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The Puerto Rico Supreme Court recently issued a decision reaffirming the importance of just cause for employment terminations in Puerto Rico. Méndez Ruiz v. Techno Plastics Industries, Inc., No. 2025 TSPR 68 (June 26, 2025). Puerto Rico does not recognize employment-at-will.
The Court reiterated that companies must establish the reasons for termination are not arbitrary, capricious, or unrelated to legitimate business reasons. Under Law No. 80 of May 30, 1976, the Puerto Rico Unjust Dismissal statute, employers must have “just cause” for dismissal of any employee. Employers who are found in violation of Law 80 are liable for a statutory severance for terminations without just cause.
The general categories of just cause dismissals under Law 80 relate to employee performance and conduct, as well as employer reorganizations and layoffs.
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