Termination for cause is a serious business decision. Employers and employees have many reasons for parting ways, but employment termination for cause is not a desirable outcome—for either the employer or the employee. Termination for cause generally occurs when an employee makes a severe error in actions or judgment.
Termination for cause occurs when an employee's actions in the workplace, interactions with their coworkers, interaction with their manager, or ways in which they treat a customer or vendor are so egregious that they require employment termination—sometimes immediately.
Reasons an Employee Is Terminated for Cause
When an employee's employment is terminated for cause, the employment is terminated for a reason which is given to the employee and stated in the termination letter.
Termination for a cause can occur for any actions that an employer considers to be grave misconduct. Examples of such situations include these:
- Violation of the company code of conduct or ethics policy
- Failure to follow company policy
- Breach of contract
- Violence or threatened violence
- Threats or threatening behavior to a colleague or customer
- Stealing company money or property
- Falsifying records
- Extreme insubordination
- Failing alcohol or drug test
- A conviction for some crimes
- Watching pornography online
- Providing false information on a job application
These are not the only reasons why an employer might fire an employee for cause. Every time employers think they've seen every possible reason to terminate an employee for cause, an employee proves them wrong. So, an exhaustive list is impossible.
If you plan to terminate an employee for cause, you may wish to talk with your attorney about any extraordinary circumstances or situations.
Immediate Effects of Termination for Cause
Termination for cause is usually immediate when an employer has gathered the needed documentation and evidence. The termination meeting is held with the employee, the employee's manager or supervisor, and a Human Resources representative.
If an employment relationship is terminated for cause, the employer will likely not have to pay unemployment compensation. You may want to check with the Department of Labor in your state to understand the rules that will govern your relationship with your employees.
Also, an employer that is terminating an employee for a cause is discouraged from paying any severance. This sends a double message that will confuse the departing employee, confuse a jury in a later lawsuit, and set a bad precedent for the employer.
Example of Termination for Cause
A man brought what employees believed to be a firearm hidden in a brown paper bag to his workplace. He brandished the gun around the coworkers before locking the gun in his locker. They reported their concerns to their manager and to the human resources staff.
The company had a zero-tolerance policy for weapons in the workplace, a policy that had been well-vetted by an employment law attorney for their state. The gun was also on the company-owned property and the coworkers had felt threatened by the man's actions. HR called the police who removed the man and the gun. The man with the gun was ultimately charged with illegally possessing a weapon. He was fired from his job for this cause.
Another Termination for Cause Example
An employee was sought out at a trade show booth by two potential customers who asked for him by name and referred to him as a company vice president. The problem comes because the man was a company manager who was using the title of VP to appear more important than he actually was. When the company learned about his mascarade following the show, he was immediately fired for presenting himself as an officer of the company when he was not.
A Third Example of Firing for Cause
The company IT department noticed that a young employee had totally reconfigured his cubicle and made his computer screen unviewable by any employee passing by his desk. They wondered why he had made the change and checked out his computer.
They found that he was sitting in his cubicle watching pornography all day long instead of working. He was dismissed. The funny part and so indicative of his youth? He called his HR director the morning after his termination to ask for help in updating his resume.
The Bottom Line
Hopefully, these three examples help you to more completely understand the concept of termination for cause. It occurs rarely but regularly when employees exhibit egregious behavior.
The information contained in this article is not legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current legal advice, please consult with an accountant or an attorney.