Courts Weigh in on Constructive Discharge Case

October 02, 2024

Important Takeaways: Courts will consider all of the circumstances when determining if an employee was constructively discharged. It is important for employees to be fully aware of all their options when they are being asked to resign.

Facts: In July 2021, Erin Kosch filed a lawsuit against Traverse City Area Public Schools (the District). Kosch alleged constructive discharge from her teaching position she held for 27 years with the District. Kosch alleged that in October 2020 she was inadvertently broadcast to a student on an audiovisual classroom feed of her remote-teaching software, a brief conversation with her husband about another student. She intended for this conversation to be private.

The conversation subsequently made it to social media and was viewed widely in the community. The District started investigating this matter, but Kosch resigned shortly after the investigation began. After her resignation, Kosch filed her lawsuit.

In her lawsuit, Kosch indicated that her issues with the District started several years earlier with a long-running dispute with another teacher, Joyce Battle. Battle had children attending the District and was notoriously difficult to work with.

During COVID, classes in the District were virtual. During one of her classes, Bosch observed a student, M.B., making inappropriate and homophobic remarks in the chat bar of one of the online classrooms. Kosch later spoke with the assistant principal about the student’s behavior.

In October 2020, one of Kosch’s students, L.H., signed on early to class. The student said she said hello but received no response and muted herself. The student then heard Kosch make a remark about “little assholes” and started recording with her phone. The conversation was about the incident with M.B. and historical problems with Battle. In the conversation, Kosch said that someone should “shut her shit down” and referred to M.B. as Battle’s “fucking little kid.”

The video began circulating in the community and Battle sent it to the administration to complain. Kosch was then suspended with pay pending the outcome of the investigation into the video.

A “due process meeting” was arranged for October 27, 2020, and Kosch was told she could have a union representative at this meeting. Kosch was not opposed to having a union representative at this meeting, but was fearful they would not stand for her interests as she was a non-dues-paying member. Kosch wanted a lawyer at the meeting and the H.R. Director, Ms. Berck, refused this request. Ms. McBride, the union representative was present at the meeting. At the meeting, Berck informed Kosch that she was being investigated for potential FERPA and policy violations. Berck’s notes for the meeting reflect that two options for Kosch were discussed, she could resign and receive insurance through January or a recommendation that tenure charges be filed with the Board of Education for violating FERPA and District policies. If Kosch chose the latter option, her name would be made public in a public board meeting. Kosch chose to resign because she understood that option to mean she was resigning in good standing with the possibility of getting other work to let her complete 30 years of service. Kosch felt that she had no other option but to resign and that this was the only option that protected her pension.

In her lawsuit, Kosch alleged that she was constructively discharged, meaning she had no choice but to resign, because the District unlawfully used the recording of her, the District refused to let her have her attorney at the meeting, the union representative was against her interests, the District lied to her about whether her statements violated FERPA, and she would not have been terminated in the ordinary course of proceedings because she had an excellent record. Kosch said she did not have to exhaust her administrative remedies because it would be futile since she was not a member of the union and was asking for damages their grievance process could not provide.

The Court explained that in order to determine if there was a due process violation, the Court will look at (1) whether a liberty or property interest exists with which the state has interfered, and (2) whether the procedures attendant upon the deprivation were constitutionally sufficient. This means that the Court will look at whether the person had a property interest in their job and whether they were given proper process before that interest was taken away. The Court explained that the essential requirements of due process are notice and an opportunity to respond. If an employee voluntarily relinquishes a property interest, no procedural due process violation has occurred, unless the relinquishment was involuntary.

The Court held there are two circumstances in which an employee’s resignation or retirement will be deemed involuntary. When the employer forces the resignation by coercion or duress or when the employer obtains the resignation by deceiving or misrepresenting a material fact to the employee. The Court held that Kosch’s resignation was voluntary. The Court held that the District never told Kosch she had violated FERPA, just that they were investigating a potential FERPA violation. The Court also held that Kosch not being allowed to have legal counsel during the meeting was a non-issue because she could have contacted counsel for advice otherwise. The Court also held that just because Kosch faced a difficult choice regarding her pension, that does not mean she was forced to resign.

The Court also held that Kosch failed to exhaust her administrative remedies. The test the Court used is whether union officials are so hostile to the employee that he could not hope to obtain a fair hearing on the claim, whether the internal union appeals procedures would be inadequate to reactivate the grievance or award the full relief sought, and whether exhaustion of internal procedures would unreasonably delay the employee’s opportunity to obtain a judicial hearing on the merits of his claim. The union representative in this case testified she would represent all teachers, regardless of whether they were dues-paying members. The union did not fail to represent Kosch, the grievance process could award her remedies sought regarding tenure and benefits, and it would not have unreasonably delayed her.

What this means: In Montana, constructive discharge occurs when the employee is forced to voluntarily resign because of a situation created by an act or omission of the employer, which an objective, reasonable person would find so intolerable that voluntary termination is the only reasonable alternative. This is analyzed considering a totality of the circumstances. When giving an employee the option to resign, employers should ensure that the employee is aware of all other options and understands them fully.

Kosch v. Traverse City Area Public Schools, Michigan Court of Appeals, August 22, 2024. Read it here.

Please reach out to Bea, Megan, Beth, Kevin, or Kali with any questions.