Definition of some Employment Termination Terms.

Definition of some Employment Termination Terms.

What is a termination for cause provision in an employment agreement


Your question was quite long, and we tried to make it a bit more succinct. There are a number of critical caveats even before getting started. Employment law is a complex matter and the laws differ significantly from state to state. If union or other contractual arrangements are involved, the situation becomes even more complex. If the firm has an employment manual or other formal or even sometime informal arrangements, these may all have an impact on making determinations. For many closely held businesses, shareholder and other agreements also have provisions which affect employment, either directly or indirectly through stock ownership control and buyout provisions which can affect employment. All this needs to be considered and generally should be addressed by an attorney specializing, at a minimum, in business law matters, if not primarily concentrating on employment issues. Many employment agreements address the issue of termination. Perhaps one of the most common ways this is done is by specifying that an employee is "at will". This means that the employee, at least according to the terms of the contract, can be fired at any time. State law and other facts and circumstances could possibly change this result. Some agreements provide for termination by either party upon a specified number of days of prior written notice. In general terms, if the agreement is clear, then either party can give notice in conformity with the specific requirements in the contract and terminate. Another approach in some agreements is to limit an employer's firing for cause prior to the termination date of the employment arrangement (which is often, but not always, specified in terms of a number of years). Termination "for cause" can be quite a difficult matter to define, since it will rely on state law, facts and circumstances, and possibly other provisions of the contract for interpretation. Depending upon the events that occurred, there may or may not be sufficient justification for cause and it is not uncommon for the parties to disagree over whether or not cause has occurred. The matter could end up in negotiations for a severance package, or worse, in litigation,. Some contracts will provide for a specified severance payment in the event of termination. Often, this is even negotiated as part of the provisions for when and how termination can occur. For example, an employee might agree to a five year employment agreement, but termination at any time prior thereto upon the payment of a specified amount of money under a certain formula calculation. Your question also inquired about an "opportunity to cure". An "opportunity to cure" is where the default occurs in a contractual arrangement and the defaulting party is permitted some specified time period to correct the default before the consequences of the default will be triggered. Caution: The above is at most a very general discussion of some of the concepts relating to termination of employment. It is critical that parties all be represented by competent legal counsel with expertise in the laws of their particular state.

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