Quitting a Higher-Paying Job Before Getting Fired Does Not Lead to Voluntary Underemployment in Murfreesboro, TN Child Support Case: Smith v. Smith

Facts: After the parties’ divorced, Mother was ordered to pay child support.

A few years later, Mother petitioned to modify her child-support obligation, alleging that her income had substantially decreased while Father’s income had substantially increased.

The proof at trial showed Mother had been unable to meet her employer’s performance goals. Sensing that she was about to be fired, she resigned her $19-an-hour job in order to receive a positive referral. After applying for several jobs, Mother took a full-time job paying $12 an hour.

The trial court found that while Mother voluntarily left her job before she was about to be fired, she was not voluntarily underemployed. Despite this finding, the trial court averaged the income from Mother’s last five jobs to establish her earning capacity for child support purposes.

Father appealed.

On Appeal: The Court of Appeals affirmed in part and reversed in part.

Voluntary Underemployment. In determining whether a party is willfully and voluntarily underemployed, the trial court must consider the party’s past and present employment and whether the party’s choice to accept a lower paying job was reasonable and made in good faith. When a party with child-support obligations voluntarily leaves their employment and chooses to accept a job that provides significantly less income, however, courts are inclined to find willful and voluntary underemployment. Additionally, when a party testifies that they have the ability to earn a greater income, courts have determined that constitutes evidence of willful underemployment.

The court affirmed that Mother quitting her higher-paying job did not render her voluntarily underemployed:

This is not a case where an employee with a well-paying job decided they would rather pursue another career even though it would bring in significantly less income. Whether [Mother] preemptively quit in order to salvage her paid time off and insurance or waited until she was fired, the fact is that she was no longer going to be employed in that position earning $19 per hour. Simply, she did not voluntarily give up that income. . . . Ultimately, a trial court must decide whether the party’s choice to accept a lower paying job was reasonable and made in good faith. In this case, the circuit court determined that [Mother’s] choice was a reasonable one and that she was not voluntarily underemployed. Having reviewed the record, we cannot say that the evidence preponderates against the circuit court’s finding that [Mother] was not voluntarily underemployed.

Imputed Income. Tennessee’s Child Support Guidelines require trial courts to determine the parties’ income by their gross incomes unless additional income should be imputed when a parent has been determined to be voluntarily unemployed or underemployed or when there is no reliable evidence of income.

Because mother was not found to be voluntarily underemployed, the trial court’s imputation of income was reversed:

Here, the court found that [Mother] was not voluntarily underemployed and made no finding with respect to the reliability of the evidence of [Mother’s] income. However, even if the court had found no reliable evidence of [Mother’s] income, the Child Support Guidelines then set a precise dollar amount that should be imputed in those cases, which was not done here. According to the Child Support Guidelines, a trial court only considers a party’s past and present employment when determining the amount of income to impute to a party found to be voluntarily underemployed.

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According to the guidelines, . . . the court should have used [Mother’s] current pay rate to determine her income for the purposes of her child support obligation.

The case was remanded to the trial court to set child support based on Mother’s actual income.

Smith v. Smith (Tennessee Court of Appeals, Middle Section, May 24, 2016).

Information provided by K.O. Herston: Knoxville, Tennessee Divorce and Family Law Attorney.

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K.O. Herston is a family-law attorney in Knoxville, Tennessee whose practice is devoted exclusively to family law, including divorce, child custody, child support, alimony, prenuptial agreements, and other aspects of family law.

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