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 Michigan, 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, with or without cause, and without incurring legal liability, as long as there is no specific contract stating otherwise and the termination does not violate any laws, such as discrimination laws. However, executive employees often negotiate written employment contracts that detail a more complex compensation package, which may include incentives, bonuses, and severance pay. These contracts typically also restrict the employer's ability to terminate the executive only to situations where there is 'cause' as defined within the contract. Such provisions protect the executive from arbitrary dismissal and provide a clear framework for termination, which can include performance issues, breach of contract, or other defined misconduct.