Constructive Discharge Claims: Recent Appellate Decision Narrows Availability

In our defense of employers, we often see the situation where an employee who has quit makes the argument as part of the claim that the actions of the employer compelled the employee to resign. This “constructive discharge” argument can take a relatively modest claim and turn it into one where years of lost wages and benefits are sought.

An evolving body of case law has built up around this constructive discharge theory, first formally recognized in Massachusetts in 1995. Essentially that theory stands for the proposition that an employer cannot accomplish indirectly what the law prohibits it from doing directly. Stated differently, an employer who cannot terminate an employee discriminatorily cannot engage in a calculated discriminatory effort that forces that employee to quit.

Historically, there have been two types of constructive discharge cases recognized in this arena. In the “working conditions” line of cases, a court must gauge whether the working conditions imposed by the employer would have been so intolerable that a reasonable person in the employee’s shoes would have felt compelled to resign. There are limits to the “working conditions” line of cases, however. As colorfully stated by one judge, “the workplace is not a cocoon, and those who labor in it are expected to have reasonably thick skins—thick enough, at least, to survive the ordinary slings and arrows that workers routinely encounter in a hard, cold world. Thus, the constructive discharge standard, properly applied, does not guarantee a workplace free from the usual ebb and flow of power relations and inter-office politics.”

A separate “demotion” line of cases provides an alternative means for a plaintiff-employee to establish a constructive discharge without having to show intolerable conditions imposed by the employer. Under this theory, when an employee is engaged to fill a particular position in the service of his employer, a demotion or a material loss of status or authority of a managerial or supervisory employee may be tantamount to an involuntary discharge (assuming the employee quits).

Since the theory was first recognized, plaintiff-employees have attempted to push those boundaries, often receiving a sympathetic ear from courts and our Commission Against Discrimination. Bucking that trend, the Massachusetts Appeals Court decided the case of Priscilla Flint v. City of Boston on October 24, 2018, holding the line on what facts could support a claim of constructive discharge under the “demotions” precedents.

In Flint, the plaintiff had been informed that she was going to be promoted to manage two departments. She was also informed that a pay raise of $5,000-10,000 per year would follow. In reliance, the plaintiff undertook the substantially increased workload, part of which included management of several additional staff members. A year after undertaking the increased duties, the plaintiff asked where her raise was and received further promises that she was going to get it. Additional unmet promises were made over the next several months.

The pay raise never materialized. Eighteen months after the plaintiff had begun the new job, the City finally informed her that she would not be getting a raise for “budgetary reasons.” After unsuccessfully attempting to file a grievance, the plaintiff then “retired.” In the litigation that followed, the plaintiff asserted that her retirement was not voluntary, but was rather a constructive discharge.

The underlying tenet behind both the “working conditions” and “demotions” lines of constructive discharge cases is that an employee has been subjected to materially less favorable conditions of employment that compelled the employee to quit. Citing the second line of cases, the plaintiff argued that non-payment of the repeatedly-promised raise was the equivalent of a material reduction of her rank or a material change in her duties. It is hard to contest that working much harder in a higher position without being paid the substantial increase that was repeatedly promised was materially unfavorable.

The court held otherwise noting that Ms. Flint received additional responsibilities and increased authority. Against that material increase in her responsibilities and authority, however, the court held that the determination not to give her the raise could not fit within the “demotions” line of cases. As a result, her claim that she was constructively discharged was dismissed.

Because this was an intermediate appellate court, there is the possibility that the Massachusetts Supreme Judicial Court will review it and take a different view. In the meantime, however, this case stands for the proposition that decreased responsibilities and authority can provide the basis for a constructive discharge claim, but a failure to pay a promised raise for those increased responsibilities cannot.

Although for now employers can take solace in knowing that facts such as presented in the Flint case will not support a claim of constructive discharge, there can be little doubt that a plaintiff facing similar facts in the future may also assert a claim of promissory estoppel based on the refusal to honor the promise of a raise. Because the plaintiff in such a case will appear sympathetic in the eyes of a jury, employers are well advised to avoid the kind of monetary promises that will prove difficult to keep.

About Rich Van Nostrand

Rich is a partner at the Firm. He has extensive experience in general civil trial work, with concentrations in business, commercial and employment litigation. He provides advice and representation in a variety of business and commercial litigation matters, including shareholder disputes, corporate dissolutions, intra- and inter-company disagreements, and intra-family business disputes. Rich also provides ongoing employment litigation and counseling services to numerous clients in the private, public and higher education sectors. In the private sector, Rich represents clients in a broad range of industries including health care, professional services, high technology, industrial and manufacturing. In addition, he is also frequently selected by litigants to assist in the resolution of their disputes as an independent arbitrator or mediator.
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