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Terminating an employee who has an employment contract

If a New Jersey employee is performing poorly or causing problems in the workplace, the employer may want to let that individual go. However, if the employee in question has an employment contract, this may complicate matters because there may be legal protections that prevent a termination except in certain defined circumstances, which are often referred to as good cause.

Having good cause to terminate employees generally means that they are being let go for purely business purposes. Good cause usually includes termination for low productivity or poor performance, endangering coworkers or disrupting the workplace, the commission of illegal acts, threats of violence, violation of workplace rules and habitual tardiness or absences.

It should be noted that both written and verbal contracts may be considered valid by the court, so saying that someone can only be terminated for poor performance during a job interview or during a performance review may be sufficient to give them contractual protections. An employee may also gain contractual protection if there is an implied contract, such as if an employee handbook states that reasons for termination are limited, but implied contracts do not often hold up in court.

Employment disputes can cause a variety of problems for an organization, especially if the employee is performing poorly or reducing the profitability of a company. It may be possible to avoid legal action brought by a fired employee by ensuring that the contract is understood in advance and that the termination is handled in an appropriate manner. A lawyer can provide assistance in these matters by explaining what an employment contract covers and what the obligations of the employer are.

Source: FindLaw, “Employment Contract Law – Firing an Employee with a Contract”, accessed on Jan. 27, 2015

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