How to resign without getting the shaft from a spiteful employer?
September 10, 2010 12:13 AM   Subscribe

Two-parter: Can an employer arbitrarily cut off your medical benefits at the time you give them notice, even if you are still working full time for the duration of the customary two weeks following your resignation notice? Also, a question about unemployment eligibility after the jump...

Part one: I want to time my resignation so that my medical/dental coverage will continue at least through the month of October, but my work environment is so toxic that I can't wait to get out of there.

My employer is a medium-large size company (west coast), and I'm scared that they might screw me over just out of spite, unless state law dictates that I'm entitled to my benefits for the actual duration of my employment—including the two weeks following my notice. I would suppose this is not a common occurrence, but am wondering if any employers have been known to get back at an ex-employee by cutting off their benefits before the individual has actually separated from the company.

Part two: Can anyone give a real-life example (you or someone you know) who successfully received unemployment benefits after "voluntarily" resigning a job? It's in quotes because although the choice to resign is mine, the nasty, hostile environment is way beyond what any honest and valued employee should be expected to endure on a daily basis. How much weight will the EDD give to my explanation that quitting was the only way to salvage/preserve my emotional wellbeing? In case you're wondering, there is no sexual harassment or bodily threat involved, but the psychological abuse is going on almost a year now.
posted by petitemom to Work & Money (16 answers total) 1 user marked this as a favorite
First I wouldn't worry about a mid-to-large corporation screwing you out of spite on health benefits. This is far to regulated a field to start screwing with people when they quit.

The times I've quit I've had benefits extend through the month which contains my last day (When I left my last job with a large corp I left on the 3rd of the month for exactly this reason). You also must be offered COBRA benefits if the company has more then 20 employees.
posted by bitdamaged at 12:22 AM on September 10, 2010

Call your insurance carrier and ask them; they'll know the law. Every time I've ever quit or been laid off, my benefits lasted through the end of the month of my last day.
posted by goblinbox at 12:32 AM on September 10, 2010

...although the choice to resign is mine, the nasty, hostile environment is way beyond what any honest and valued employee should be expected to endure on a daily basis.

It might be possible to sue the company for creating a hostile work environment, but I don't believe you'll be able to get unemployment if you quit of your own accord. Often a company will create a hostile environment for exactly that purpose (trying to get an employee to resign so they don't have to pay unemployment benefits).
posted by Menthol at 1:52 AM on September 10, 2010

It might be different on the west coast than in Texas, but here if you file for unemployment and the former employer disagrees that you qualify, the board has a hearing. You show up in person or via teleconference, and so does your manager or another representative of the company, and each state your case. If this sounds intimidating, it's something you should keep in mind.
posted by Houstonian at 2:23 AM on September 10, 2010

Best answer: Assuming medium-large is big enough to be covered by COBRA, they cannot terminate your medical insurance coverage because you resign. In California, they probably cannot terminate your benefits for other state law reasons, although I'm not well-informed on California law. The unemployment benefits question is more ambiguous -- it is possible that your situation would qualify as constructive discharge depending on the specifics of your situation. California is more generous in that than other states, but it is a gray area. It might be worth spending a consultation fee with an employment attorney to get advice on how likely you would be to prevail. I suggest using to find one in your area.

If you want anecdotes, I know of several people whose former employers didn't bother to show up for the unemployment hearing and who received benefits with far weaker claims that yours. I also know someone who had nearly your exact fact pattern and was treated poorly at the hearing and had her benefits rejected. She went to an employment attorney after her claim was rejected, which was the wrong sequence of events to follow.
posted by Lame_username at 3:04 AM on September 10, 2010 [1 favorite]

Your second question cries out for local legal advice. Every state is different. In my state, I have never heard of the unemployment agency accepting a constructive discharge argument.
posted by megatherium at 3:59 AM on September 10, 2010 [1 favorite]

If you think there may be a hearing, you will probably want some evidence. So start thinking now about documentation of events at your workplace. Unless of course you've already been documenting dates/times of hostile incidents which caused you to come to this conclusion a year later.
posted by CathyG at 5:10 AM on September 10, 2010

As to termination of your benefits, it's not so much what the law says regarding your benefits but what the employer's benefit plan document says. I can't think of anything, for example, that would prevent an employer from writing the eligibility rules of the health plan to specify that benefits end the day an employee gives notice (though I have never once seen this and doubt insurers or plan administrators would allow it because of the administrative annoyance).

