When a worker has a contract, it gives them protections that go beyond the at-will employment laws. Under these at-will laws, most employees can be fired at any time, with or without a reason to do so, as long as the reason isn’t illegal. But contract employees are no longer at-will employees, and they have to be fired in accordance with the terms of their contract.
Many times, this means that the company can only fire someone for cause. They have to have a good reason to do so, and firing an employee without such a reason can be a violation of their rights. It could cause them significant financial harm in the short term, as they lose the benefits of the contract, and it could also damage their reputation and their ability to get a similar job in the future. It’s very important for both employees and employers to understand how this works.
But what is cause?
One of the biggest questions that may come up after a firing is what type of cause can be used. The employer can’t just have any reason. It has to be a valid reason that shows that the firing is actually warranted under the terms of that contract. Examples include the following:
- Breach of contract
- Breach of company policies
- Violating an ethics policy
- Violating a code of conduct
- Falsifying records
- Embezzling money
- Stealing assets or property
- Threatening a customer or a colleague
- Extreme insubordination
- Harassment of other workers or customers
- Failing drug tests
- Using computers in an unauthorized manner
- Being convicted of a serious crime
- Being under the influence at work
- Lying on a job application
In many cases, some of these issues will be outlined in the contract itself so that the employee knows what to expect. They should have a full understanding of what types of issues can lead to their termination.
Even so, a lot of conflicts can arise. An employee may claim that there actually was not cause for the firing. They may claim they didn’t do what they’re being accused of doing, or that the company is just looking for an excuse to let them go. Even when they did something on the list, they may claim they were never informed of it before and didn’t know that it was a breach of their contract. There are a lot of different complications, and that’s why it’s so important for all involved to understand the legal process.