Shareholder Wins Wrongful Discharge Case

An executive and shareholder sued his employer (a family-run business) claiming  constructive discharge and obtained a $436,634.62 judgment  under Puerto Rico’s Wrongful Discharge Act 80. See, Garrote v Airequipo ( KLAN201200956 – Bayamon Court Appeals Panel ).

In Puerto Rico all terminations are presumed unjustified under Act 80. However when a person avers that he/she has been forced to resign, the person must initially show  that  the resignation was in fact  a constructive discharge; that the treatment was so hostile or degrading that no reasonable employee would tolerate continuing in the position. The standard is an objective one: the conditions must be so difficult or unpleasant that a reasonable person in the plaintiff’s shoes would have felt compelled to resign. Marrero v. Goya of Puerto Rico, Inc.,  304 F.3d 7, 28 (1st Cir.2002).  The plaintiff must establish that “working conditions were so unpleasant that staying on the job while seeking redress would have been intolerable.” Marrero, 304 F.3d at 28.

A constructive discharge can arise from  decisions causing a significant change in benefits or reassignments with significantly diminished job responsibilities. Yet, a reduction in responsibility that is not accompanied by a diminution in salary or some other marked lessening of the quality of working conditions, does not constitute a constructive discharge. Suarez v. Pueblo Int’l, Inc.,  229 F.3d 49 (1st Cir. 2000).