Whether you're entering into a new employment agreement or reviewing an existing one, it's crucial to comprehend how your rights are affected by the circumstances of your termination. Most commonly, employment contracts distinguish between terminations 'for cause' and those without cause, each carrying distinct implications. If you have a contract for a specified amount of time, the difference will be whether you need to be paid through the end of your contract if you are terminated. The most important other implications of 'for cause' vs. without cause termination involve eligibility for company severance benefits, enforceability of an non-compete restrictions you may have, and treatment of unvested equity interests. The contractual definition of 'cause' should have no effect on unemployment eligibility.
For more information about termination provisions in employment agreements, visit us at Employment Termination Provisions.