Discharge for cause: Overview, definition, and example
What is discharge for cause?
Discharge for cause refers to the termination of an employee’s employment due to a specific, justifiable reason related to their behavior, performance, or actions that violate company policies or employment agreements. In contrast to other types of termination, such as layoffs, discharge for cause typically occurs when the employee’s conduct or performance is deemed unacceptable by the employer. This can include things like misconduct, failure to meet job requirements, or a breach of trust.
For example, an employee might be discharged for cause if they repeatedly fail to meet performance targets, violate the company’s code of conduct, or engage in unethical behavior.
Why is discharge for cause important?
Discharge for cause is important because it helps maintain discipline, protect the business, and ensure that all employees are held accountable for their actions. It provides businesses with a clear framework for terminating employees who are not performing according to expectations or who are engaged in behavior harmful to the company. For businesses, a properly executed discharge for cause protects the organization from potential legal claims, as long as the cause is justifiable and documented.
For SMBs, understanding how and when to implement discharge for cause is critical for ensuring fair treatment of employees and managing company culture effectively.
Understanding discharge for cause through an example
Imagine your business has an employee who has been repeatedly absent without notice and has failed to meet job expectations despite multiple warnings and opportunities for improvement. After giving the employee several chances to correct their behavior, you decide to terminate their employment for cause. This is a justified termination because the employee’s actions have violated the company’s attendance policy and performance standards.
In another example, an employee is caught stealing company property. This is a clear case of discharge for cause because the employee’s actions are a serious violation of company policies, and immediate termination is warranted.
An example of discharge for cause in action
Here’s how discharge for cause might be referenced in an employment contract or company policy:
“Employees may be discharged for cause if they fail to meet performance expectations, violate company policies, or engage in misconduct. Examples of cause for discharge include repeated tardiness, insubordination, theft, or unethical behavior. In such cases, the employee will not be entitled to severance pay or other benefits.”
Conclusion
Discharge for cause refers to the termination of an employee for specific reasons related to misconduct or poor performance. For SMBs, understanding the criteria for discharge for cause ensures that employees are held accountable for their actions while maintaining fairness and transparency in the workplace. It also helps protect the business from potential legal challenges by providing a clear and justifiable reason for the termination.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.