking, you know, is this a term, you know, is this a termination? Which, you know, potentially they can receive benefits or a voluntary resignation, which typically does not entitle ones unemployment benefits. So, yeah, you know, it can be an area where an employer is trying to save on, you know, unemployment charges. Again, you know, in unemployment you know, hearing may be had and they, they will address some of these issues to determine, you know, if it was really, you know, if the employee was forced to resign or not. You know, they’re not gonna go into the same level of detail that a court determining a discrimination claim might, but they are aware of, you know, these issues.

And you know, just because someone quit, if they allege it was because of, you know, unlawful work conditions, they might still be entitled to benefits. But a as you noted, the, the real question is, is it worth it? Most likely not. The, the amount that a company gets charged for, you know, an additional terminated employee on their unemployment insurance is typically very low. Obviously that depends on the state. And, you know, and it depends how many, you know, employees have been terminated within some period of time, time and their wages. But, you know, in the end, potentially opening up the company to a constructive discharge claim over the issue of a con of a unemployment claim, you know, not worth it at all. So if, if that’s the rationale, you know, I would leave, you know, put that aside because it, you know, the, the constructive discharge claim can be, you know, much more disastrous for a company than, than a single unemployment claim.

VANNOY:

I, I want you to speak to that more Brian. So like, there’s obviously a continuum of company behavior from really, really well documented procedures and policies and handbooks and, and job descriptions and escalation processes to, Hey, we’re just a family here and you know, we, we, we don’t take ourselves too seriously and there’s no documentation there’s a continuum of exposure. You leave yourself with those choices you make. But there’s also then the continuum of level of egregiousness, right? Of, of, of the claim. And sometimes a judge might throw this out and say, this is silly that, you know, you’re, you’re, you’re, you’re wrong. This is not a discriminatory situation. This is not a hostile work environment that, you know, suck it up buttercup. And the other end of the continuum, it’s gonna be, oh, employer was clearly in the wrong here. Yeah, at the minimum, even if the, in the right there’s legal cost to defend, and then on the, and the high end, could you kind of just, I don’t wanna scare people unnecessarily, but paint a picture for what cost looks like from a cost to defend best case scenario, to what, what does the court do? Does, do they say you must give the person their job back, and now you’ve gotta deal with all that. Do they say it’s a year’s wages, 10 years wages? What, what, what does that look like?

SHENKER:

Right. So yeah, I think look, the, the, the costs we’re dealing with are going, you know, just broad categories are going to be, if you, you’re hit with a claim discrimination claim, you know, it’s gonna be your own attorney’s fees and then right. What the other side can recover, which will be their own attorney’s fees in under most statutes back wages, which would be, you know, the difference in what they earned after they quit or were fired up to, you know, the time of trial as well as, you know, potential, you know, front pay if they’re not able to find, you know, comparable work, you know, as well as,

VANNOY:

So just to be clear though, additional, if you, if you win the minimum is your attorney’s fees, right? If you lose, it’s probably your right. Yep. But if you lose, and that’s why you’re right. It’s, and, and, and,

SHENKER:

Right, and that, that’s the guiding principle when when you wind up in a litigation, you are assured of your own attorney’s costs. So that’s a minimum. So oftentimes, you know, and, and you know, e every case is different, right? And it depends what you know you know, venue you are in, whether it’s, you know, federal court or an agency. But, you know, let’s just say for example, you know, in a discrimination case, you know, these are very factual ca you know, highly factual cases. Oftentimes, you know, a, a summary judgment decision, which means we would avoid trial is not in the cards because the facts are in dispute. And so, you know, we’re talking, you know, potential, you know, high five figure and into this six figure costs for just the company’s own fees which, right, you know, no doubt leads companies often to, to early settlements where, you know, instead of paying your fees, you’re gonna pay something to the other side.

But, you know, either way it’s an expensive process. So, you know, these aren’t the situations you want to be in. You know, you want to be in the situation where you hear of something at the workplace and you immediately handle it, and you avoid these, you handle things in-house and you know, that doesn’t mean, you know, sweeping them under the rug. That means handling, handling them appropriately so that, you know, people are satisfied with how the company is acting. And, and I think, you know, that that’s most important because yeah, there’s exposure. And look, if we’re talking about a constructive discharge, then typically, you know, the court is going to consider the, the conduct pretty egregious. You know, this, it’s probably a case where punitive damages could be available, which are, you know, damages. The, the judge or jury might impose just as you know, punishment on the company for en engaging in such bad acts. So, you know, these, you know, discrimination cases can easily be six figures into seven figures. And so, you know, the, the cost of, you know, the right, you know, HR practices, you know, are, are much less and the avoidance, you know, of those things allows, you know, the company to focus on what it should be focused on, you know, the, the, you know, it’s profit making activities or, or other type of things.

VANNOY:

Let, let, let’s recap on that, cuz the title of, of this show today is Avoid Wrongful Termination Laws. So it’s what is constructive discharge spent a lot, you know, spent a lot of time talking about what is and is not, and all the nuance of constructive discharge at the end of the day is what’s your guidance to employers in this context? How do avoid all this from happening in the first place?

