United States: Supreme Court Rules That Statute Of Limitations Period For Constructive Discharge Claims Begins To Run From Date Of Notice Of Resignation

Executive Summary: The U.S. Supreme Court recently held that the statute of limitations period for constructive discharge claims under Title VII of the 1964 Civil Rights Act (Title VII) begins to run from the date that the employee gives the employer notice that the employee is resigning. Reversing the Tenth Circuit's decision in favor of the employer, in Green v. Brennan, the Supreme Court held that "the matter alleged to be discriminatory includes the employee's resignation," and that the limitation period for filing a claim for a constructive discharge begins running only after the employee resigns.

Constructive Discharge Claims

In Pennsylvania State Police v. Suders, the U.S. Supreme Court recognized that an employer may be liable for a constructive discharge under Title VII. To establish a claim for constructive discharge, the employee must establish that working conditions have become so intolerable that a reasonable person in the employee's position would have felt compelled to resign.

Green v. Brennan

In Brennan, Marvin Green, a former postmaster with the U.S. Postal Service, sued the Postmaster General, claiming he was constructively discharged by the Postal Service. The alleged constructive discharge occurred after Green complained that he had been denied a promotion because of his race. After making this complaint, Green's relations with his supervisors began to deteriorate. Two of his supervisors accused him of intentionally delaying the mail, a criminal offense, and he was subjected to an investigation and placed on off-duty status. The supervisors continued to make comments to Green about the potential consequences of a criminal charge even after the investigators advised that further investigation was not warranted. Green was given the option of retiring or accepting a much lower salary in another state in return for the Postal Service agreeing not to pursue criminal charges. A settlement agreement was signed. Green chose to retire and, 41 days after submitting his notice of resignation, filed a complaint with the Postal Service EEO Counselor over the alleged constructive discharge.

A federal trial court in Colorado granted the Postal Service's motion for summary judgment, accepting the argument that Green had failed to make contact with the EEO counselor within 45 days of "the matter alleged to be discriminatory," as required by the Equal Employment Opportunity Commission's (EEOC) regulation governing the complaint procedure for federal agencies and federal agency employees. The trial court's decision was affirmed on appeal by the Tenth Circuit, which found that Green's constructive discharge claim was time-barred. The Tenth Circuit held that the "matter alleged to be discriminatory" was limited to the discriminatory actions of the Postal Service and did not encompass Green's later decision to resign, which was 96 days after he signed the settlement agreement with the Postal Service.

The Supreme Court agreed to review the decision to resolve a split among the federal appeals courts on when the statute of limitations begins to run for a constructive discharge claim. The Tenth Circuit and two other appeals courts have held that the time period begins to run on the date of the employer's last discriminatory act; however, other federal appeals courts have held that the time period does not begin to run until the employee resigns. The Supreme Court reversed the Tenth Circuit's ruling, finding that the limitations period begins to run when the employee resigns.

The Court began its analysis by interpreting the EEOC regulation at issue while noting the EEOC treats the "federal and private-sector employee limitation period as identical in operation." The Court found that the text of the regulation was not "particularly helpful" so it turned to the "standard rule" for limitations periods. The Court stated that "ordinarily, a limitations period commences when the plaintiff has a complete and present cause of action." The Court continued its analysis by noting that "a cause of action does not become 'complete and present' for limitations purposes until the plaintiff can file suit and obtain relief." The Court applied the "default rule" and found that the "'matter alleged to be discriminatory' in a constructive discharge claim necessarily includes the employee's resignation."

According to the Court, there are three reasons that support this conclusion. First, the Court noted that "a resignation is part of the 'complete and present cause of action' necessary before a statute of limitations ordinarily begins to run." Second, the Court found nothing in the EEOC regulation that "clearly indicated an intent to displace this standard rule." Finally, the Court found that "practical considerations" supported the application of the standard rule in this situation.

Employer's Bottom Line: The practical effect of the Court's ruling in Brennan is the creation of a bright line rule regarding when the statute of limitations period begins to run in Title VII cases alleging constructive discharge. Private-sector employees will now have 180 days (300 days in states that have a state agency) from the date they give their notice of resignation to file an EEOC charge claiming constructive discharge in violation of Title VII, even though the underlying discriminatory act may have occurred beyond the statute of limitations period. While the standard for proving a constructive discharge remains challenging when compared to a normal discriminatory discharge claim, the Court's decision will make it more difficult for employers to prevail on an argument that a constructive discharge claim is untimely. According to the EEOC's Fiscal Year 2015 enforcement statistics, 4,569 charges of discrimination alleging constructive discharge under Title VII were filed as compared to 33,731 charges alleging a discriminatory discharge. It is likely that the number of constructive discharge charges will increase as a result of the Court's decision in Brennan.

While the Brennan decision is not a good one for employers since it will, in most cases, expand the time period for employees to file a constructive discharge claim, employers can take some steps to help ensure that the conditions of the workplace cannot objectively be viewed as "intolerable." Employers should continue to be vigilant to ensure employees who lodge internal complaints or file EEOC charges are not subject to retaliation. Additionally, employers should continue to investigate workplace complaints promptly, issue appropriate warnings to supervisory personnel against retaliating against employees who make complaints, and conduct follow-up monitoring during and after the investigation. Prompt disciplinary action should be taken against management personnel who violate company policy prohibiting retaliation. Company policy against retaliation should, of course, be contained in the employer's anti-harassment policy and clearly expressed, including the potential disciplinary consequences for violating the policy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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