Many employees in the United States are at-will employees. This means they do not have an employment contract, so they have an agreement to work at the business as long as they want to. But their employer can also fire them at any time and for almost any reason, as long as the reason itself is not illegal, such as discrimination.
But workers with employment contracts may have more protections. For instance, the contract could state that someone can only be fired for cause. How does this change the responsibility of the business owner?
Demonstrating a clear reason
It essentially means that the employer cannot simply fire the employee without a reason, as they could for an at-will employee. They have to provide a clear reason that justifies the termination.
There are a wide variety of potential reasons that could be used. Perhaps the employee gets into conflict with other workers or even with clients and customers. Maybe this makes the business owner think that the employee does not represent the company well, so they want to fire the employee to protect the business’s reputation.
In other cases, the employee may have done something that directly harmed the company. Examples include misconduct, the disclosure of confidential information or actively committing fraud. All of these could be used as just cause in a termination case.
How it complicates the process
Employment contracts can change the termination process significantly, potentially making it more complicated. Business owners may have an obligation to demonstrate why they are firing the employee and that they are doing so properly, which would not exist for at-will employees.
For both employees and employers going through this situation, it is important to understand exactly what legal steps to take and what rights each side has.