Wrongful Resignation Proves Costly

Date: 2006
Author: Daniel A. Lublin
Publication: Metro

Have you ever heard of a wrongful resignation? Corey Snider hadn’t — and it cost him to the tune of $10,000.

Discontent with criticisms over his work performance, sales representative, Snider decided to take a long walk – He walked right out of the office and never came back. Snider handed in his resignation letter a few days later, thinking he was doing the company a favour by making it official. However, Snider got sued; and at that point, doing favours for the company was the last thing on his mind.

The chances of employers suing ex-employees for not providing enough resignation notice are obscure. But the consequences, however, can be severe. Once thought to be a remote law suit, a few such cases have found their way to the courts in recent years and awakened the prospects of companies looking to recover damages caused by an employee who departs without giving a sufficient warning or even a good bye.

When speaking about obligations imposed at the time of a termination, it’s usually in the context of companies providing employees with advanced notice. However, the law also obliges employees who are considering abandoning ship for greener pastures to give a heads up on the way out the door.

In Snider’s case, his employer was left reeling when he fled a few weeks before an important trade show. The employer sued Snider for wrongful resignation – and it won. The court said that Snider was required to provide sufficient time for his employer to find an adequate replacement. By failing to give them advanced notice, the company suffered losses that were attributable to Snider’s departure.

So what is the proper measure to calculate an employee’s duty to give notice? There is no simple answer and similar to a company’s reciprocal obligation, the proper amount is an art, not a science.

Reasonable notice of a resignation depends upon the circumstances of the relationship and the impact the resignation could have on the employer. The employee’s duty to give notice is intended to give the employer enough time to find a replacement and arrange its affairs. For instance, in the case of an entry level employee, notice could be as little as a few days or even a few hours. At the opposite end of the spectrum, though, a key employee or fiduciary may be required to give several months’ notice and assist in the transition process during that time.

So if you are thinking about resigning, here are three legal principles to keep your career on track – and you out of the courtroom:

  • If you possess specialized skills or are contemplating leaving the employer in a vulnerable situation, your duty to give advanced notice is heightened.
  • In assessing your obligation, consider the labour market and the ability of your employer to replace you. Easy come means easy go. The opposite is also true.
  • You may have a contractual duty to give advanced notice. You must review your employment agreement(s) to determine if any specific period was agreed to and if so, you should follow it.

It’s always good practice to err on the side of caution. By doing so, you can avoid an irate ex-employer making you the next example of a wrongful resignation.

CATEGORIES Resignation

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