SHENKER:

Yeah, so absolutely. So I, I think, you know, the first step would be, you know, if there’s a ever a complaint of, you know, inappropriate conduct, whether, you know, HR thinks it rises to level of discrimination or harassment or even something smaller, it, it, it’s so important to investigate and document that investigation, right? Because even these things that don’t quite, you know, turn into actionable conduct, it’s still good to investigate because as a company, you want employees to be comfortable to come forward and make complaints. You want them to understand that their complaints are gonna be taken seriously and acted upon. And so I I think setting that culture is so important. And, you know, where does that start as say, a policy, right? You want to have, you know, minimally and you know, the e the EEO policy, and then, you know, I often recommend, you know, even having a standalone anti-retaliation policy, right?

That, you know, that kind of shows how important the company takes this. Yeah. And that anti, you know, retaliation policy, you know, we’ll, we’ll have the steps that, that, you know, the company will take, it’ll explain, you know, how, how a complaint should be made. It’ll explain that you can make complaints without fear of reprisal. And like we mentioned earlier, it’ll have that detailed structure for how to report a claim. And that’ll include multiple people. You know, companies can even consider you know anonymous hotlines. You know, some companies find that those are worthwhile and that, you know, it can help make employees comfortable to file complaints, you know, if, if you otherwise, you know, don’t have, you know, a culture where that’s accepted. Another important stru, you know, aspect is training. While employee training is always important, I, I’m very big on management training because, you know, I think those yes, are you know, managers are key line of defense as well as, you know, one of our potential biggest issues in causing problems for the company.

So I think, you know, we want managers trained to understand, you know, what protected activity is, what a complaint is, how to spot, you know, how, you know, harassment, how to spot, you know, what’s acceptable at work and what isn’t. And then, you know how to report it that, you know, man managers sometimes think, you know, they see things, but if an employee doesn’t say something, you know, they don’t have to say something. But really, you know, managers should be our eyes and ears, you know, so if they see something, they should know what to say, even if they don’t have a you know, a a com a complaint. You know, and employees should understand, you know, both ma you know, especially managers, what the consequences are for engaging in, you know, retaliation. Yeah. So, you know, a lot of this stuff, you know, just reinforces things that you and I have discussed today.

Yeah. but again, you get to a place where people will come forward to the company and then look at that point, it’s so important what the company does with it, right? Because what we see in a lot of these constructive discharge cases is that the company was aware of something and did nothing, you know, like, such as, you know, that that example when it returned, you know, the the accused, you know, bad actor back to the workplace so that he could, you know, continue working. So it’s very important we establish a culture where we’ll get these complaints and then we take every complaint, you know, seriously document it you know, figure out what needs to be done. And, you know, of, of course, Mike, you know, where, you know we don’t expect to know what to do in every situation. It’s difficult.

And, and by all means, you are going to run into situations that you haven’t had before. And, you know, that’s where, you know, having an Asure, for instance, that you can call one of their HR consultants to get advice, because the worst thing is to ignore these types of issues or to get it wrong in terms of the reaction. So, you know, it’s great. The first step is getting the complaint, knowing what’s going on in the workplace, and then the next step is appropriately dealing with it and, you know, reaching out for outside help if you’re not equipped to, you know, handle the the situation, you know, on your own.

VANNOY:

Brian, I appre I appreciate the plug. I, I guess I’ll say to our audience is that that is exactly what it sure does, right? So you think, you think back to the, the early 20th century you know, Upton Sinclair’s, the jungle, and the formation of unions and the, and the protection all the legal protection that happened over the following, you know, century obviously protection, sh shifting more and more to employees, not the employer. I personally believe that as the war for talent has hit Main Street, and there’s a genuine labor shortage, and if you study the macro economic trends of like birth rate, job participation rates, gdp, d p, productivity per gdp, p this, this labor shortage is here to stay. The, this, this is not the result of just a pandemic or an election cycle or a war.

 The, the world is facing a, a labor shortage. And, and we’re going to continue to see and feel that, that said, the power goes to the employee. So this isn’t just upon the, the responsibilities and just upon employers to follow the law. From an HR perspective, if you don’t have good employee practices, employee centric practices you’re not gonna be able to recruit and retain the talent that you need to succeed. So I, I, I really think that these things go, go hand in glove. The problem is, most small employers can’t afford a 90 year, $110,000 a year. Shrm certified HR professional, and that’s where we come in, because you can do that for pennies on the dollar on a fractional basis. So if you wanna learn more, they can, everybody can hop on our website maybe, maybe 20 seconds. Brian, how is it that you personally and your firm can help clients if they’re interested?

SHENKER:

Sure. Well, Jackson Lewis, we’re a nationwide employment defense law firm. We represent employers in all sorts of employment related matters. Running, running the gamut. Obviously what I’m involved in a lot of is litigation, but you know, we also do a lot of preventative work as well. And yeah. Mike, thank you for having me on today. Of course.

VANNOY:

Yeah. Yeah. As always, I, I learn, I learn a ton from you every time we talk. So until next time for you and I, Brian, and next time for our audience we’ll talk to everybody else next week. Thanks so much.