The Challenges in Distinguishing Voluntary Termination from Forced Resignation

Many employers attempt to defend against wrongful termination claims or contest eligibility for unemployment compensation based on the employee’s so-called resignation. At Deutsch Atkins & Kleinfeldt, P.C., we handle hundreds of wrongful termination claims and so recognize that, frequently, an employee’s forced resignation is merely a ruse to cover up constructive termination by the employer. A recent decision, Lord v. Board of Review, 40 A. 3d 94 – NJ: Appellate Div. 2012 addresses the issue of whether directing an employee to resign voluntarily is akin to firing.

The employee, Mr. Lord, whose work schedule was Monday-Thursday, called his employer on a Wednesday to notify his supervisor that he was having car trouble, and could not guarantee that he would be able to report to work on Monday. Mr. Lord informed his supervisor that he needed his transmission repaired. He also informed his employer that he was trying to reach his father to secure a loan to fix the car, and a friend for a ride.

Although the employee indicated he had been unsuccessful in reaching his father or friend, Mr. Lord never indicated a desire to terminate his employment relationship. When he could not assure his supervisor that he would be able to report to work on Monday, the supervisor told Mr. Lord that he “had to resign,” and that his resignation was, “effective immediately.”

Based on this directive from his employer, Mr. Lord presumed he had been terminated and filed for unemployment compensation the same day. He was denied unemployment compensation benefits by the Division of Unemployment Compensation based on the premise that he voluntarily resigned without good cause. The Appeal Tribunal upheld this denial, so he appealed to the Appellate Division.

Standard under New Jersey employment law for determining termination is voluntary

N.J.S.A. 43:21-5(a) provides in pertinent part that an employee who has left work voluntarily without good cause attributable to such work is ineligible for unemployment compensation benefits. The fundamental issue is whether the employee’s separation from the business is voluntary.  The court pointed out that prior decisions have held that an employee’s decision to end his or her employment is voluntary only if the decision whether to go or to stay lay at the time with the worker alone.

While the Appellate Division (second highest New Jersey court) found that Mr. Lord’s termination was involuntary, this case has factual nuances that make it difficult to determine the breadth of the decision. Mr. Lord left open the possibility that he would secure financial assistance or alternate transportation, but the supervisor demanded immediate assurance that he would be at work on Monday. In a situation where the employee knows he or she will not be able to report to work and says so, the outcome might well be different.

This case provides some insight into the distinction between when an employee quits or is fired, it also reveals the subtle distinctions that make these cases complicated. The New Jersey employment law attorneys at Deutsch Atkins & Kleinfeldt, P.C. provide sound legal advice and zealous representation to employees who have been wrongfully terminated or subject to employment discrimination.

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