What is the Difference Between Termination With Cause and Termination Without Cause?

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Employees always question what it means to be Terminated With
Cause versus Terminated Without Cause. The quick response, is that a
Termination With Cause generally means that an employee engaged in some kind of
misconduct whereas a Termination Without Cause is based upon a decision of the
employer to end the employee’s employment.

Terminations With Cause generally occur in some of the following situations, including
among others:

  • violations of company policy
  • insubordination
  • fraud
  • embezzlement
  • conviction of a crime
  • violence or threated violence at work
  • falsifying records

At times, Company’s try to claim that performance can be a reason
for a Termination with Cause. However, poor performance or not meeting
expectations is not necessarily Cause (i.e. gross misconduct) as defined above,
but can be used to deny an employee benefits or severance that the employee may
be entitled to receive had the employee been terminated without cause.
Sometimes, employees who are about to be Terminated With Cause may be given the
option to resign from the job.

Termination with Cause has substantial ramifications and could
result in an employee losing stock options, equity, deferred compensation,
severance, bonuses, unemployment benefits, etc.

Termination Without Cause is how most employees are terminated, as most employees are at-will
employees. Examples of
Termination Without Cause are layoffs, reductions in force, job eliminations,
downsizing, etc. Terminations Without Cause generally afford employees with all
the benefits an employer has promised through contracts and policies. Many
employees Terminated Without Cause also receive severance benefits.

Regardless of whether an employee is Terminated With Cause or
Terminated Without Cause the employee is still obligated to adhere to
contracted restrictions on the employee’s future employment, including, Non-Compete
Agreements, Non-Solicitation Agreements, Workplace Invention Agreements,
Confidentiality Agreements, etc.

Understanding what you may be entitled to
receive when you are terminated may be confusing. Click
here to schedule a time to
speak with Sheree Donath to discuss your employment situation and to obtain
guidance on your specific situation or if you believe you may be terminated
soon.