Commentary

Termination of Employment

Grounds for Termination

May an employer dismiss an employee for any reason or must there be ‘cause’?  How is cause defined under the applicable statute or regulation?

Unless the employer contractually agrees otherwise (either in an individual employment or a collectively bargained agreement), most employment in the United States is ‘at will,’ meaning that it is not for any specific period of time, and the employer and employee each have the legal right to terminate the employment relationship at any time, with or without advance notice or procedures and with or without any particular cause or reason.  However, employers cannot terminate even at-will employees for a reason that is unlawful under federal, state or local law.

Advance notice of dismissal or pay in lieu of such notice is not required by any federal, state or local law, unless the termination of employment is owing to a mass lay-off or plant closing as those terms are specifically defined under the Worker Adjustment and Retraining Notification Act (the WARN Act) or any counterpart state law applicable to the employer.  However, an employer may contractually agree to provide employees with advance notice of dismissal or pay in lieu of advance notice.

No federal, state or local law establishes a right to severance pay upon termination of employment.  Whether to provide severance pay and, if so, in what amount, are determinations made by the employer.  Unless the employer has contractually agreed to such procedures, there is no other requirement.  Virginia requires that terminated employees be provided information relating to their medical insurance benefits and eligibility for unemployment compensation insurance benefits.

Employee Protections

An employee may be protected from dismissal if the employer has entered into an individual employment agreement that requires that certain reasons exist or certain procedures be followed, including due process procedures, before terminating the employment relationship.  Even if an employee is employed at will and typically is not protected from dismissal, various federal and state laws provide the employee with the right to file a claim for damages with a government agency or a federal or state court if the reason for the dismissal is an unlawful reason.  When such a claim is filed, the employee typically sues the former employer for the economic damages resulting from the unlawful termination (typically, past and future earnings and value of lost benefits).  Depending on the type of claim, a former employee may also sue the former employer for additional monetary damages:

  • to compensate the former employee for emotional pain and suffering caused by the unlawful termination;
  • to recover the attorneys’ fees and costs of suit the employee incurred in prosecuting his or her claim;
  • to punish the employer for its conduct; or
  • to recover penalties that may be authorized by a specific statute under which a claim is brought.

Under certain claims, the former employee may request reinstatement of employment and implementation of remedial measures.