When one hears the terms “just cause provision” or “wrongful termination,” the natural reaction is to associate these terms with protecting employees from being unfairly fired, harassed with unwarranted discipline, or discriminated against by their employers. This is a rather narrow view however, of the true effect of these types of provisions.
A just cause provision is a contract clause which is frequently included in employment contracts. Typically, for an employee to be terminated, or in some cases disciplined, a just cause provision requires that the employer supply a legitimate reason related to that employee’s work.
Although it may seem counter-intuitive, a just cause provision can provide an employer with just as much insulation from unwanted problems as it does employees.
For example, after it was found that a former head basketball coach at a small college verbally abused his players, assistant coaches, and employees, the institution terminated the coach’s contract. As it relates to employment law, such abuse would surely qualify as “just cause.” At the time of termination, the coach had three years left on his contract and was reportedly going to be paid nearly $1.2 million. Unfortunately, the coach’s contract failed to include a “for cause” termination clause that would have allowed the college to terminate him for this type of behavior. As such, when the coach threatened a wrongful termination and breach of contract lawsuit, the college was forced to pay a sizable settlement.
Indeed, when an employee with a multi-year contract is terminated with no just cause provision, the employer may be liable for a “wrongful termination” and the the remaining term of the contract.
As such, if found in a situation like this, it is critical that you seek expert counsel.
Call Gilbert Law Group today: 631.630.0100