On May 23, 2016, the United States Supreme Court issued its decision in Green v. Brennan, holding that the statute of limitations for a constructive discharge claim begins to run at the time the employee resigns.  While the Court’s 7-1 decision was unsurprising and does not change the substantive law of constructive discharge, it provides employers and employees alike with the benefit of a clear rule for assessing the timeliness of charges alleging constructive discharge.

Background

Marvin Green was a manager with the U.S. Postal Service for 25 years, most recently serving as a postmaster in Englewood, Colorado.  In 2008, he filed a formal charge with the Postal Service’s EEO office, alleging that he was denied a postmaster position in Denver because of his race.  In May and July 2009, Green filed informal charges alleging that he had been retaliated against because of his report of race discrimination.  In November 2009, Green was informed that he was the subject of a Postal Service investigation into claims he had intentionally delayed the mail, failed to properly handle employee grievances, and sexually harassed a female employee.  On December 16, 2009, Green signed a settlement agreement.  That agreement provided that he would immediately give up his postmaster position and receive paid leave until March 31, 2010, after which he could choose either to retire or to accept a position at significantly lower pay in Wamsutter, Wyoming, about 300 miles away.  In exchange, the Postal Service agreed to pursue no charges against him.  On February 9, 2010, Green submitted his retirement papers, effective March 31, 2010.  On March 22, 2010, he initiated counseling with the Postal Service’s EEO office.

Lower Court Rulings

Green filed a federal lawsuit in Colorado district court alleging, among other things, that the Postal Service had retaliated against him in violation of Title VII by constructively discharging him from his employment.  The district court dismissed this claim as time-barred.  Unlike a private sector employee, who generally has 180 or 300 days to file a charge of discrimination with the EEOC, federal employees must begin the administrative process by contacting an EEO counselor in the employee’s agency within 45 days of the “matter alleged to be discriminatory.”  29 C.F.R. § 1614.105(a)(1).  The U.S. Court of Appeals for the Tenth Circuit affirmed, holding that the limitations period for the constructive discharge period began to run on December 16, 2009, when Green entered into the settlement agreement, which represented the date of the last discriminatory act by the Postal Service.  As a result, his claim was untimely. 

Supreme Court Decision

The U.S. Supreme Court agreed to resolve a circuit split on whether the filing period for a constructive discharge claim begins to run when an employee resigns, or at the time of an employer’s last allegedly discriminatory act giving rise to the resignation.  One procedural peculiarity was that neither the Postal Service nor Green was defending the Tenth Circuit’s decision.  Both advocated for the rule that starts the limitations period upon the employee’s notice of resignation; they disagreed, however, on when that happened.  As a result, the Court appointed amicus curiae to defend the Tenth Circuit’s position.

In an opinion by Justice Sotomayor, and joined by five other justices, the Court held that the 45-day clock for initiating counseling begins to run on the date an employee resigns.  The Court found that the term “matter alleged to be discriminatory” was unclear, so it relied on the “standard rule” for limitations periods: the limitations period begins to run when the plaintiff has a “complete and present” cause of action, and that a cause of action does not become complete and present until the plaintiff can file suit and obtain relief.  Applying this rule, the Court found that the “matter alleged to be discriminatory” in a constructive discharge claim includes the employee’s resignation for three reasons.

First, a resignation is an essential component of a cause of action for constructive discharge.  Although a constructive discharge requires that the employer create conditions so intolerable that a reasonable person in the employee’s position would have felt compelled to resign, an employee has no cause of action until that resignation takes place.  Second, nothing in the statute or regulations suggests this standard rule should be displaced.  Third, nothing inherent in the term “matter alleged to be discriminatory” limits that term to employer conduct; rather the employee’s reasonable decision to resign is an essential element of the claim and is the legal equivalent of a formal discharge.

The Supreme Court’s decision contained two other important components.  The Court held that an employee resigns – triggering the statute of limitations – when he gives his employer definite notice of his intent to resign.  For example, when an employee resigns and gives two weeks’ notice, the period begins to run on the day he tells the employer, not the last day of employment.  The Court remanded the case to the Tenth Circuit to evaluate the question of when definite notice of resignation was provided in Green’s case.

In addition, the Court recognized that the public sector regulation applicable to Green – requiring initiation of counseling with 45 days of the “matter alleged to be discriminatory” – differs from the statutory requirement that a private sector employee file a charge of discrimination within 180 or 300 days after the “alleged unlawful employment practice occurred.”  42 U.S.C. § 2000e-5(e)(1).  The Court noted that the EEOC treats this language as “identical in operation” and said nothing to suggest that it disagreed with this conclusion.  Coupled with the express statement from Justice Alito’s concurrence that “nothing in either text requires that they be read as setting different rules,” it appears likely that the Green holding will be extended to all Title VII constructive discharge cases, including those brought by private sector employees. 

Employer Takeaways

The Green decision does not change the substantive law of constructive discharge, and requires no adjustments in the way employers handle day-to-day personnel decisions.  From a risk management perspective, however, employers gained valuable clarity.  Specifically, the decision:

• Provides a clear date – notice of resignation – on which the limitations period for a constructive discharge claim will begin to run.
• Will likely apply to all Title VII constructive discharge claims, whether public or private sector.
• Will lead to more claims, which is a natural consequence of adopting the interpretation that lengthens the filing period.