Suppose that an employer in New York State has decided
(for a legitimate, nondiscriminatory reason) to end its working relationship
with a particular worker. Is the employer best off firing the worker outright or, instead, offering the worker
the opportunity to quit rather than be fired?
In New York, it makes little or no difference whether an
employer discharges an employee or, instead, gives the employee the
choice of leaving or being discharged, upon which, in order to avoid discharge, the employee quits.
Further, in either circumstance, particularly if the
worker has potentially meritorious claims against the the employer, the
employer should offer the worker severance pay in exchange for signing a
separation agreement. That separation agreement should include a "general
release," which release absolves the employer of any and all liability for
claims arising from the working relationship or the termination of that
relationship.
There are at least two reasons why, in New York, it makes
scant or no difference whether an employer terminates a worker or, instead, gives the worker the
choice of leaving or being terminated, upon which, in order to avoid termination, the employee resigns.
First, either way, unless the employee is discharged because of, or quits to avoid being
discharged because of, "misconduct" in connection with his or her employment, the
employee is eligible to receive unemployment insurance benefits in New
York. See N.Y. Labor Law § 593(3).
This is the case because " 'If an employer gives the
claimant the choice of leaving or being discharged and the claimant resigns in
order to avoid discharge, it is generally held that he does not leave
voluntarily.' " A.B. Case 8936-43 (N.Y. Unemployment Ins. Appeal Bd.
Sept. 24, 1943) (citation omitted); see N.Y. Labor Law § 593(1); cf.
Matter of Jiminez, 20 A.D.3d 843, 843, 798 N.Y.S.2d 803 (3d Dep't 2005) ("A
claimant 'who voluntarily leaves his or her position in the face of
disciplinary charges may qualify for unemployment benefits if the actions did
not amount to misconduct' ") (citation omitted).
Second, if the employer fires the employee because of his or her race, color,
religion, sex, or national origin, then, under both federal law and New York
law, the employee has a viable cause of action against the employer for discriminatory discharge. Likewise, if, because of
the employee's race, color, religion, gender, or national origin, the employer
tells the employee to quit or be fired, upon which threat the employee quits,
then, under both federal law and New York law, the employee has a viable cause
of action against the employer for constructive discharge. See Lopez
v. S.B. Thomas, Inc., 831 F.2d 1184, 1186, 1188-1189 (2d Cir. 1987) (where
the plaintiff individual alleged that, shortly before he quit his job, his
former employer "told [the plaintiff] he would be fired at the end of the
90-day probationary period no matter what he did to improve his allegedly
deficient performance," a genuine issue of material fact, precluding
entry of summary judgment for the ex-employer, existed as to whether, because
of the plaintiff's national origin, he was constructively discharged).
To put it another way, an employer in New York cannot, by
offering a worker the opportunity to resign his job rather than be fired,
preclude that worker from maintaining a cause of action against the employer
for discriminatory discharge.
Some human resources ("HR") professionals maintain that,
when an employer has decided to end its employment relationship with an individual, it is in the
employer's interest to offer the individual the opportunity to quit in lieu of
being fired, rather than to fire the worker outright. These HR professionals
argue that when an individual is able to represent to interviewers that he or
she resigned from, and was not terminated by, his or her former employer, he or
she avoids shame and embarrassment, more readily obtains new employment, and
less frequently sues the former employer on employment-related claims. In
my view, these arguments for 'allowing' an employee to quit his or her
employment are, at best, overstated.
Because an employer's negative employment reference may
cause the former employee to sue the employer for defamation or retaliation,
many employers in New York provide, to companies which request a reference,
only the ex-employee's dates of employment and most recent job title. An employer
with such a policy will refrain from stating, to businesses which ask for a
reference, whether the ex-employee was terminated or, instead, voluntarily left
his employment.
As a result, where it is an employer's policy merely to
verify an ex-employee's dates of employment and most recent position, an employee who is
given the choice of leaving or being discharged, and who thereupon quits, will
no more readily find new employment than an employee who is fired outright.
If your company needs assistance or guidance on a labor or employment law issue and your company is located
in the New York City area, call Attorney David S. Rich at (212) 209-3972.
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