Generally a contract for employment (whether verbal or in writing) for an indefinite term or period of time is considered an “at will” contract that may be terminated by the employer or the employee at any time. An employment contract for a definite term, however, may not be terminated by the employer before the end of the term of the agreement, except “for cause” or as otherwise provided under the agreement.

Indeed, as stated in Nelson Trabue, Inc. v. Professional Management-Automotive, Inc., 589 S.W.2d 661 (Tenn. 1979), Tennessee employers retain the right to terminate an employee at any time for “just cause” even if the employment contract does not expressly set forth the reasons for which the agreement can be terminated.

Assuming an employment contract failed to define the conduct that constituted a “just cause” reason to terminate the agreement, how would a court determine what constituted a “just cause” reason for termination? Curtis v. Reeves, 736 S.W.2d 108 (Tenn. Ct. App. 1987) provides the answer. According to the Curtis case, any act of the servant which injures the master’s business, interests or reputation will justify the dismissal of the servant. Id. at 112. The following case provides a good example of an employee establishing that his termination was without “just cause”:

In Markrue Corp. v. Hunley, 1988 WL 64334 (Tenn. 1988) the employer argued that the employee had been terminated for “dishonesty” relating to a number of checks cashed by the employee. While the court agreed that “dishonesty” was a “just cause” reason to terminate an employment agreement, the court affirmed that the trial court’s ruling that the employer had failed to establish “dishonesty” on the part of the employee. Specifically, the court held that the employee had a good reason for cashing the checks and that the employer had not suffered any injury. Thus, the employee was able to recover the compensation that he was due through the end of his employment agreement because there was no “just cause” reason for terminating the parties’ one (1) year employment agreement.

What happens when a supervisor terminates an employee for a purely personal reason? Does the employee have any recourse? If the employee is employed on an at-will basis, he/she may not have a claim against their employer, but they may, however, have a tort claim against their supervisor.

It has been said that it is the right of every individual to accept and retain employment without interference by third persons, especially where such interference is wanton or malicious. And, Tennessee courts agree. Hence, Tennessee recognizes a tort claim for intentional interference with employment against third persons, e.g., supervisors. Ladd v. Roane Hosiery, Inc., 556 S.W.2d 758 (Tenn. 1977).

Lyne v. Price, 2002 WL 1417177 (Tenn. Ct. App. June 27, 2002) provides a great discussion on the law and what it takes to establish an intentional interference with employment claim.