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NH Supreme Court Holds Constructive Discharge Statute of Limitations Begins to Accrue When Employee Submits Resignation

In a case of first impression, the New Hampshire Supreme Court recently held that the three-year statute of limitations for a constructive discharge cause of action begins to accrue when the employee submits his or her notice of resignation, not when the termination becomes effective.

In Jeffrey v. City of Nashua, 2012 WL 2094404 (N.H. June 12, 2012), Jeffrey submitted her resignation on December 21, 2006.  She indicated that the effective date of her resignation would be December 31, 2006.  On December 29, 2009, three years and eight days after submitting her resignation letter, Jeffrey filed suit against the City alleging constructive discharge and breach of contract.  The City moved for summary judgment on the ground that Jeffrey's claims were barred by the three-year statute of limitations.  After the trial court granted the City's motion, Jeffrey appealed to the New Hampshire Supreme Court.

Jeffrey argued that the Court should adopt a rule that the statute of limitations begins to run on the actual date of termination.  After reviewing and discussing cases from several different jurisdictions, however, the Court held that the date of notice of resignation is the date on which the statute of limitations begins to accrue.  In a constructive discharge case, unlike a wrongful discharge action, the wrongful act occurs when the employer discriminates against an employee and purposefully makes her job conditions so intolerable that a reasonable person would feel compelled to resign.  Only the employee can know when the atmosphere has become so intolerable that she must leave her employment.  Thus, the action accrues when the employee tenders her resignation or retirement notice.  Because Jeffrey did not file suit until more than three years after tendering her resignation, her constructive discharge claim was time-barred.  Additionally, the Court held that her breach of contract claim was also barred under the State's three year statute of limitation because the breach accrued when she submitted her resignation letter.

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