In Judge v. Shikellamy Sch. Dist., No. 17-2189, 2018 U.S. App. LEXIS 27229 (3d Cir. Sep. 24, 2018), the 3rd Circuit Court of Appeals adopted a new approach to constructive discharge cases where an employee alleges coerced resignation in lieu of disciplinary proceedings.

Background

Plaintiff Holly Judge, a tenured school principal in Shikellamy School District, resigned after she was arrested for driving while intoxicated. The blood alcohol test revealed that Plaintiff’s blood alcohol content was .332, more than four times the legal limit. Plaintiff was released the same night, and formal criminal charges were not filed at that time.

Twenty days after Plaintiff’s arrest, the Superintendent of Plaintiff’s school district visited Plaintiff’s office and inquired about the incident, which Plaintiff acknowledged. That afternoon, Plaintiff was summoned to the Superintendent’s office and was asked to resign immediately. In exchange for Plaintiff’s resignation, the superintendent offered to provide a neutral reference, but if Plaintiff declined the offer, Plaintiff would be issued a written charge of dismissal premised on “Immorality.” A pre-termination hearing would follow pursuant to Plaintiff’s employment contract. Plaintiff was given until 12:30 pm the following day to accept or decline the ultimatum. Plaintiff did not consult her criminal lawyer whom she had retained after her arrest, but after speaking with her mother that evening and learning that she was charged with “general impairment” and “highest rate of alcohol” DUI under Pennsylvania law, Plaintiff resigned by the deadline.

Thereafter, Plaintiff filed procedural and substantive due process, equal protection, and breach of contract claims against the school district and other individually named Defendants, all under a constructive discharge theory. Plaintiff’s breach of contract and procedural due process claims survived a motion to dismiss but were dismissed on summary judgment. Plaintiff then appealed to the 3rd Circuit.

The 3rd Circuit’s New Approach to Constructive Discharge Claims

The 3rd Circuit acknowledged that there was a rebuttable presumption that employees tender their resignations voluntarily. As such, employees carry the burden of producing evidence that their resignation was involuntarily procured via coercion or duress, viewed objectively.

However, the Court noted that it had not “explained how claims of constructive discharge should be evaluated.” The Court found that the five factors examined by 11th Circuit in Hargray v. City of Hallandale, 57 F.3d 1560 (11th Cir. 1995), provided a useful framework: (1) whether the employee was given some alternative to resignation; (2) whether the employee understood the nature of the choice she was given; (3) whether the employee was given a reasonable time in which to choose; (4) whether the employee was permitted to select the effective date of the resignation; and (5) whether the employee had the advice of counsel. Affirming the district court, the 3rd Circuit closely examined each factor and held that the balance of the factors was insufficient for a reasonable jury to find Plaintiff had overcome the presumption that her resignation was voluntary.

The New Approach Applied

The 3rd Circuit found that the first three factors weighed in favor of the school district. First, the Court found that Plaintiff was offered an alternative to immediate resignation — a written statement of charges for dismissal followed by a hearing before any termination decision. Noting that the charges were not an illusory alternative, the Court highlighted that Pennsylvania law permitted discharge of tenured teachers for immoral conduct and recognized that driving while intoxicated under “certain circumstances” fell within the definition of such conduct.

Second, the Court found that a reasonable school principal would have understood the nature of Plaintiff’s choice between resignation and termination charges because Plaintiff’s annually signed contract outlined the procedure. Third, although Plaintiff had less than 24 hours to decide on the Superintendent’s ultimatum, the Court reasoned that “the clear possible effect of a DUI on the night of her arrest gave [Plaintiff] more than two weeks to foresee the gathering storm.”

Although the Court found that the fourth and fifth factors favored Plaintiff “to some extent,” it noted the fact that from the arrest to her resignation, Plaintiff only consulted her mother despite having retained counsel in anticipation of criminal charges. Thus, notwithstanding Plaintiff’s uncounseled decision and inability to set her resignation date, the appellate court presumed her resignation voluntary as a matter of law.

Takeaways

While the presumption that employees who resign do so voluntarily can be viewed as an employer-friendly legal standard, the 3rd Circuit’s analysis under the newly adopted framework suggests a fact-intensive inquiry that should make employers tread carefully when presenting an employee with the option to resign in the face of serious charges.