When I was fired from my first programming job, my boss took this approach. I was inexperienced and frankly quite shocked -- there had been no warnings, and the reason cited was laughable* -- so I ended up signing it. I've come to realize that I despise the practice. It asks a person who is feeling vulnerable to increase their own shame, doing nothing productive for either party. I always thought I was a careful person when it came to contracts and such, but this was a real lesson in keeping one's guard up even when taken by surprise.

* Namely, that I didn't deliver projects in a timely manner. Normally this would have been good cause, but instead of looking to more significant factors (bickering bosses making major changes to requirements on a daily basis, unstable platform for development, etc.) they considered the problem to be fundamentally attributable to my slow typing speed of ~70wpm.