Supreme Court Establishes Statute of Limitations Standard for a Constructive Discharge Claim

Paula Lopez, June 3, 2016.

On May 23, 2016, the Supreme Court decided Green v. Brennan, resolving a circuit court split on when the statute of limitations begins to run on an employee’s constructive discharge claim under Title VII of the 1964 Civil Rights Act.  The Court, in a 7-1 vote, ruled that the statute of limitations begins to run on the date the employee gives the employer notice of his or her resignation, not on the date of the employer’s alleged last discriminatory act that drove the employee to resign.

The Court’s decision reversed the Tenth Circuit’s ruling which had upheld the trial court’s dismissal of Mr. Green’s constructive discharge claim on the basis that it was time-barred because he asserted his claim more than 45 days after he entered into a settlement agreement with his employer that gave him the option of either resigning or transferring to another position at a significantly lower salary and nearly 300 miles from where he lived.  The trial court and Tenth Circuit held that the limitations period for a constructive discharge claim begins running on the date the employer takes the “last discriminatory act” that precipitates the employee’s resignation, which in this case was the date the settlement agreement (containing the perceived equally negative ultimatum) was entered into.

By way of background, Marvin Green had worked for the United States Postal Service (U.S.P.S.) for 35 years. The last position held by him prior to his resignation was of postmaster for Englewood, Colorado. In 2008, he applied for, but did not receive, a promotion to the vacant position of postmaster of Boulder, Colorado. Green complained to U.S.P.S. officials that he was denied the promotion because of his race. After filing his complaint, the relationship with his supervisors deteriorated and in 2009, his two supervisors accused him of intentionally delaying the mail, which is a criminal offense. Green’s supervisors told him that the Postal Service’s Office of Inspector General was investigating the charge.  During the investigation, Green was reassigned to off-duty status. On December 16, 2009, Green and the U.S.P.S. entered into an agreement by which the U.S.P.S. agreed not to pursue criminal charges if Green agreed to leave his post in Englewood, Colorado and, effective March 31, 2010, either retire or accept a lower-paying job in another area.  On February 9, 2010, Green elected to resign from the U.S.P.S. and submitted his retirement papers to his employer, effective March 31, 2010. On March 22, 2010, Green contacted the U.S.P.S. EEO counselor to report that he had been constructively discharged.

To bring a constructive discharge claim against the U.S.P.S. for discrimination under Title VII, Mr. Green was required to exhaust administrative remedies prior to filing a suit against his employer.  The Equal Employment Opportunity Commission (EEOC) has promulgated regulations setting out the requirements that must be met by an employee in exhausting administrative remedies.  For federal employees, as is the case with Mr. Green, he was required to “initiate contact with an [EEO] counselor within 45 days of the date of the matter alleged to be discriminatory.”  In the private sector, an employee must file a charge of discrimination with the EEOC within 180 days (or 300 if a state or local agency enforces a law prohibiting employment discrimination under the same basis).

The issue being decided by the Supreme Court was when the 45 day period for Green to initiate contact with an EEO counselor began to run.  The Tenth Circuit held that the limitations period began to run on December 16, 2009, the date the settlement agreement was entered into.  Other circuits have held similarly.  Mr. Green, on the other hand, argued that the limitations period began running at the time he submitted his retirement papers to his employer, which occurred on February 9, 2010. Other circuits, including the Second Circuit (presiding over appeals from the federal district courts in New York, Connecticut, and Vermont) agree with Green’s position as to when the limitations period begins. By the time the case reached the Supreme Court, both Green and U.S.P.S. agreed that the limitations period should begin when the employee gives notice of the intent to resign; however, they disagreed on the date this occurred.  As a result, the Supreme Court appointed an attorney to act as amicus curiae and defend the Tenth Circuit’s position.

The Supreme Court, in an opinion written by Justice Sotomayor, held that the 45-day period for an employee to initiate contact with an EEO counselor begins to run on the date the employee resigns.  In reaching this conclusion, the Court applied the “standard rule” for limitations period, which is that “a limitations period ordinarily begins to run ‘when the plaintiff has a complete and present cause of action.’”  As noted by the Court, a constructive discharge claim is comprised of two elements: (i) discriminatory conduct at such a level that an employee feels compelled to resign AND (ii) the employee actually resigns.  It is not until after an employee resigns that he or she can file suit against an employer.

The Court further supported its decision by noting that neither Title VII nor the regulations promulgated for its implementation require courts to deviate from the standard rule for limitations period when constructive discharge claims are involved.  The Court also pointed to the practical benefits of having the limitations period begin to run at the time an employee resigns, recognizing that it would be illogical to have a limitations period for filing a claim begin to run before an actionable claim even exists, as this would require a plaintiff to undertake a two-step process to preserve a constructive discharge claim.  First, filing a complaint after the employer’s alleged discriminatory conduct, only to then have to amend the complaint or file a second complaint after he or she resigns.

The Court’s decision makes it clear that an employee resigns—triggering the limitations period—at the time notice of the resignation is given to the employer even if the resignation is not effective until a later date.  To illustrate its ruling, the Court used the example of a typical two weeks’ notice given by employees when the resign from a job.  Applying the Court’s ruling, the limitations period begins to run the day the two weeks’ notice is given by the employee, not the last day worked by the employee.  In addition, it is clear from the decision that even though Green v. Brennan involves a public sector regulation, the Court’s interpretation of the limitations period is applicable to a constructive discharge claim brought by a private sector employee.

While the Court’s decision does not make substantive changes to the law applicable to constructive discharge claims, it does provide clarification for both employers and employees on when the limitations period for an employee to exhaust administrative remedies begins to run.  The Court’s ruling will likely have the unintended effect of leading to more constructive discharge claims because of the longer limitations period.  While the Court’s decision does not require employers to make drastic changes to their existing policies, employers should update their recordkeeping policies to ensure that they keep an accurate record of when an employee gives notice of his or her resignation in order to determine whether it has a viable statute of limitations defense if it is ever the subject of a constructive discharge claim.