In short, employment contracts, or employment agreements, simply refers to an agreement between an employer and their employee. This agreement specifies the core terms of the employment, and may be negotiated before or after hiring. Employment agreements are legally binding for both parties once they have been signed. Although they may be oral or implied from conduct, it is preferable that the agreement be in writing as employment law favors written documents over oral or implied agreements.

An employment agreement defines the terms and conditions of employment, such as:

  • Pay rate;
  • Hours;
  • Duties;
  • Benefits;
  • Job procedures;
  • Termination requirements;
  • Grievance procedures;
  • Non-compete or non-disclosure agreements;
  • Overtime requirements; and
  • Confidentiality.

Other common contents include the length of the employment term, which could include the date of hire and date of termination, as well as terms for vacation and leave.

A breach of an employment agreement occurs when either party involved fails to perform their duties as determined by the contract terms. An example of this would be an employer failing to pay wages as stated in the contract, or denying an employee benefits that the employee is entitled to. Both the employer and the employee may be held liable for a breach of the employment agreement. Another common breach of employment agreement occurs when the employer terminates the employee in a way that violates the terms of their agreement.

A common breach for employees occurs when employees seek employment elsewhere before their contract term is up. Additionally, employees may be liable for a breach of contract if they disclose information meant to be held privately by the company. As each contract will likely be different, a breach of contract may be found for several different reasons. This is why having the agreement in writing is beneficial, so there may be written evidence of what exactly each party has agreed to.

What Can Be Done About a Breach of Employment Agreement?

Once an employee and employer have entered into an employment agreement, they may not end their contractual relationship outside of the methods discussed in the agreement. If the employer or the employee breaks the contract, the nonbreaching party could be entitled to damages and may enforce the agreement in court.

In the event of a breach, such as your employer breaching your employment agreement, there are some precautionary steps you should take before taking legal action. First, you should check your original agreement in order to verify that the terms and conditions were actually breached.The most important step is to first ensure that you both signed and agreed to those terms.

Your next step should be to approach your employer and discuss the issue with them. The breach may have been unintentional, or the two of you may be able to resolve the issue on your own. If that is not the case, you should consult with a professional specialist or an attorney, to determine whether the contract has actually been breached and which terms have been violated.

Alternatively, you may try a form of mediation or arbitration to resolve the issue. However, these types of alternative conflict resolution may not be available to you in your employment agreement. It is important that you follow any procedures laid out in the employment agreement.

If all else fails, you would need to take legal action against your employer in order to be compensated for any losses resulting from the breach. Most agreements will explain what will happen if a breach occurs, and there are some types of agreements that could be considered illegal and would be struck down in court. An example of this would be a non-compete clause. Some states completely bar any type of non compete, while others place very strict limits on them.

Are There Any Remedies for Breach of Employment Agreement?

Available remedies largely depend on the type of agreement that was breached, as well as the central focus of the breach. If a breach involves failure to pay wages, remedies may include a monetary damages award paid by the employer to the employee in order to reimburse them for the missing wages. In general, most contract damages are limited to expectation damages, which are the terms of compensation detailed in the employment agreement.

An example of this would be an employer agreeing to pay an employee a specific salary for a specific amount of time, but then attempting to terminate the employee before that time. In such a case, the employee could sue the employer to recover the loss of salary for the remainder of the specified time.

However, in cases such as the example just mentioned, the employee does have the duty to mitigate. Therefore, an employee should immediately seek comparable employment elsewhere. If they are able to secure employment but for less than what they were paid under their previous contract, they could still seek damages to make up the difference. Another potential remedy is for the employer to reinstate the employee to their former position, such as after a wrongful termination incident. Other common remedies include:

Re-writing of the contract to reflect changes in circumstances;
The employer is required to change their workplace policies;
Payment for any holiday or sick pay that was offered, or negotiated, but was not granted by the employer; and/or
Payment for any travel expenses or work related expenses owed but not paid.

Compensatory damages, such as pain and suffering, and punitive damages are not generally awarded in contract cases.

Do I Need an Attorney for Breach of Employment Agreement Issues?

Before entering into an employment agreement, you may wish to have a skilled and knowledgeable employment attorney review the document to ensure your best interests are protected. An experienced employment law attorney can provide help drafting, editing, reviewing, or negotiating an employment agreement. Additionally, they can help you file a claim if necessary, as well as represent you in court.