The bill H.344 proposes to establish a "good cause" standard for the termination of employment in Vermont. It amends 21 V.S.A. § 495 to make it unlawful for employers to discharge employees without demonstrating good cause. The bill defines "good cause" as a reasonable, good-faith reason related to legitimate business needs or if the employee has been employed for fewer than 90 days. It explicitly states that trivial, arbitrary, or capricious reasons do not qualify as good cause, and it includes the employee's failure to satisfactorily perform job duties as a legitimate business reason for discharge.

Additionally, the bill clarifies that the new provisions do not limit employers' rights to discharge employees for good cause or any other rights employees may have under existing laws, contracts, or collective bargaining agreements. Employers will also be required to post a notice regarding these provisions in a conspicuous location at their place of business. The act is set to take effect on July 1, 2025.