The Vermont Supreme Court has provided some much needed clarity on what an employer is required to show to support the termination of an employee with whom it has an implied employment contract. Implied employment contracts are typically created where an employer provides progressive discipline to its employees (even though the employer may have robust disclaimers in its handbook and policies stating that its employees are at-will). The Court held that simply modifying an employee’s at-will status does not, on its own, automatically import the “just cause” standard into the employment contract.
The Court recognized that some of its prior decisions had “created confusion,” through its “sloppy word choices” when it jumped between “cause,” “good cause,” and “just cause” in its decisions. Its decision makes clear that these three terms are synonymous in the implied employment contract context and the “just cause” standard applicable to the termination of state employees, pursuant to a collective bargaining agreement, should not be arbitrarily inserted into an implied employment contract.
Thus, if an employer chooses to give its employees a measure of job security−in return for the higher morale of a secure workforce−by setting up standards governing grounds for termination, Vermont’s courts should not interfere with that choice by inserting the “just cause” standard into the contract. Instead, the terms of an implied employment contract will be determined by what an employer has agreed to provide, through its policies, practices and procedures, to employees.
Straw v. Visiting Nurse Association, 2013 VT 102