What Is Termination for Cause?

Businessperson leaving office with box of personal items after being terminated for cause.
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When an employee is terminated for cause, they are fired from their job for a specific reason and are not always provided with advance notice or compensation.

What Is Termination for Cause?

Reasons an employee could be terminated for cause include, but are not limited to, stealing, lying, failing a drug or alcohol test, falsifying records, embezzlement, insubordination, fraud, felonious conduct, disclosing private, confidential information or trade secrets, deliberately violating company policy or rules, and other serious misconduct related to your employment.

When you are terminated for cause, the employer does not have to give you notice. The only time an employer is required to give notice in the case of mass layoffs, or large plant or corporate closures per the Worker Adjustment and Retraining Notification (WARN) Act. Otherwise, federal law assumes the default employment in the U.S., known as at-will employment.

Most U.S. workers are employed “at will.” At-will employment gives the employer and employee the flexibility to terminate the relationships at any time for nearly any reason, so long as they are not discriminatory reasons such as race, gender, sexual orientation, etc. As a result, there is no federal law forcing an employer to give any sort of notice when terminating an employee.

Conviction of a crime or breach of a contract you have with your employer may also be grounds for termination for cause.

Even if you’re terminated for cause, you may be entitled to severance pay or other compensation according to your employment contract or company policy. Don’t count on it, but don’t assume anything until you ask, either. Some employers prefer to give severance or even treat dismissals as layoffs, rather than deal with the difficulties that arise from terminating for cause.  

What Is Wrongful Termination?

Wrongful termination, also known as wrongful dismissal, is when an employee’s employment contract has been terminated for reasons that are illegal or breach the terms of their contract. Some examples of wrongful termination include discrimination, retaliation, refusal to commit or perform an illegal act, or breaching the contract or company handbook.

If you feel that your termination was unfair or have not been treated according to the law or company policy, you can get assistance. You may be able to appeal the decision to terminate your employment. The U.S. Department of Labor has information on each law that regulates employment and advice on where and how to file a claim. Your state labor department may also be able to assist, depending on state law and the circumstances.

Also, local bar associations often have a referral service and may even have a hotline you can call to find an employment lawyer to handle a wrongful termination case. Keep in mind that you will need to pay for an attorney's services or find one willing to provide counsel pro bono.

Termination for Cause and Unemployment

When you are terminated for cause, you may not be eligible for unemployment compensation.

Variances in state laws and the gravity of the offense will play a part in unemployment benefits eligibility. If you are not sure whether you're eligible for unemployment, check with your state unemployment office to determine your eligibility for unemployment compensation. If your claim is denied, you will be able to appeal and explain the circumstances of your termination.

However, don’t assume that because you were terminated for cause, you’ll be ineligible for unemployment. You won’t know until you ask.

Have a Question?

Even if you saw the termination coming, losing your job often comes as a shock. You may find yourself with a million questions, and no clear idea of where to get answers. If you’re wondering about eligibility for unemployment, employee rights after termination, or what happens to your retirement and health benefits when you’re terminated, this is the place to start.

Beyond that, your former employer’s HR department can be of assistance with many of your concerns – even though they’re no longer representing you, they are charged with making sure that former employees have all the information they need. You may also contact your state unemployment office or state department of labor for specific information about unemployment benefits. 

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.