Most states follow the employment-at-will doctrine, and employment for an indefinite term may be terminated at will and without cause. Absent a specific contract term to the contrary, this doctrine allows an employee to quit or be terminated without liability on the part of the employer or the employee, with or without cause.
But executive employees often have a written employment contract that provides for a more complex compensation structure—including incentives, bonuses, and severance pay—and limits the circumstances under which the executive may be fired or terminated to those situations in which the employer has cause for termination, as defined in the written employment agreement.
In Texas, as in most states, the employment-at-will doctrine is the default rule, meaning that either the employer or the employee can terminate the employment relationship at any time for any reason, or for no reason at all, with some exceptions related to discrimination, retaliation, and other specific statutory protections. However, executive employees often negotiate written employment contracts that provide a more detailed compensation structure and define specific terms under which termination can occur. These contracts typically include provisions for incentives, bonuses, and severance pay, and they may restrict the employer's ability to terminate the executive without cause. 'Cause' for termination is usually defined within the contract itself, and the executive may be entitled to certain benefits or compensation if terminated without cause as specified in the agreement. It's important for both employers and executives to carefully negotiate and understand the terms of such contracts to ensure clarity on the rights and obligations of each party in the event of termination.
