Monthly Archives: March 2017

Say your employer told you that your employment is going to end, and you have the “choice” to resign rather than be fired. (Many employers do this in conjunction with presenting a severance agreement that has a “resignation notice” as an exhibit the employee can sign and submit). Understandably, if your employer puts you in this situation, you may view your impending decision in the terms the employer presented: “Should I resign or not?”

This is actually not the question you should decide. At least not at first. There are more important factors to consider before giving the employer an answer (or a signed resignation notice, etc.).

These other factors, and other questions, should first be considered:

• A documented “resignation” could possibly hurt your chance to receive unemployment benefits.

A given State’s unemployment office may consider a resignation to be basis to disqualify a worker from unemployment benefits eligibility. Although a given State may also ask questions to determine if a so-called “resignation” was involuntary and initiated by the employer. A given State may award unemployment benefits for various forced-resignation scenarios. The bottom line is this is something you could learn more about, with respect to your given State and situation, before make the “resignation” decision presented by the employer.

• Would the employer agree to not contest your unemployment benefits, and to (correctly) report to the unemployment office that the ending of your employment was involuntary (whether labeled a forced “resignation” or not)?

This relates to issues above. If an employer agrees, e.g. via a severance agreement, not to contest unemployment and to acknowledge the truth to unemployment authorities that the ending of employment was involuntary, then there may be less risk in agreeing to a forced “resignation”, depending on the State and it unemployment eligibility criteria involved. In my home State of Wisconsin, many such forced-resignation scenarios do qualify for unemployment benefits.

• If you are considering potential legal claims and/or severance negotiations, agreeing to a “resignation” could potentially hurt related legal rights or leverage.

Generally speaking, legal claims under employment law (e.g. a legal complaint alleging a job termination violated discrimination law) are tougher to win if a worker is alleged to have resigned rather than been discharged.  Please note that every situation is different, and I have represented workers with forced “resignations” who had very successful litigation and severance outcomes. But documenting a resignation can present a very real risk factor for many workers who have potential legal rights that could be explored in severance negotiations and/or litigation.

• If you did not agree to call your job ending a “resignation”, would the employer disclose the fact you were involuntarily terminated to any new prospective employer(s) you applied to?

Many workers are rightfully concerned that a discharge looks bad on their “record”, and see a resignation as looking better when communicating to a new potential employer, etc. (Of course, having a “resignation” on one’s resume or job application could also conceivably raise an issue with a new employer, if it looks like the resignation occurred with a gap in service, or no new job to go to). One issue of note is that many former employers do not themselves disclose to prospective employers any information about how the former employee’s job ended, whether it was a discharge or resignation, etc. Many employers follow a “neutral reference” policy where they only disclose very limited and neutral job reference information, i.e. the worker’s dates of employment, job title and perhaps pay rate. If your former employer would follow such a neutral reference policy, that information could be helpful in deciding whether to agree to a forced “resignation” or not.

• Whether you decided to label your job-ending a “resignation” or not, how would you best explain the circumstances of your job ending to a new potential employer?

You should envision what you would say to a new potential employer under either scenario, and would of course need to speak truthfully about not only the agreed categorization (i.e. “resignation” vs. discharge), but also speak truthfully about factual circumstances. If you agree with your former employer to take the “resignation” option and to categorize your end of employment as such, you will still probably need to explain related factual circumstances with a new potential employer– which will likely want to know what happened and ask questions accordingly. You would also need an explanation for a new employer if you did not agree to the forced “resignation” option. Before making a decision as to “resignation”, you should visualize each potential scenario and each associated communication with a new prospective employer that would occur.

Conclusion

Before answering an employer’s request to categorize their ending of your employment as a discharge versus forced “resignation” option, you should consider the issues above, as well as any other related issues of importance to you. There is no best-answer that applies universally for all workers in this situation, but considering the issues above– before making your decision– will likely help you arrive at the best decision for you.

Many employees who are discharged or offered a severance will, understandably, research internet information about what options they may have.  For example, it is common for a discharged employee to research internet information about legal complaints, such as discrimination or wage complaints. For workers offered a severance agreement, it is common for them to research internet information about what a “typical” or fair severance payment may be, what leverage may exist to negotiate better terms with the employer, etc.

Many workers then rely on such internet research to take various actions, e.g. they go on to file a discrimination complaint, or try to negotiate better severance terms with their former employer, using the internet information they reviewed.

Once action is taken, the employee has significantly changed his or her situation– for good or for bad.

I liken this to taking a road trip. Once you have driven down a certain road for awhile, you have committed yourself to a journey. If you failed to plan appropriately beforehand, that trip could lead to big problems. For example, if you fail to research or identify how long or how much time the trip would be, you may fail to fuel up your vehicle sufficiently, and could later find yourself stranded on the road. And associated with that unforeseen bad consequence come towing costs, lost time, and other headaches. Alternatively, you may take off on a trip and find yourself in a long drive down a road to nowhere– or, even worse, a road to an unpleasant destination– when other roads (unbeknownst to you) would have been far more promising.

Before you take action with regard to a discharge or severance, consider whether you’re truly going to head down the right road.  To determine that, you’d need to have answers to these questions:

• How long will the chosen road/option be and take to complete? How do you know (e.g. have you learned of that option’s timing and proces from a credible source, such as an attorney experienced with that option)?

• What specific good and bad result(s) could occur from taking that road? How do you know?

• What other roads/options exist, and what specific good and bad result(s) could occur from taking those roads? How do you know?

Educating yourself about options is a good thing. Especially if the information is free. That includes talking to an employee rights attorney (yes, like me :)) who offers a free initial evaluation of a discharge or severance matter.  But once you take action, you may have committed yourself to processes, consequences and/or costs that you did not initially anticipate.

As an attorney, I get inquiries from workers at many stages of their journey, and I can usually offer at least some help no matter what. But the most effective time for you to capitalize on legal advice is to obtain it before you take action. Too often, I get inquiries from folks who have (again, understandably) traveled far down the wrong road. Sometimes, a detour– and decent trip– is still possible. But rarely does the same degree of potential exist as for those who seek direct legal advice before committing to a given path.