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September 28, 2017Download PDF

Check your employment contract!

If your employment contract contains a “for cause” or “good cause” termination clause, you should be aware of your legal rights prior to, during, and following your period of employment. You may possess inextinguishable legal rights and should seek counsel accordingly, as you may not be considered an “at-will” employee.

First, it is important to note that the terms “for cause” termination and “good cause” termination are used synonymously. (See Greenwood v. State Police Training Center, 127 N.J. 500, 509–10 (1992)).

The New Jersey Supreme Court set forth the standard for determining whether an employee has been terminated for “good cause” in Greenwood. The Supreme Court announced that “courts ordinarily uphold findings of good cause [1] when the employee’s performance is deficient or [2] when the employee creates a risk of harm to himself or herself or others. An employer must present substantial objective evidence to meet the good-cause standard.”

In Greenwood, the defendant New Jersey State Police terminated plaintiff from his position as a sheriff officer after disqualifying him from its training program due to his vision impairment, despite his stellar performance in the training program up to that point. The decision was based on the supervisor’s subjective belief that the plaintiff’s injury presented a risk to plaintiff’s own safety if he were to continue with training.

On appeal, the New Jersey Supreme Court concluded that such an “apprehension about the possible consequences of an injury to [plaintiff]” did not constitute “good cause” for his dismissal because the termination was not made (1) because of the employee’s deficient performance or (2) because of a risk of harm to himself or to others. “As long as [plaintiff’s] visual limitation does not significantly interfere with his ability to complete the program or significantly increase the risk that he will be injured or will injure others, dismissal from the program is unjustified.” Here, the State Police failed to set forth substantial objective evidence that the plaintiff presented a danger to himself, and therefore, the State Police lacked “good cause” to terminate him.

As a practical matter, courts also tend to rely upon the definition of “good cause” or “for cause” termination as set forth in the individual employee contract or in an employee manual. Thus, in Jackson v. Georgia-Pacific Corp., 296 N.J. Super. 1, 15 (App. Div. 1996), the court relied on the company’s employee manual, and in Ricci v. Corporate Express of the East, Inc., 344 N.J. Super. 39, 43 (App. Div. 2001), the court deferred to the company’s contract with the employee.

Even so, in determining whether to uphold an alleged “for cause” termination, courts will ultimately weigh the facts against the Greenwood standard. In Ricci, the plaintiff was terminated after he wrote letters to his superiors criticizing the management practices of his direct supervisor. The court examined the plaintiff’s employment contract, which defined “for cause” termination as “termination because of . . . a willful act of misconduct that is injurious to the Company.” The defendants argued that plaintiff’s conduct fell into such a category of “misconduct.” Even though the defendant categorized the activity under its broad definition of “misconduct,” the court ultimately weighed the facts against the “good cause” standard set forth in Greenwood, concluding that defendants’ actions did not fall into either category of termination for “good cause” as set forth in Greenwod.

As further noted in Greenwood:

Courts have found good cause for termination in cases in which the discharge is prompted by a legitimate business concern, or in which an employee does not perform the job safely or effectively. Conversely, courts have noted that termination would be arbitrary or unreasonable and thus not for good cause if the asserted ground was irrelevant to job performance.
Consequently, “for cause” termination is a vital issue employees in New Jersey must be cognizant of in order to avail themselves of their legal rights. A breach of contract lawsuit may be appropriate for violation of these aforementioned standards, depending upon the unique facts and circumstances presented. A number of common law remedies may be available, along with statutory violations in some cases. Therefore, legal counsel should be retained in the event of such an unlawful termination.