Most people do not know how to resign properly. The slightest mistake can expose you to a lawsuit or cause the forfeiture of valuable benefits. Some people resign without receiving a firm job offer from a new employer. Later, after learning the new job did not materialize, they are unable to be rehired by their former employer and spend months out of work unnecessarily.
It doesn’t have to happen this way. Problems such as these can be avoided by thinking ahead. A proper resignation occurs when you are able to step into a new job with increased benefits without missing a day’s pay, have no legal exposure, and collect what you are owed from the former employer. Take the following hypothetical for example:
Bari is called into her boss’s office and told that she is being summarily discharged. However, the company states that she can resign by signing a letter of resignation, which it has prepared and presents to her.
Bari thinks it is better to resign than to be fired, so she signs the letter of resignation and leaves the premises. When she files for unemployment benefits, she learns she is not entitled to benefits unless she can prove that she was forced to resign. The company introduces the letter of resignation as evidence that no pressure or undue influence was forced on Bari and it was her voluntary decision; she is denied unemployment insurance benefits.
Bari consults an employment lawyer. She learns that had she not resigned she would have received severance. She also learns that she could have made a deal with her employer (and confirmed it in writing) that although the company would agree to inform prospective employers that she resigned for personal reasons, it would not contest her unemployment benefits or deny paying her other benefits she would have received had she allowed the company to fire her. The lawyer also explained that if she was close to earning a vested pension, profit-sharing benefits, or year-end bonus, her resignation would seriously undermine a claim for those expected benefits.
The golden rule is never to quit a job if you can help it. Refuse an employer’s offer to resign whenever possible. This is because if you resign you may be waiving a claim to unemployment and other severance benefits, including earned commissions. This is a trap many employees fall into.
However, there are occasions when you may receive a better job offer and decide to resign from your current position. Information in this section will tell you how to do so properly to increase the chances that the job at your new employer will not be short-lived. For maximum protection, review and implement the following strategies where possible.
- SIGN A WRITTEN CONTRACT WITH A NEW EMPLOYER BEFORE RESIGNING.A written contract with a definite term of employment (for example, six months or one year) can protect you from situations where the new employer changes its mind and decides not to hire you, or fires you after a short period of time. This often happens with devastating consequences but can be avoided by insisting on a valid agreement with job security before starting work. If the new employer does not agree to this, think twice before jumping ship.
Many clients wish to learn what rights they have after resigning from a job and accepting a position with a new employer. Generally, they forget (or are afraid) to get a firm commitment of job security from a new employer before they resign from a good job. On some occasions, unfortunate workers sell their homes and relocate their family to a distant locale, only to discover they aren’t happy or that the employer is not satisfied with the arrangement shortly after the move is made. They ask if they can sue the new employer for promissory estoppel, misrepresentation, and other related legal causes of action as a result of the new job going sour.
While it is possible to recover money as a result of the new employer’s broken promises, this could have been avoided had they insisted on receiving an employment agreement that contained a definite promise of job security.
Remember, a job is like a romance. Companies woo applicants with promises of fulfillment and riches. Then, when the honeymoon is over, even highly qualified people find themselves being treated unfairly. This is the nature of the working world. Remember this for your own good. Never leave a good job voluntarily without a strong employment agreement from your new employer if you can help it.
- REVIEW YOUR CURRENT CONTRACT OR LETTER OF AGREEMENT. If notice is required to be given, do this so you will not violate the contract’s obligations.
This is an important concern. For example, if your contract requires you to give 30 days’ notice before leaving, you must do so to avoid the company claiming you are in breach of contract. If you do not resign properly, you may be sued for damages. Damages in such cases are typically calculated at the employer’s cost of training a replacement. However, if you resign prematurely at an important time (e.g., during market week if you are a salesperson, or right before a customer is consummating an important deal in which your services are required, but the deal is blown because you leave), the damages could be significant.
There are occasions where an employer will release you from your obligations immediately after you give proper notice. This is because the employer may not want you around for, say, 30 days after it knows you will be leaving. If your contract requires notice, offer it but anticipate, discuss, or seize the opportunity that you may leave suddenly at the employer’s request. If the employer agrees, ask to receive the wages you would have earned during the notice period as part of a severance package. Some employers may be amenable to this.
