Defending a Constructive Discharge Claim in Minnesota

What Is a Constructive Discharge Claim Under Minnesota Law?

A constructive discharge is a resignation the law treats as a firing. In Henry v. Independent School District #625, 988 N.W.2d 868 (Minn. 2023), the Minnesota Supreme Court described it as requiring “(1) objectively intolerable working conditions that are (2) created by the employer with the intention of forcing the employee to quit.” Both parts must be proven. In a disparate treatment claim, Henry also lets the employee prove the second part by showing that resignation was a reasonably foreseeable consequence of the employer’s deliberate actions.

Henry arose from an age discrimination claim under the MHRA, decided on summary judgment. The court held that a constructive discharge can satisfy the adverse employment action element of a disparate treatment claim under the MHRA. Two justices dissented in part and would have ruled for the school district.

The doctrine does not stand alone. In Coursolle v. EMC Insurance Group, Inc., 794 N.W.2d 652 (Minn. App. 2011), the Court of Appeals held that “constructive discharge is not an independent, free-standing cause of action.” It is a way to prove the adverse action inside another claim. The Court of Appeals explained the doctrine’s purpose in Pribil v. Archdiocese of St. Paul & Minneapolis, 533 N.W.2d 410 (Minn. App. 1995): it “was created to prevent employers from forcing employees into resigning by engaging in covert, calculated misconduct that would be illegal if done overtly.” For how courts separate an ordinary departure from a forced one, see how courts separate a voluntary resignation from a constructive discharge.

What Makes Working Conditions Objectively Intolerable?

The question is whether a reasonable person in the employee’s position would have felt compelled to resign, not how the employee felt. Henry recognizes two routes, and the proof differs by route.

1. Harassment. An employee claiming constructive discharge “due to a hostile work environment must prove that she quit due to intolerable harassment that satisfies the severe-or-pervasive standard.” The court described this as an aggravated hostile environment case, harassment pushed to the point of a forced resignation.
2. Disparate treatment. Without any harassment, the conditions can be intolerable “[w]hen an employer acts in a manner so as to have communicated to a reasonable employee that she will be terminated, and the plaintiff employee resigns.” The court called this the handwriting on the wall.

The disparate-treatment route has a limit that helps employers. Henry held that a working condition does not become intolerable “merely because “a prospect of discharge lurks in the background.”” An employee who quits for personal reasons, or because a firing is possible someday, does not meet the test. The court also declined to adopt a theory that would add up separate acts, none actionable alone, to create an adverse action.

How Does an Employee Prove the Company Wanted Them Gone?

The employee must prove employer intent, and Henry allows two ways to do it: “(1) by demonstrating that the employer deliberately created intolerable working conditions with the intent of forcing the employee to quit, or (2) by demonstrating that resignation was a reasonably foreseeable consequence of the employer’s deliberate actions.”

Evidence that the company tried to keep the employee cuts against intent. In Navarre v. South Washington County Schools, 652 N.W.2d 9 (Minn. 2002), the Minnesota Supreme Court found “no evidence that appellant intentionally tried to force respondent to resign,” because the school district had offered the teacher a position and “was attempting to work with, rather than against, respondent.”

In Diez v. Minnesota Mining & Manufacturing, 564 N.W.2d 575 (Minn. App. 1997), the court ruled in the alternative that, “[e]ven if we were to reach the merits of Diez’s claim, we conclude that it fails because Diez was not constructively discharged and there are no genuine issues of material fact precluding summary judgment in favor of 3M.” The court pointed out that the employee “was notified that he had received a salary increase and that he could continue employment, but he voluntarily chose to leave.”

The same reasoning appears in a recent unpublished decision. In Pearson v. St. Cloud Hospital, No. A23-0546 (Minn. App. May 13, 2024) (nonprecedential), the court applied Henry and found no intent because “the record suggests that CentraCare wanted to retain Pearson as a nurse after she reported the sexual harassment.”

In Henry itself, the intent evidence came from the employer’s own managers. A supervisor testified that a senior manager told her to make the employee’s improvement plan unrealistic, and her notes of that meeting read “out by May.” Your written record of why you made a decision, and what you offered the employee, can decide this element.

Why Does the Claim Need an Underlying Violation?

Under the at-will rule, a Minnesota employer may end employment for any reason that is not unlawful, and a constructive discharge is treated the same way. Coursolle held that an employer’s constructive discharge of an employee “has no consequences with respect to liability, unless the discharge was motivated by an unlawful reason.” The employee must prove a violation the resignation is attached to.

