CONSTRUCTIVE DISCHARGE
CONSTRUCTIVE DISCHARGE When the law looks behind the form of a transaction to discover its true substance, it uses the strange term constructive. In a constructive discharge, it may appear that the employee quit, but because of the underlying circumstances, the law concludes that he or she was fired.
Take, for example, employees who are told that unless they quit, they will be fired. It is easy to see why the law would view that as an involuntary termination. An employer’s request for a resignation will be treated the same way.
But the concept of constructive discharge goes beyond the quit-or-be-fired scenario. When an employer permits working conditions to become so intolerable that a reasonable person would quit, an employee who actually does quit rather than suffer the conditions will be deemed to have been fired. To illustrate, suppose serious safety hazards exist at the workplace that the employer knows about but refuses to fix. Or suppose a minority employee is subjected to severe and pervasive racial harassment by supervisors and fellow employees.
Under certain circumstances, a change in title or duties could amount to a constructive discharge. For example, the president of a company, whose contract specifies that he or she is the chief executive officer, might be able to claim constructive discharge on being required to report to the newly appointed chair or being stripped of some of his or her executive authority, even though the president’s salary remains the same.
