Just Cause Termination: More than “Just ‘Cause” They Don’t Like You

If you signed an employment contract, there’s probably a provision in the contract that governs the terms by which the contract can be terminated by your employer or by you. Often, termination of an employment contract can be immediate if done so “for cause” or “for just cause,” or a party may opt to terminate the agreement without cause with an appropriate amount of advance notice.

Most public employees may only be terminated for cause, meaning that the employer must articulate some reason for the termination that does not violate law or public policy. For example, stealing from one’s employer would constitute just cause. So would failure to perform the essential functions of one’s job with or without reasonable accommodation. The doctrine of at-will employment applies by default to most private employees in North Carolina, meaning that the employer can terminate an employee for any reason or no reason at all (as long as the reason doesn’t violate a specific law or public policy.)

Employment contracts (agreements for a certain length of time) override the presumption of at-will employment in North Carolina. That means that the terms of the agreement are controlling to define the rights of the employer and employee for the duration of the contract’s term.

The North Carolina Court of Appeals grappled with the issue of “just cause” in private employment contracts in the case of Meehan v. Am. Media Int’l, LLC, 214 N.C. App. 245 (N.C. Ct. App. 2011). The court looked to the unambiguous language of an express employment agreement to determine what constituted just cause for the employer to terminate the contract. It found that the question of just cause is a question of law and not of fact. If the facts establish that the employee engaged in a certain act or omission, and that act or omission was unambiguously set out in the contract as being just cause for termination, then the court must rule as a matter of law for the employer.

The Court of Appeals asserted in Meehan that to show just cause, Defendants must prove one of the following: (1) Employee failed to fulfill one or more of the explicit terms of his employment agreement; (2) Employee failed to serve his employer faithfully and diligently; or (3) Employee failed to perform all the duties incident to his employment with that degree of diligence, care, and attention which an ordinary person would exercise under the same or similar circumstances.  Refusal to engage in conduct that would violate the law or public policy, engaging in conduct specifically protected by state or federal law, and membership in a protected class may never constitute just cause for termination.

The question of fact is whether the employee in fact committed an act or omission that the employment agreement plainly states is a cause for summary termination. For example, if the contract states that alcohol consumption that interferes with the ability to perform job functions constitutes just cause for termination, a trier of fact would first have to determine whether the employee’s alcohol consumption interfered with his ability to perform his job. If so determined by the trier of fact, the court would rule as a matter of law that the employer had just cause to terminate the employee.

If you have an employment contract, you must look to the express terms of the agreement to determine your rights. If you need help analyzing or understanding an employment contract before or after you sign one, contact an employment attorney who can advise you of your rights and options under the terms of your contract.

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