Many companies continue benefits until the end of the month of your termination, some terminate the day of your termination. It's up to the employer - but if it's written one way in the plan, the employer has to follow those rules. Call the HR person, look it up in your health plan policy book or call the number on the back of your health plan card and ask.

And, again, it sounds like your employer would be subject to COBRA (though it's likely a big cost hike).
posted by Pax at 6:52 AM on September 10, 2010

Just a note that it is not required that the Company continue your benefits through the end of the month in which you leave the company. That is a policy decision. Also, others have mentioned COBRA, which, yes, you'll be eligible for, however if the COBRA coverage is not subsidized you'll be paying the FULL cost of your benefit coverages (i.e. prob much higher than your active rate).

With all that said, IANAL, but there are strict restrictions set under section 125 of the IRS code. If your employer has a cafeteria benefits plan, then I do not believe they can terminate your active coverage upon giving notice. The active coverage would continue through your last day of employment or through the end of the month, or some other date (depending on policy).
posted by Jego at 6:55 AM on September 10, 2010

Best answer: If your dental insurance carrier is different from your medical insurance, you may have a problem. When I was laid off last year, my medical benefits extended to the end of the month, but dental benefits stopped on the last day of employment.
posted by raisingsand at 7:45 AM on September 10, 2010

IANYL, and I don't know what jurisdiction you're in, but lots of people continue to get unemployment benefits after they quit, as long as they are forced to quit for the right reasons. No guarantees, though, EDD can be very hit or miss. Like megatherium said, it's not the best argument (but also not necessarily impossible), and if you really want to know, contact a lawyer.
posted by jabberjaw at 8:06 AM on September 10, 2010

So, I'm thinking that if you say at the end of September that you want your last day to be in October, two weeks away, and your employer says, "no thanks, clear out today" as is very common, you probably won't get October. If your state is at will then you are essentially let go at that time. I would think an employment lawyer would know the answer to this quickest. You could probably do a consultation about your situation fairly cheaply.

If you want October and don't want a lawyer, I'd wait to quit until October. Get your dental work done now! When I got laid off, I called up my dentist the next day and asked them to find me a slot for a cleaning if possible. Got my teeth cleaned two days later.
posted by amanda at 8:20 AM on September 10, 2010 [2 favorites]

The information about unemployment can be found here on the EDD website.
posted by Zophi at 8:37 AM on September 10, 2010

That EDD language is big enough to drive a truck through. It does sound, though, as if the cost of legal representation for an unemployment claim might be outside the scope of what you can afford (since you are concerned about 2 weeks of medical/dental coverage).

Anecdata from Michigan: Mrs. Bubba got unemployment from a job she quit b/c the boss was abusive toward the office help. However, this was well known and she wasn't the first to have quit to preserve sanity. Claim went in her favor.

Anecdata from California: Son of Bubba got let go from abusive employer who routinely fights unemployment claims. Had the teleconference with EDD & employer and did not get benefits.

If this environment has been going on for over a year now, do you know or can you find former employees who can tell you whether the company fights UE claims? Some companies figure it's the cost of doing business--others fight every claim, even ones they know they'll lose. To stay in practice? In the hope that it will deter people from quitting or filing UE claims? Who knows.

If you can get a cheap consult with a UE compensation specialist (there's probably somebody at Legal Aid whose been through this), it will be worth your investment in peace of mind.
posted by beelzbubba at 10:00 AM on September 10, 2010

Best answer: I got unemployment after quitting a job about 10 years ago. My immediate boss was both extremely abusive (screaming at me at the top of his lungs in front of the entire staff) and requiring me to do something which would have been legally actionable (civil law, not criminal), which was why I chose to quit.

I think the legally actionable part was what got me the unemployment. The EDD rep who interviewed me over the phone very clearly led me to phrasing that used the word "immoral" instead of "unethical." I also know (from a friend who still worked there) that my boss could have contested my claim and made it worse for me, but was talked out of it by higher ups in the company, so I got a bit lucky there.

The point that might be germane to you is that the EDD rep zeroed in on that one aspect of my complaint and adjusted my phrasing to help me get the best result. I have no idea if you have any specific complaints about your abuse which might fall into the "immoral" category, but there might be something there.

For the record, there was no sexual harassment aspect of my complaint, just garden variety abusiveness and a request to do something which could have gotten me personally sued.
posted by ljshapiro at 11:00 AM on September 10, 2010

Response by poster: Thanks everyone. I really appreciate your thoughts and welcome any more comments/advice you may have...
posted by petitemom at 7:04 PM on September 10, 2010

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