Show navigation

Risky Business: Giving Employees the Option of Resignation Instead of Discharge Can Be Dangerous

» Articles » Employment & Labor Articles » Article

December 11, 2006
Author: David Ball
Organization: Holme Roberts & Owen LLP


Employers often give employees the option of resigning instead of being discharged and often fail to appreciate the dangers of this approach. The fact that forcing a resignation is actually the legal equivalent of a discharge is not known to all employers. A resignation also gives the employee a potential retaliation claim after refusing to sign a legal release and being fired. A claim can be made that the firing occurred because the employee refused to give up federal civil rights. Also, offering employees a choice to resign frequently leads to shortcuts, because the employer incorrectly believes that if the employee resigns, the employer doesn't have to comply with its polices or otherwise support a discharge.

That is what happened in a recent federal court of appeals decision that resulted in an employer win on every point except a breach of contact claim for failure to follow its own policies and procedures on discharges. McWilliams v. Jefferson County, C.A. No. 05- 1081, 2006 U.S. App. LEXIS 22656 (10th Cir. September 6, 2006).

When Jefferson County decided to terminate Christie McWilliams for falsifying her time sheets, the county gave her two options: discharge – following county policy – or resignation by signing a release of all claims and earning a two-month severance package. After taking the severance and signing a release, McWilliams sued the County for breach of its discharge procedures.

Jefferson County argued that the release negated McWilliams’ claim. McWilliams countered that the release was invalid because it was the product of a forced resignation – made under the duress of being fired. The court agreed with McWilliams and sent her case to the federal district court for a trial to determine whether Jefferson County failed to provide McWilliams with the procedural protections stated in its discharge policies.

There is no safe shortcut. According to jury verdict statistics kept by HRO’s employment practice group, failure to follow personnel policies to the letter is by far the most common reason why employers lose employment cases in court. For example, employers lose about 62% of all cases claiming breach of contract for failing to follow policies, as compared to less than 30% of racial discrimination cases. So an employer is twice as likely to lose a case claiming failure to follow personnel polices than a racial discrimination case. This shows that employer personnel polices are extremely dangerous documents that need to be very carefully drafted to make them flexible and easy to follow.

Continue reading below

FREE Employment & Labor Training from Lorman

Lorman has over 32 years of professional training experience.
Join us for a special report and level up your Employment & Labor knowledge!

Employee Discipline and Termination
Presented by Crystal L. Norbeck

Learn More

Contact HRO’s employment practice group for guidance in reviewing or developing personnel procedures that minimize legal exposure.


The material appearing in this web site is for informational purposes only and is not legal advice. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. The information provided herein is intended only as general information which may or may not reflect the most current developments. Although these materials may be prepared by professionals, they should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.

The opinions or viewpoints expressed herein do not necessarily reflect those of Lorman Education Services. All materials and content were prepared by persons and/or entities other than Lorman Education Services, and said other persons and/or entities are solely responsible for their content.

Any links to other web sites are not intended to be referrals or endorsements of these sites. The links provided are maintained by the respective organizations, and they are solely responsible for the content of their own sites.