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What is ‘continuous for-cause employment’?

On Behalf of | Oct 4, 2014 | Employment Contracts |

A recent Maryland Court of Appeals case asked the court “to re-examine the contours of the firmly established doctrine of at-will employment.” The court was asked to look at a written contract that contained “a for-cause provision but no definite term of employment.”

The court was asked to decide if the document in question was a lifetime contract, an at-will contract or “something else.” The court decided on “something else.”

In doing so, it created a new category of employment in our state now known as “continuous for-cause” employment. The category includes people who have a written contract with no specific end date (making their employment continuous) and who can only be terminated “for cause.”

Causes for termination often include such things as intentional misdeeds by the employee, fraudulent conduct, theft of company property, deliberate breech of company policies and substantial failure to do their job.

A recent National Law Review article urged employers to take a look at the contracts they have with employees to determine if they really want workers in this new category. After all, it might give employees unwanted leverage in disputes over termination and severance agreements.

In the case the Maryland Court of Appeals heard, the former employee received $255,868 after a court ruled that the company had breached the employment contract and wrongfully terminated the employee.

However, the court noted that Maryland’s at-will employment doctrine stands.

If you have questions about a dispute over termination, severance pay, whether or not you are an at-will, continuous for-cause or for-cause employee, discuss your unique circumstances with an employment law attorney.

Source: National Law Review, “Maryland Court of Appeals Holds that Inclusion of Permissive ‘Termination For Cause’ Provisions Negates Presumption of At-Will Employment and Creates ‘Continuous For Cause’ Contract,” Sept. 22, 2014