Do You Know the Seven Factors That Comprise "Just Cause"?

20 May 2013 Labor & Employment Law Perspectives Blog

The “just cause” standard has long been a cornerstone of traditional labor law (under many collective bargaining agreements, employees generally cannot be discharged except with “just cause”). However, the standard also has important implications outside of unionized environments that might warrant consideration even with disciplinary decisions affecting at-will employees.

As for application to traditional labor environments, Professor Carol Daugherty developed in 1966 a seven-part “just cause” analysis. The seven factors are the following:

  1. The employee knew of the company’s policy
  2. The company’s policy was reasonable
  3. The company investigated to determine that the employee violated the policy
  4. The investigation was fair and objective
  5. Substantial evidence existed of the employee’s violation of the policy
  6. The company’s policy was consistently applied
  7. The discipline was reasonable and proportional (the punishment fit the crime)

Labor arbitrators still largely apply this analysis today. If a company cannot meet these factors, a union’s grievance will have a greater chance of being sustained.

But wait. If employment outside of the union context is usually on an “at-will” basis, then isn’t this the opposite of “just cause?” Doesn’t this mean that employment can be terminated for a good reason, a bad reason, or no reason at all, regardless of fairness principles? Not necessarily. For example, state and federal anti-discrimination laws are one enormous exception to the “at-will” doctrine. (Even an “at-will” employee may not be terminated for an illegal reason.) Thus, if an employee in a protected category was treated unfairly under any element of Professor Daugherty’s seven-factor test, then the employee will have better chances of showing that the reason for the unfair treatment must have been based (impermissibly) upon the protected category. For example, if a company terminates an older employee but the investigation was not fair, or the company’s discipline was not consistently applied, or the discipline was not proportional to the violation, then there’s more explaining to do.
The company’s defense becomes more difficult, more expensive, and more vulnerable.

To protect against these risks, company leadership and human resources professionals would do well to take a page from Professor Daugherty and think through internally the seven factors which have come to define the “just cause” standard when it comes to a disciplinary or termination decision. However, where employees are at-will, there is no need, nor generally good reason, to include “cause” or “just cause” language in written employment materials, such as offer letters. Instead, simply thinking through the seven factors in connection with disciplinary decisions may often place employers in a stronger position to justify disciplinary and termination decisions.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights