Can I Sue a Company if I Quit?
Quitting your job doesn't prevent you from filing a lawsuit against your employer but you must have legal grounds to sue. Just because your boss was unpleasant doesn't mean you have a case.
But if you quit because you were subjected to unlawful conduct (e.g., you were illegally discriminated against, had to deal with sexual harassment, or were forced to put up with intolerable working conditions), you have a good-faith basis for a lawsuit and can sue.
But make sure you follow any company policies relating to employee complaints (which may include, for example, notifying your HR department). Give your boss a chance to fix the problem before you quit. You have a better chance of winning.
Most States Have At Will Employment
State law varies, but in most places, unless you have an employment contract that says otherwise, your employment is what is called "at-will." Simply put, that means that your boss can fire you for a good reason (e.g., you're cruel to your co-workers) or for no reason (e.g., your boss doesn't like your shoes). They just can't fire you for a bad — that is, unlawful — reason. That gives rise to a wrongful termination claim.
For the employee, the upside of at-will employment is that you can quit for a good reason (e.g., your boss is a jerk) or for no reason at all. If you don't have an employment contract, you can just resign — no breach of contract.
Contrary to custom, you do not have to give two weeks' notice. Some may view it as unprofessional, but you can just quit.
When Can't I Sue My Former Employer?
Unless you quit for particular reasons, which we discuss below, you have no legal basis for suing your employer. And if you quit, you make it harder (but not necessarily impossible), to get unemployment benefits. So you want to think carefully about your options before you quit. Consider consulting with an employment lawyer.
When Can a Former Employee Sue Their Former Employer?
Say you don't get fired. Say your boss makes you miserable, the working conditions intolerable to anyone in their right mind, and you're essentially forced to quit. Say a co-worker sexually harasses you and even though you tell human resources, they do nothing about it.
Essentially you are forced to submit your resignation. You ask yourself: I quit my job — can I still sue my employer?
Suing for "Constructive Discharge"
Don't worry. You may be able to still sue. One situation, which we discuss in detail elsewhere, is what is called a "constructive discharge."
Essentially, a court will overlook that the employee voluntarily quit and treat the resignation as a firing; in other words, a wrongful termination.
So if the employer's conduct is unlawful (or constitutes a breach of contract), the employee may have a claim for wrongful termination/constructive discharge even if they quit.
Although the law varies from state-to-state, you generally need to be able to establish the following for a constructive discharge claim:
- Working conditions were so intolerable that any reasonable employee would be forced to quit
- The employer knew about the problems in the working environment (or caused them) and allowed them to continue.
There are limits on how long you have to bring a wrongful termination claim. In some states you only have a year. So don't delay.
Suing for Illegal Discrimination
One reason for quitting can be illegal discrimination. Although you may have a claim under state law (and state laws vary to some extent), you may be able to sue for illegal discrimination under federal labor laws. Even if you quit.
Broadly speaking, federal law bars employers from discriminating against employees who fall within what is called a protected class.
Those protected classes include, among others:
- Sex (including gender, pregnancy, sexual orientation, and gender identity)
- National origin
Suing Under Title VII of the Civil Rights Act of 1964
If you want to file a discrimination claim under certain particular laws, such as Title VII of the Civil Rights Act of 1964, there may be special procedures you have to follow.
Under Title VII, you must first file what's called a charge with the Equal Employment Opportunity Commission (EEOC). The EEOC investigates the charge, after which it sends you Notice of Right to Sue. Only then you can sue.
But there are strict time limits. You must file your charge with the EEOC within 180 days of the discriminatory conduct (this is extended to 300 days if the state you're in also bars discrimination on the same ground), then you must sue within 90 days of receiving the Notice of Right to Sue. Otherwise, you're barred.
You don't have to have a lawyer to file an EEOC charge, but you may want to consult one about your legal rights nonetheless. The laws that govern these claims can be complicated and you do not want to make a mistake.
Give Your Employer the Chance To Fix the Problem
Sometimes the employer is the actual problem. You may get demoted because of your race. You may be denied a promotion because of your gender or gender identity. If that happens, proving discrimination is pretty straightforward. But it's harder to prove if co-workers are harassing you.
If you want to sue your former boss, it's generally a good idea to work through whatever company policy there is on discrimination/harassment before you quit. Notify human resources of what you are dealing with. Give them the chance to correct the problem. At the very least, make sure you tell your supervisor, and consider kicking your complaint up the food chain if they don't or can't help.
When Employers Are Not Liable in Constructive Discharge Cases
The reason is that your boss may have a defense to your post-employment lawsuit.
Under case law, an employer may not be liable in certain constructive discharge cases if they show:
- The company itself took no negative action against you
- The company took reasonable care to prevent and correct the bad behavior (such as having company anti-discrimination/anti-harassment policies, training, etc.)
- You unreasonably failed to take advantage of preventative or corrective opportunities (such as failing to follow procedures for raising complaints under a company anti-discrimination/anti-harassment policy)
Is It Worth It To Sue Your Employer?
There is nothing illegal about suing your employer, but it may or may not make sense in some situations. There are upsides and downsides.
The major upside is that you may be able to recover damages. Generally speaking, and depending on the circumstances, you may be able to recover, among other items:
- Lost past wages
- Lost benefits
- Lost future wages for as long as the job would reasonably continue (but you do have to try to find another job instead)
- In some cases, money for emotional distress and damage to your reputation
- Punitive damages designed to punish your employer for particularly bad conduct
Some employment cases are particularly lucrative, and that may be attractive to you.
Downsides To Suing Your Employer
The downside is that suing your employer may hurt your chances with future employers. It's not supposed to. In fact, the EEOC has taken the position that refusing to hire someone because they sued their former boss is a form of illegal retaliation.
But virtually every future employer asks you about prior employment when you apply for a job. Some will flat-out ask if you have ever sued your boss before even though it could be considered a violation of federal law. This is because few, if any, will outright admit that they rejected your job application because you had sued. Retaliation can be hard to prove.
It comes down to a judgment call. All the more reason to consult an attorney when deciding whether the costs of suing outweigh the benefits. If you do end up deciding to sue, you will want to make sure you have the evidence. Try to get as much of it as you can before you quit. It's harder (but not impossible) to get evidence after you quit.
If You Want To Sue Your Boss, Consult With an Employment Attorney Before You Quit
There are times when people quit their jobs and go on to greener pastures with nary a care. But there are times when an employer or your co-workers make life so difficult that you are forced to quit. Just because you quit doesn't necessarily mean that you lose any chance to sue.
But before you quit, consider getting legal advice from an employment attorney. You will want to know your legal rights. And act quickly, because the time in which to bring your lawsuit is limited.