Termination for Cause - Definition, Examples

What is termination for cause? Termination for cause is the act of dismissing an employee for a reason that is acceptable to the employer. Employees can be terminated for a variety of reasons, including misbehavior, fraud, or the leaking of private information. The term 'cause' refers to the reason for termination of employment, which is often specified in a written document such as an employment contract or corporate policy.

What is termination for cause?

Employers can terminate an employee's employment in a variety of ways. These include dismissal for cause, dismissal without cause, and dismissal at will. Termination for reason occurs when an employee's activities violate business policy and have the potential to have significant consequences for the company, its clients, and other employees.

Employee services can be terminated for a reason if an employee violates the company's code of conduct or demonstrates consistent poor performance. Additional factors include bad working relationships with coworkers and bosses, as well as poor customer care.

When an employee is terminated for cause, the reason for the termination should be mentioned plainly in their termination letter. If an employee is discharged without a valid reason, the discharge is deemed to be without cause.

What's termination without cause?

The term "termination without cause" is self-contradictory, as service terminations are always for a reason. These can arise when a business does not reach its budget allotment for all workers when it restructures its operations, or when it downsizes.

When an employee is dismissed for cause, the employer has the right to withhold some benefits. Additionally, the employer is not required to provide any notice or compensation in the event of termination. When an employee is terminated without reason, common practices include providing a time period for termination or compensating the employee with a sum of money corresponding with the time frame. Severance compensation is also available to employees who are terminated without cause, depending on the company's policies.

What's at-will termination?

Apart from termination for cause and without cause, the employer can terminate at his or her discretion. Certain businesses sign into an "at-will agreement" with their workers, which specifies that the employer can terminate the employee at any time and without cause. Before accepting work, thoroughly study the employment contract to understand your rights and obligations and to prevent the shock of at-will termination. However, some states have prohibited at-will employment in order to safeguard employees from unfair labor practices.

Put simply, the employer can terminate the employment relationship at the will of either party. Usually, following federal law and state law with reasonable notice.

What are the main reasons that lead to termination for cause?

The following are the primary reasons an employer can terminate an employee's employment without cause:

Misconduct

This is intentional, improper behavior on the part of an employee that is inappropriate for the workplace and poses a serious risk to the individual or perhaps the organization's reputation. The majority of businesses have a well-defined code of conduct that is made available to each employee upon hire. Additionally, the policy details the penalties for violating the code of behavior. Dismissal from employment is the most often used disciplinary punishment for misbehavior. There are several types of workplace misbehavior, which are mostly defined in the company's human resources policy document.

Theft of the company

This is one of the most prevalent types of employee misbehavior. Occasionally, workers will violate their employer's code of conduct and steal from them. Theft occurs when an employee removes something from an institution that does not belong to them. Additionally, theft can occur in a variety of ways, including the use of corporate resources for personal benefit, performing non-company-related work while on duty, and unauthorized use of company patents, trademarks, or logos.

Inappropriate relationships

Workplace interactions should be completely professional in nature in order to protect the company's integrity and the well-being of all employees. A love connection in the workplace might constitute sexual harassment and jeopardize the company's reputation. Additionally, the individuals engaged can discriminate against other employees and prefer the one with whom they are emotionally connected, resulting in workplace conflicts.

Confidentiality

Each company contains sensitive data that should be safeguarded by all workers. Employees should be cautioned about the dangers of disclosing such information and the ramifications of their conduct. It is critical that businesses do not disclose their clients' information to outside parties. Employees in a facility such as a hospital, for example, are entrusted with the responsibility of securing patient information. A breach of such obligation on the side of the employee is referred to as misconduct.

Insubordination

Certain workplace behaviors can appear fun, but if repeated, they might result in insubordination. Workers extending the leave at their own will, skipping work schedules without contact, speaking harshly to superiors, neglecting to deliver information to a senior upon request, and insulting other employees are all examples of such behaviors.

Alcohol/drug-related misconduct

Numerous businesses have a zero-tolerance policy regarding drinking and drugs. Drugs can impair a person's judgment, affecting their employment or putting clients at risk. When an employee fails a drug and alcohol test, they can be terminated for reason.

Felony conviction

When an employee commits a crime and is subsequently prosecuted, the employer-employee relationship can suffer. If the employer has made it plain in the written agreement that criminal convictions would result in dismissal, the employee can be promptly fired.

Breach of safety

A person who recklessly endangers himself, others, or the company is subject to termination for cause. Consider a situation in which a school bus driver disregards a red traffic signal, endangering the lives of children. Even if the driver is fortunate enough to avoid punishment, he can be sacked for endangering himself and the children.

Incompetence

Each business has its own set of objectives and targets that employees must meet. Incompetence is exhibited when an employee consistently fails to fulfill established goals, maintains apathy, or makes no attempt to improve their performance. Cases in which an employee consistently disregards warnings and fails to fulfill standards can result in termination with cause.

Bankruptcy

Certain employers urge their workers to manage their finances responsibly in order to prevent bankruptcy, particularly if the person works with the company's finances. If an employee is discovered to be bankrupt, the employer can have legal grounds to fire the employee for reason in accordance with company policy.

Bribery

Receiving or giving a bribe in return for a service or a product is a crime. Generally, businesses have an integrity policy to which all employees must comply. If one person violates the policy and receives presents in any form from a customer, their actions will significantly harm the company's reputation and constitute a conflict of interest. This is an adequate justification for termination without reason.

How to explain termination during the interview process

It might be tough to explain why you were let go from your job. The following are some suggestions for explaining termination to a prospective employer:

Be truthful

When it comes to explaining why you left your prior employment, candor is the best policy. Many companies can call past employers before hiring, so it is prudent to be candid wherever feasible.

Be objective

An interviewee should make every effort to remain emotionally detached from the termination. It is critical to remain objective about the dismissal and avoid becoming overly remorseful. Being candid without blaming or being offended demonstrates that you've matured and are capable of being professional in the future.

Save the termination details

If no reference to termination is made at the first stage of the recruiting process, the applicant is not required to divulge the information. If requested, an explanation of the events leading up to dismissal can be made at a one-on-one interview.

Demonstrate that you have learned from the experience

When discussing termination throughout the recruiting process, it's a good idea to convey what you've learned. If you were terminated for violating business policy, you might state that you now realize the implications of your conduct and adhere to all company regulations.

Keep details private

If you are suing a former employer, the contents of the case must be kept secret and should not be discussed with other parties, including a future employer during a job interview. Even if you believe your firing violated business policy or employment regulations, this sort of communication with a prospective employer should be avoided.

Common questions

Common questions about termination for cause.

What is wrongful termination?

When an employee is fired illegally, this is referred to as wrongful termination. This occurs when an employee is terminated as a result of workplace discrimination when a company breaches public policy in terminating the employee, or when a company's own termination rules are not followed.

What is willful misconduct?

Willful misconduct is the deliberate violation of reasonable and responsible standards of performance or right behavior under the contract with knowledge that it is likely to result in injury to any person or people or loss or damage to property.

What is involuntary termination?

When an employee is let go due to a business decision that is beyond their control, this is referred to as an involuntary termination. For instance, the company can be facing financial difficulties, prompting them to host a layoff event.

What's severance pay?

Employees frequently receive severance compensation upon termination of employment. Typically, it is determined by the duration of service for which an employee is eligible at the time of termination. Severance compensation is not required by the Fair Labor Standards Act (FLSA). Employers and employees (or the employee's agent) must agree on severance compensation.