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‘Voluntary’ Resignation Supports Discrimination, Retaliation Claims

The Tenth U.S. Circuit Court of Appeals recently overturned a trial court’s dismissal of a case without trial. The case was filed by a female manager in Colorado who claimed she was discriminated against after being forced to choose between moving to California as a part-time customer service representative or “voluntarily” resigning.

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Facts
Mary Barone began working for United Airlines, Inc., in February 1995. She was promoted in October 2005 to manager of business administration for the airline’s Denver station, where she was supervised by Todd Sprague. Her duties included conducting investigations to correct pay and other systematic problems and developing reports concerning those problems.

Throughout her time in that position, she discovered a number of pay problems that she believed showed gender discrimination, including improperly paying certain male managers shift differential and vacation pay. She also claimed that only men in her job group and higher groups received superior evaluation scores.

Barone brought these issues to Sprague’s attention. She testified that he told her to “look the other way” and “throw . . . away” or “delete” investigations. She also testified that at one point, after she asked why a newly promoted manager received a larger raise with his promotion than she did, Sprague said the difference was “[b]ecause he’s a man.”

Barone also testified that Sprague was “demeaning” and would “talk down” to female employees. Additionally, she stated that despite giving her a “successful” evaluation and praising her in writing and in front of others, he continued to criticize her in person and tell her she was “not doing anything right.”

Finally, in a meeting on August 17, 2006, Sprague gave Barone two options: move to Orange County as a part-time customer service agent or resign from the company. She submitted her resignation, and although she later requested reinstatement, United denied the request.

Barone filed suit in the U.S. District Court for the District of Colorado, asserting violations of the Age Discrimination in Employment Act (ADEA) and Title VII of the Civil Rights Act of 1964 as well as state-law claims charging that United had discriminated against her on the basis of age and sex and had retaliated against her for her investigations into discriminatory pay practices.

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District court’s decision
Generally speaking, to prove discrimination, an employee must show that the employer took some adverse action against her that constituted illegal discrimination. The action might be a demotion, the creation of a hostile work environment, or a termination, but in general, an employee who simply quits or retires can’t claim that the employer took an “adverse action” against her.

She can, however, claim that she was “constructively discharged,” which means the employer “deliberately makes or allows the employee’s working conditions to become so intolerable that the employee has no other choice but to quit.”

In this case, the district court found that:

  1. because she resigned as a full-time management employee, Barone couldn’t establish that United had taken an adverse action against her;
  2. the fact that her own testimony described her options as a “choice” and she later asked to be reinstated meant she voluntarily chose to resign and her working conditions hadn’t become so intolerable that she was forced to quit; and
  3. United hadn’t retaliated against her for her investigations.

Based on those findings, the district court dismissed her case without trial.

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Appeals court’s decision
The Tenth Circuit disagreed with the district court on all three points. Importantly, the court found that the “choice” Sprague offered to Barone wasn’t meaningful and that “[w]hichever option Barone chose, it would significantly, and immediately alter her compensation, terms, conditions, [and] privileges of employment.”

The court dismissed United’s argument that Barone could have taken the “third option,” which was to refuse to either resign or transfer and wait until Sprague actually took (as opposed to threatened to take) adverse action against her. “[I]t is clear,” the court said, “that Barone’s demotion and transfer . . . was not a mere threat but a final decision of her employer, to take effect immediately should Barone refuse to resign.”

The court also found that presenting Barone with that “choice” was enough to make her workplace intolerable and force her to quit and that her testimony was enough to find that United had retaliated against her for investigating its pay policies.

Because the court found that Barone had successfully passed the “first stage” of proving her discrimination claim, it overturned the district court’s dismissal. However, since United still might be able to prove that it had effectively fired her for some legitimate nondiscriminatory reason, the court reinstated the lawsuit and sent the case back to the district court for further proceedings. Barone v. United Airlines, Inc ., 2009 U.S. App. LEXIS 26524 (10th Cir., 2009) (nonprecedential).

Bottom line
This case is significant in that it might be read as signaling a shift by the Tenth Circuit toward a more lenient standard for establishing the “adverse action” necessary for discrimination claims and for establishing constructive discharge. The decision makes it clear that just because an employee technically resigns doesn’t mean the courts won’t look further into whether that resignation was actually forced by the employer.

A “choice” between two highly undesirable options, especially when the employee has a successful performance record, may be deemed an “adverse action.” And even if not, presenting an employee with such a choice might be found to create a work environment so intolerable the employee is forced to quit and is thereby “constructively discharged.” Up until now, the Tenth Circuit standard for establishing constructive discharge has been considered one of the most demanding among the federal appellate courts.