Sources of that violation for a Minnesota employer include:

• Discrimination. Minn. Stat. § 363A.08, subd. 2 makes it an unfair employment practice for an employer, because of a protected status such as race, sex, disability, or age, to “discharge an employee.” The same subdivision bars discrimination in “compensation, terms, upgrading, conditions, facilities, or privileges of employment,” except when based on a bona fide occupational qualification. The MHRA reaches small companies: Minn. Stat. § 363A.03, subd. 16 defines an employer as “a person who has one or more employees.”
• Reprisal. Minn. Stat. § 363A.15 bars reprisal against a person who “opposed a practice forbidden under this chapter” or took part in a charge or investigation. “A reprisal includes, but is not limited to, any form of intimidation, retaliation, or harassment.” See Minnesota’s retaliation statutes for the employer’s side of those claims.
• Whistleblower retaliation. Minn. Stat. § 181.932, subd. 1 bars an employer from retaliating “regarding the employee’s compensation, terms, conditions, location, or privileges of employment” because, for example, the employee in good faith reported a violation, suspected violation, or planned violation of law. Minn. Stat. § 181.935 lets an injured employee sue for damages, “costs and disbursements, including reasonable attorney’s fees,” and equitable relief.
• Contract terms. Coursolle describes constructive discharge as “a doctrine that may be invoked by a plaintiff in some employment-related actions” and notes that it “usually is applied in cases arising under the MHRA and Title VII.” The court also stated that a handbook disclaimer that “clearly expresses an employer’s intent to retain the at-will nature of the employment relationship will prevent the formation of a contractual right to continued employment.” An executive agreement may also give its own right to resign on defined terms; see contract clauses that define a resignation for good reason.

The whistleblower route has an open question. Coursolle noted that “[n]either the supreme court nor this court has applied the constructive discharge doctrine to a whistleblower claim,” then assumed, without deciding, that the doctrine could apply, and Pearson (nonprecedential) did the same. The Whistleblower Act and the reprisal section also reach conduct short of a firing, such as a threat or a transfer, so an employee who stays can still have a claim over the treatment itself.

When Does a Performance Improvement Plan Become a Constructive Discharge?

A performance improvement plan (PIP) alone is not a constructive discharge. Henry held that “the placement of an employee on a PIP does not, by itself, constitute an adverse employment action, particularly when the PIP is “reasonable” and/or “minimally onerous.”” An employee “cannot simply rely on the mere existence of the PIP to prove her claim.”

The employee in Henry got past summary judgment because the evidence showed a plan built to fail. Viewed in her favor, the record showed three evaluations in less than a year after about two years without one, trivial issues exaggerated to support discipline, and a plan intended to be unachievable. It also showed a letter saying termination was under consideration, harsher discipline than coworkers received, denial of training, and age-related comments by a senior manager. She had not received a negative review in nearly 20 years before the change.

The lesson for an employer is about the plan’s content and the record around it. A plan with measurable goals the employee can actually meet, applied the way you apply it to others, is the kind Henry says is not, by itself, an adverse employment action. If an employee responds by threatening to resign, see an employee who threatens to quit over a PIP.

What Happens When the Employee Never Complained Before Quitting?

For a disparate-treatment claim under the MHRA, the employee did not have to complain first. Henry declined “to require . . . that plaintiffs alleging disparate-treatment-based constructive discharge notify their employers of the intolerable conditions or otherwise attempt to mitigate the alleged mistreatment before resigning.” The court reasoned that when an employer is intentionally trying to get rid of an employee, requiring the employee to give it a chance to work out the problem makes little sense. The court added that it is not bound by the federal courts that have adopted such a requirement.

The employee’s silence still matters as evidence. Henry agreed that an effort by the employee at mitigation “may be relevant to whether the employer “intended to force her to quit or that it could have reasonably foreseen that she would do so.”” An employer that never heard about a problem can argue that it did not intend or foresee the resignation.

For harassment claims, a complaint channel can matter more. Frieler v. Carlson Marketing Group, Inc., 751 N.W.2d 558 (Minn. 2008) addressed sexual harassment by a supervisor under the MHRA where no tangible employment action was taken. In that setting, the Minnesota Supreme Court held that “the employer may raise an affirmative defense to liability or damages if it proves by a preponderance of the evidence” two things: that it took reasonable care to prevent and correct the harassment, and that the employee unreasonably failed to use the corrective opportunities. The defense is not available when the harassment “culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment.” Henry did not reach whether the Frieler defense should apply “in the age-based hostile-work-environment context” and to “age-based hostile-work-environment constructive-discharge claims.” A prompt, documented response to complaints helps under either rule; see investigating a workplace complaint.

