Resign in Lieu of Termination?

January 25, 2015 by Julie A. Uebler, Esq.

I was called into my supervisor’s office, and told that I was being let go for alleged performance issues, including the recent loss of one of my key clients. My supervisor said she would tell people I left voluntarily if I wanted to resign in lieu of termination. What should I do?

The question of whether your separation from employment is characterized as voluntary or involuntary can have significant implications in the short and long term.In some ways, the option your supervisor gave you is a Catch-22, leaving you to decide whether you would rather be free to advise a future employer that you have never been fired, or be eligible for unemployment compensation benefits.

Generally speaking, if you are involuntarily terminated from employment, you will be eligible for unemployment compensation benefits in Pennsylvania as long as you did not engage in “willful misconduct.” The Pennsylvania Department of Labor & Industry will not consider “unsatisfactory work performance” to be willful misconduct if you were working to the best of your ability. If you take your supervisor up on her offer and resign, however, you would typically not be eligible for unemployment compensation benefits. On the other hand, most employers will conduct a background check to determine whether you have ever been terminated from a prior position.None of us wants to explain being fired to a future employer.

To weigh these competing concerns, you might want to ask your supervisor why she has offered you the option to resign. If the employer plans to contest your application for unemployment compensation if you agree to resign, and you will need to rely on that income stream while you transition to new employment, you will likely want to decline her offer. This is particularly true if the employer has a “neutral reference policy,” which will decrease the risk that your former employer tells a future employer that your termination was involuntary. Basically, a “neutral reference” is one that confirms your dates of employment and last position held, but does not identify whether your termination was voluntary or involuntary. If the supervisor is offering to characterize your departure to the rest of the company and future employers as voluntary as a courtesy to you, and will not contest unemployment, resigning may be your best option. If that happens, see if the employer is willing to confirm its agreement not to contest unemployment compensation in writing, even if it is in an e-mail.

Julie A. Uebler, Partner | Employment Law