Employee was owed severance payment after firing “with cause”

An employment agreement may help to define the rights and obligations of an employer and an employee, including what rights the employee may have in the event of the termination of employment. Such a contract may also contain provisions for severance pay, which should be honored by the employer.

The Wisconsin Court of Appeals discussed a situation in which the employer did not comply

with such a termination clause in the recent case of Ashker v. Aurora Medical Group, Inc.

An employment agreement . . . and a termination

The employee was a radiologist employed by a medical group. The two parties had signed an employment agreement at the time the employee was hired.

While working at the center, the employee allegedly had misdiagnosed a patient’s x-ray image. Following the incident, a number of medical center employees alleged that the employee had asked about how to delete certain images from the patient’s medical file. The medical center’s management committee voted to discharge the employee “for cause,” and terminated the employee on the day of that vote.

The employee sued for breach of his employment contract, alleging that the medical center had not honored the termination provisions of the employment agreement by failing to provide him with 90-days’ pay after the abrupt termination, among other claims.

The agreement’s termination clause

The Wisconsin Court of Appeals noted that the written employment agreement contained a list of seven specific occurrences that would allow the medical center to immediately terminate the employee, but none of those seven occurrences were applicable to the employee’s situation.

The employment agreement also contained a termination clause which stated that the employee could be fired without case, provided the employee received 90-days’ notice. The clause did also provide the option for the employer to pay the employee for this 90-day period, if the employee could not provide services through the last day of employment.

Thus, the only way that the medical center could unilaterally terminate the radiologist’s employment was by relying on the specific terms of the “without cause” section of the employment agreement. Under that provision, the medical center was obligated to provide 90-days’ notice or pay. If the medical center had wanted the option to be able to immediately terminate the employee under the circumstances of this case, then the medical center should have negotiated such a term into the employment agreement.

Therefore, the court properly ordered the medical center to pay the employee for 90 days of work.

Drafting, negotiation and review of agreements

If you are considering entering into an employment agreement, it is important that you have an attorney review the terms. In addition, you may wish to ask an attorney to draft or negotiate the agreement on your behalf. Seek an attorney with the experience to ensure that the agreement is fair, provides adequate compensation and protects your rights.