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 New Jersey, as in most states, the default employment relationship is governed by the at-will employment doctrine. This means that, in the absence of a specific contract stating otherwise, either the employer or the employee can terminate the employment relationship at any time, with or without cause, and without incurring legal liability. However, it is common for executive employees to have written employment contracts that detail a more complex compensation structure, including incentives, bonuses, and severance packages. These contracts often include provisions that limit the circumstances under which the executive can be terminated, typically requiring the employer to have 'cause' as defined within the contract. Such terms must be adhered to, and any termination not in compliance with the contract could lead to a breach of contract claim. It is important for both employers and executives to understand the specific terms and conditions outlined in their employment agreements to ensure compliance with their contractual obligations.