Key Takeaways

  • “Terminated” means the employment relationship has ended—this can be voluntary or involuntary.
  • Involuntary termination often implies misconduct or underperformance, whereas layoffs are generally driven by business conditions.
  • Being “fired” usually refers to being terminated for cause (e.g., violations, poor performance).
  • At-will employment allows employers or employees to end the relationship at any time for nearly any reason.
  • Unemployment benefits may be available after certain types of terminations but not typically for cause-based firings.
  • Legal distinctions between firing, termination, and layoffs can affect eligibility for benefits and job interviews.

What Does Terminated Mean?

If you’re wondering, “what does terminated mean,” being terminated is the last and final step at which point the employee’s position ends, and the relationship between the employer and employee is severed. In simple terms, the employee will no longer be working for the company. Termination can be either voluntary or involuntary. In addition, an employee can be terminated for cause or laid-off. For cause means that he or she is being fired for a specific reason, generally a behavioral-related reason. Being laid-off means that the work is no longer needed.

Terminated vs. Fired: Key Differences

While the terms “terminated” and “fired” are often used interchangeably, there are key differences in tone and legal implications. “Fired” generally implies termination for misconduct or poor performance—commonly referred to as being terminated "for cause." In contrast, “terminated” is a broader term that includes voluntary resignations, layoffs, and mutual separations.

For example:

  • Fired: Dismissed for specific reasons like violation of company policy or insubordination.
  • Terminated (general): Could also include voluntary resignation, redundancy, or mutual agreement.

The distinction is particularly important during job interviews or background checks. Using “terminated” rather than “fired” may offer a more neutral explanation of past employment.

Voluntary vs. Involuntary Termination

Termination can occur for a number of reasons. Most importantly, termination is either voluntary or involuntary. If the termination is voluntary, that simply means that the employee is choosing to resign on his or her own. Resignation can occur if the employee has a new job, is moving to another area, returning to school, or retiring.

Unlike voluntary termination or resignation, involuntary termination is usually the result of an employer's dissatisfaction with an employee or an economic downturn, at which point the employee is either terminated or laid-off.

Laid Off vs. Terminated

A layoff is a type of involuntary termination that typically occurs due to economic reasons, restructuring, or downsizing—not because of the employee's conduct. Key contrasts include:

  • Laid Off: Often affects multiple employees at once and may come with severance pay or rehiring opportunities.
  • Terminated (for cause): Typically pertains to an individual and results from job performance or policy violations.

Being laid off may entitle the employee to more favorable unemployment benefits or rehire potential, whereas termination for cause can restrict these options.

Reasons for Termination

  • Employee performance
  • Attendance problems
  • Theft of a colleague’s personal belongings
  • Theft of intellectual property belonging to the employer
  • Insubordination
  • Failure to abide by company policy
  • Violence or threats
  • Sexual harassment
  • Ethical issues
  • Falsifying information
  • Watching pornography

Mutual Termination

There are some instances when the employer and employee both realize that the relationship is not a good fit. Such parties will generally agree on an exit strategy; the employer will also agree to provide the employee with a favorable recommendation in the event that any future potential employers reach out to inquire about the employee.

Warning Letters

Most employers will follow specific procedures when choosing to terminate the employee. All problems will need to be addressed and documented before terminating the employee. However, if an employee is being terminated due to egregious reasons, i.e. Sexual harassment, theft, etc., then the problem will be documented and the termination will generally occur immediately thereafter. If an employee has performance issues regarding the position, then those problems will first be documented and addressed.

The employee will be advised that the performance must improve within a specific time frame. During this time, the employee will be provided with a warning letter, which was will detail the problematic performance or behavior, what needs to be changed and improved, and what happens if such improvement does not occur. Some companies first provide a verbal warning before a written warning, depending on the severity of the circumstances.

At-Will Employment

Employers need not provide a reason for terminating an employee in an ‘at-will’ employee agreement. ‘At-will’ simply means that the employee can be fired for any reason or no reason at all. There are no laws to protect those who are wrongfully or unfairly terminated based on ‘at-will’ contracts unless the terminated employee brings about a wrongful termination lawsuit, which is usually based on discrimination, i.e. age, race, religious, or gender discrimination.

Other reasons to bring a wrongful termination suit are due to retaliation or payback on the part of the employer (i.e. whistleblowing) or the refusal to commit an illegal act on the part of the employer. Such dismissal is also illegal on the part of the employer if the company doesn’t follow its own termination procedures. If the employee does in fact bring a wrongful termination lawsuit against an employer, and subsequently wins the case, he or she may either receive monetary compensation for being wrongfully dismissed or may in fact be reinstated back into the company. Moreover, the employer may also be charged punitive damages for wrongfully terminating the employee.

Unemployment Benefits

After an employee is terminated involuntarily, he can file for unemployment. Unemployment, however, is not automatically given to the former employee; it is rather a process in which the terminated employee must submit an application and speak to an unemployment representative regarding the facts and circumstances of the termination. However, if the termination, while involuntary, is due to lay-offs, then the employee will likely be provided with a severance pay package in which 2-12 months of pay is awarded to the employee, depending on the company, position, annual income, and length of time with the company.

Legal Rights After Termination

Employees have specific rights after being terminated. These include:

  • Final Paycheck: Many states require employers to provide a final paycheck within a specific time.
  • Continuation of Benefits: Under COBRA, eligible employees may continue health insurance coverage for a limited period.
  • Wrongful Termination Claims: If you believe the termination was discriminatory, retaliatory, or breached an employment contract, you may be able to file a legal claim.

Understanding your rights can help you respond appropriately and seek legal advice if needed. You can find qualified employment attorneys through platforms like UpCounsel for help navigating these situations.

Addressing Termination in Job Interviews

If you were terminated and are seeking new employment, transparency is essential during interviews. When discussing past termination:

  • Focus on lessons learned and growth since the incident.
  • Avoid disparaging your former employer.
  • If laid off, clarify that it was unrelated to performance.

Employers often value honesty and accountability. Reframing the experience constructively can improve your chances of success.

Frequently Asked Questions

  1. What does it mean to be terminated from a job?
    Termination means your employment has ended, either voluntarily (resignation) or involuntarily (firing or layoff).
  2. Is being laid off the same as being terminated?
    Not exactly. A layoff is a type of termination but typically occurs for business reasons and not because of employee fault.
  3. Can I collect unemployment if I was terminated?
    You may be eligible unless you were terminated for serious misconduct. Layoffs usually qualify for benefits.
  4. What is the difference between being fired and being terminated?
    Being fired usually implies termination for cause. Termination is a broader term that includes layoffs and resignations.
  5. What should I say in an interview if I was terminated?
    Be honest, take accountability if appropriate, and explain what you’ve learned or how you've grown since the termination.

If you need help determining whether or not you were wrongfully terminated, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.