How Does Federal Law Treat Constructive Discharge Differently?

Federal discrimination law reaches fewer employers and uses a different test. Title VII applies to an employer with “fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year” under 42 U.S.C. § 2000e(b), which excludes employers such as the United States, Indian tribes, and certain private membership clubs other than labor organizations. The federal age discrimination law applies to a private employer at twenty or more employees under 29 U.S.C. § 630(b). The same definition “also means” “a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State, and any interstate agency, but such term does not include the United States, or a corporation wholly owned by the Government of the United States.” In Mount Lemmon Fire District v. Guido, 586 U.S. 1 (2018), the U.S. Supreme Court read that clause to cover “States or political subdivisions with no attendant numerosity limitation,” so a state or local government employer is covered whatever its size.

The federal test does not require intent. In a Title VII case brought by a federal employee, Green v. Brennan, 578 U.S. 547 (2016), the U.S. Supreme Court said that “[a] claim of constructive discharge therefore has two basic elements”: discrimination so severe that a reasonable person would feel compelled to resign, and an actual resignation. The Court declined to require proof “that his quitting was his employer’s plan all along.” Minnesota’s MHRA test in Henry does require intent or reasonable foreseeability, and Henry noted that federal case law does not bind Minnesota courts applying the MHRA.

Federal law also gives employers a harassment-policy defense. In Pennsylvania State Police v. Suders, 542 U.S. 129 (2004), a Title VII supervisor-harassment case, the Court held that an employer “may defend against such a claim by showing both (1) that it had installed a readily accessible and effective policy for reporting and resolving complaints of sexual harassment, and (2) that the plaintiff unreasonably failed to avail herself of that employer-provided preventive or remedial apparatus.” That defense is lost if the employee quit in response to an official act, “for example, a humiliating demotion, extreme cut in pay, or transfer to a position in which she would face unbearable working conditions.”

How Does Minnesota Unemployment Law Treat a Forced Resignation?

Unemployment benefits follow a separate rule. Minn. Stat. § 268.095, subd. 2(b), states: “When determining if an applicant quit, the theory of a constructive quit does not apply.” An employee who quit is ineligible unless an exception in subdivision 1 applies, and one of those exceptions is a quit “because of a good reason caused by the employer.” Subdivision 1(9) states a separate exception, with no complaint step, when “the applicant quit because domestic abuse, sexual assault, or harassment or stalking of the applicant or an immediate family member of the applicant, necessitated the applicant’s quitting the employment.” For that exception, harassment or stalking “means an act that would constitute a violation of section 609.749.”

Subdivision 3 defines a good reason caused by the employer, including that it “would compel an average, reasonable worker to quit and become unemployed rather than remaining in the employment.” Three parts of § 268.095 matter for an employer:

1. Complaint first. Under subdivision 3(c), an applicant subjected to adverse working conditions “must complain to the employer and give the employer a reasonable opportunity to correct the adverse working conditions” before those conditions can be a good reason. That is the opposite of the Henry rule for an MHRA lawsuit.
2. Notice of a future discharge. Under subdivision 2(c), an employee told of a future discharge “who chooses to end the employment while employment in any capacity is still available, has quit the employment,” and subdivision 3(e) says notice of a future discharge is not a good reason caused by the employer. Under subdivision 5(a), a discharge occurs “when any words or actions by an employer would lead a reasonable employee to believe that the employer will no longer allow the employee to work for the employer in any capacity.” A layoff notice has its own exception in subdivision 1(6), when “the applicant quit because the employer notified the applicant that the applicant was going to be laid off because of lack of work within 30 calendar days. An applicant who quit employment within 30 calendar days of a notified date of layoff because of lack of work is ineligible for unemployment benefits through the end of the week that includes the scheduled date of layoff.” I suggest checking the current text of that exception when you announce a layoff.
3. Sexual harassment. Under subdivision 3(f), an applicant has a good reason if the quit results from sexual harassment “of which the employer was aware, or should have been aware, and the employer failed to take timely and appropriate action.”

