What are Employment Contracts?

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What are Employment Contracts?

Employment contracts are legal agreements between an employee and their employer.  A typical employment contract will spell out terms such as:

Some employment contracts may contain other terms and clauses, such as a non-disclosure clause (for confidential company information) or a non-compete clause. Employment contracts can sometimes be the same for each job position, or they can be different for each employee. Employees who don’t work under an employment contract are typically called “at-will” employees.

Is it Possible to Fire an Employee Who Has an Employment Contract?

Yes, firing an employee with an employment contract is possible under some circumstances. Most employment contracts will state terms under which an employee can be fired. These usually include severe instances of misconduct, or for any actions that violate the law.  However, an employee can’t be fired without good reason if their contract guarantees their employment. To be sure, it’s always best to be specific and clear when stating termination procedures within employment contracts. If you’re unsure of the terms in a contract, you may wish to renegotiate or review the contract. 

What are the Legal Remedies for Breaching an Employment Contract?

Breaching an employment contract can lead to losses for both parties. For the employee who has suffered losses, the remedies may include a damages award to cover lost income. In some cases, the court may require the employer to re-hire the terminated employee and restore them to their previous job position.

For employers, legal remedies may also include a damages award to cover company losses. For instance, if the employee is supposed to work with a company for a year, but leaves after only six months (without good reason), they may be required to reimburse the company for losses. These may include lost profits or the costs of finding a replacement employee. 

Common sources of a breach of employment contract may include: hiring/firing terms; privacy disclosures; wage disputes; and unauthorized transfer of work to a third party.

Do I Need to Hire a Lawyer for Help With an Employment Contract?

The impact of some employment contracts can last for a long time. You may need to hire a qualified employment law attorney in your area if you need assistance with an employment contract. Your lawyer can help you negotiate, draft, or review an employment contract so that you understand all its terms. In addition, your attorney will be able to help you file a lawsuit and can represent you in court if you encounter an employment dispute.

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Last Modified: 08-14-2013 02:33 PM PDT

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