Be Careful Not to Assume That an Inquiry About Severance Is a Resignation

This was the lesson from a recent case, in which the U.S. Court of Appeals for the First Circuit found that the employer’s mistaken assumption resulted in a wrongful termination.

In Forsythe v. Wayfair, Inc., the employee complained of sexual harassment by a coworker and retaliation by her manager, which a human resources representative investigated and deemed to be unsubstantiated. She then told the HR representative that she was interested in having the company put together a “compelling severance package.” The company responded that it accepted her resignation and provided a severance agreement. The employee sued, alleging in part that she had been involuntarily terminated.

The First Circuit found that a request for a severance package is not necessarily a voluntary offer to resign. The employee stated that she intended to evaluate any proposed package with her attorney, and certainly never stated that she was resigning. The employer’s decision to treat her inquiry as a resignation was therefore a termination against her wishes.

So, while it might seem logical to an employer that an employee would only ask about severance if they did not wish to continue working for the company, it is important not to assume that such a request is necessarily a resignation.