The unemployment result does not carry into the lawsuit. Minn. Stat. § 268.105, subd. 5a, bars an unemployment law judge’s findings, decision, or order from being “used as evidence in any separate or subsequent action in any other forum, be it contractual, administrative, or judicial, except proceedings provided for under this chapter,” even when the action involves the same parties or facts. Subdivision 5(b) bars use of hearing testimony in later civil proceedings, except by a human rights agency with enforcement powers, unless the department started the proceeding. Under subdivision 5(a), “recorded testimony and other evidence may later be made available only under a district court order,” and a subpoena is not such an order. For the hearing itself, see contesting a Minnesota unemployment claim.

What Steps Reduce the Risk of a Constructive Discharge Claim?

These steps give a court evidence that you were not trying to force anyone out. I suggest these, each for the reason given:

1. Performance plans an employee can meet. I suggest measurable goals and a realistic timeline because Henry treats a reasonable plan as legitimate and a plan designed to fail as evidence of intent.
2. Written status during an investigation. Once, an owner had cut off an employee’s system access during a dispute without saying whether the employee still had a job. I advised a short written notice that the employee was suspended with pay pending an investigation, so the silence would not harden into a claim that the company had constructively terminated the employee. I suggest the same kind of notice when an employee’s status is unclear, because it shows the company acted deliberately.
3. Prompt, written responses to complaints. I suggest responding promptly and in writing because Frieler ties the harassment defense to reasonable care to prevent and correct harassment, and § 363A.15 treats retaliation against a person who opposed discrimination as reprisal.
4. Documented reasons for changes after protected activity. I suggest documenting the business reason before changing pay, title, or duties after an employee complains, because § 363A.15 lists transfer “to a lesser position in terms of wages, hours, job classification, job security, or other employment status” as reprisal when done because of protected activity. For planned changes, see reassigning roles.
5. A written offer of continued work. When the job remains available, I suggest saying so in writing, because Navarre found no intent to force a resignation where the employer had offered a position, and Diez, in its alternative merits ruling, pointed to notice that the employee could continue employment.
6. A clear decision when the employment ends. I suggest a clear termination over a slow squeeze because an exit you decide and document rests on your stated reason, while a resignation under pressure invites the argument that you made the job intolerable on purpose.

How Should a Separation Agreement Handle a Possible Constructive Discharge Claim?

A release can resolve the claim, but Minnesota and federal law each add conditions. Under Minn. Stat. § 363A.31, subd. 1, a waiver of MHRA rights “is contrary to public policy and void if the waiver or release purports to waive claims arising out of acts or practices which occur after the execution of the waiver or release.” That rule reaches any such provision, oral or written. Subdivision 2 gives the employee a right to rescind. A release of MHRA claims arising before or at signing “may be rescinded within 15 calendar days of its execution, except that a waiver or release given in settlement of a claim filed with the department or with another administrative agency or judicial body is valid and final upon execution.” The employee “shall be informed in writing of the right to rescind the waiver or release.” I suggest stating the rescission right in the agreement itself, because the statute requires that written notice, and checking the current statute text when you prepare it.

For a private employer with twenty or more employees, or a state or local government employer of any size, a release of federal age claims must meet 29 U.S.C. § 626(f). Under the statute, an individual “may not waive any right or claim under this chapter unless the waiver is knowing and voluntary,” and it sets minimum terms. One is that “the individual is advised in writing to consult with an attorney prior to executing the agreement,” and I suggest putting that advice in the agreement itself. Another is a period “of at least 21 days within which to consider the agreement” for an individual offer, and a longer period for a group program. A third is a revocation period “of at least 7 days following the execution of such agreement,” before which the agreement does not take effect. I suggest checking the current text of § 626(f) for each period before relying on it. A different rule applies when the release settles an age discrimination charge filed with the Equal Employment Opportunity Commission or a lawsuit: the basic terms still apply, and “the individual is given a reasonable period of time within which to consider the settlement agreement.” For the full drafting checklist, see drafting a Minnesota severance agreement.

Next Steps for a Minnesota Employer Facing This Claim

A constructive discharge claim in Minnesota needs three things: objectively intolerable conditions, employer intent or a reasonably foreseeable resignation, and an underlying violation such as discrimination or reprisal. Your documents decide much of it: the performance plan, the response to any complaint, the written offer of continued work, and the reason for any change in pay or duties. The unemployment claim runs separately, and its result does not carry into the lawsuit.

If a resignation at your company may turn into a claim, email me at [email protected] with a brief description of the situation. I can analyze whether the facts meet the Henry test and prepare a separation agreement that meets the Minnesota and federal release rules. More employer guidance is on my employment law practice page.