Finally, since the employer may tell you to get out immediately after you give notice, anticipate this may occur and plan accordingly. Consider removing valuable contents from your office before giving notice, because the employer may tell you to vacate the premises and you won’t have this opportunity later. Get your affairs in order. Select the best time to resign to suit your needs knowing this may occur.
- GIVE NOTICE ONLY WHERE NECESSARY.In many jobs, giving notice is not required or necessary (contrary to the public’s misconception) especially if you are hired at will. However, the employer will usually benefit when you offer notice because it may then have time to seek and train a replacement. It may also give you the opportunity to bargain for additional financial benefits before walking out the door.
Two weeks’ notice is probably more than adequate; avoid giving more notice than necessary. Do not offer notice if you must start a new job immediately and believe this will jeopardize your new position. However, if you are entitled to a large bonus or commission in the near future, postpone resigning until you have received such a benefit.
Many employers often summarily reject an employee’s notice and ask you to leave the minute they are notified of your intentions. The reason is that some employers believe you will copy pertinent documents or cause trouble. Don’t be surprised if this occurs. Anticipate it and plan ahead.
- SHOULD YOU RESIGN BY LETTER?Only when it is used to clarify resignation benefits, request prompt payment of monies previously due, confirm unfair or illegal treatment, or put you on record that the resignation will not be effective until some later date. If these reasons are important, always resign by letter. When you do, keep the letter brief and avoid giving reasons for the resignation without having a lawyer review the letter first. The reason is that the letter may be used as evidence at a later trial or proceeding and can preclude you from offering other reasons for the resignation or tipping your hand in the event of a lawsuit.
The example on page 407 is the kind of resignation letter you may wish to draft. You should deliver it by hand or send it by certified mail, return receipt requested, in order to prove delivery.
- NEVER RESIGN IF GIVEN THE CHOICE.Many employers have written policies that state that no severance or other post-termination benefits will be paid to workers who resign. Additionally, in many states, you are not entitled to unemployment insurance benefits after voluntarily resigning from a job. If you are a commission salesperson, it is often more difficult to argue that you are entitled to commissions due on orders shipped after a resignation (as opposed to after a firing).
STRATEGY: Think twice if the employer gives you the option of resignation or discharge. Talk to a lawyer for advice. It is generally preferable that clients be fired rather than resign, since potential damage claims and severance benefits may remain intact. If you are worried what others may think, you can always negotiate that the employer will tell outsiders that you “resigned for personal reasons” (even if you were fired).
- KEEP QUIET.Tell friends and business associates of your decision to resign after telling your current employer, not before.
- 7. AVOID BAD-MOUTHING.It is not a good idea to tell others about the circumstances surrounding a resignation, particularly if you are leaving on less-than-pleasant terms. Many employers have sued former employees for defamation, product disparagement, and unfair competition on discovering that harmful oral or written comments were made. Additionally, when the statement disparages the quality of a company’s product and at the same time implies that an officer or principal of the employer is dishonest, fraudulent, or incompetent (thus affecting the individual’s personal reputation), a private lawsuit for personal defamation may be brought. Some companies withhold severance pay and other voluntary benefits as a way of getting even. Thus, avoid discussing your employer in a negative way with anyone.
- RETURN COMPANY PROPERTY.Disputes sometimes occur when property belonging to the employer is not returned. You probably must return such property (automobile keys, confidential customer lists, samples, etc) immediately on resignation to avoid claims of conversion, fraud, and breach of contract.
If you return items by mail, get a receipt to prove delivery. A few states permit you to retain company property as a lien in the event you are owed money that the employer refuses to pay. However, since many states do not recognize this, speak to an employment attorney before taking such action.
Sample Letter of Resignation
Name of Officer
Name of Employer
Re: My Resignation
Dear (Name of Officer):
Please be advised that I am resigning from my job as (title) effective (date).
As of this date, I believe that (describe what salary, commissions, other
benefits) are due and I look forward to discussing my termination benefits with
I shall be returning all property belonging to the company (specify) by
(date) and will be available to assist you in a smooth transition if requested.
Thank you for your attention to these matters.
Very truly yours,
Sent certified mail, return receipt requested