A breach of an employment agreement, also referred to as an employment contract, can occur whenever either party fails to perform their duties under the contract terms. For instance, the employer may be liable for a breach if they fail to pay wages as stated in the contract, or if they deny the employee any benefits that they are entitled to. Another common breach of employment agreement is where the employer terminates the worker in a way that violates the terms of the agreement.

As an example for employees, a breach can occur if they seek to find employment elsewhere before the contract term is up. Alternatively, they might be liable for a breach if they disclose information that is meant to be held privately for the company.

There can be many different issues involved in a breach of contract. Since each contract may be different, a breach of contract might be found for many different reasons. It is most common, and preferred, that employment agreements be in writing. This is particularly important when there is a breach of contract, so that there is written evidence of exactly what the parties have agreed to.

What to Do About a Breach of Employment Agreement?

If you believe that your employer has breached the employment agreement that you initially signed and agreed to, you must first take some precautionary steps before taking legal action:

  1. Check the original employment agreement to make sure that the terms and conditions that were breached were listed and that you signed and agreed to the terms;
  2. Take the problem to your employer and try to resolve the problem;
  3. Talk to a professional specialist or a lawyer to determine whether the contract has actually been breached or the terms have been violated;
  4. Try a form of Arbitration or Mediation to resolve the issue; and
    a. This type of resolution may or may not be provided for in your employment agreement, but you should check your agreement to ascertain this. You will need to follow the procedure laid out in the agreement (if any).
  5. If all fails, take legal action against the employer to be compensated for any loss that resulted from the breach.

Keep in mind that most agreements will explain what will happen if the employment agreement is breached. There are some types of agreements, like a non-compete agreement, that may be considered illegal and struck down in court.

A non-compete agreement is often designed or used to prevent an employee from working for a competitor if they happen to leave their current position. Certain states completely bar any type of non-compete agreement and many others have very strict limitations on it.

Make sure that the provisions in your employment agreement are legal, and it may be a good idea to negotiate the agreement with an employment lawyer if the stakes are high.

What are Some Remedies for a Breach of Employment Agreement?

Breaching an employment contract can lead to legal penalties. Of course, contract remedies will depend on the type of agreement that was reached. It will also depend on the central focus of the breach. For instance, if the breach involves a failure to pay wages, the remedy may include a monetary damages award paid from the employer to the employee, which would reimburse them for the missing wages.

Most contract damages are limited to the terms of compensation laid out in the employment agreement, or “expectation” damages. As another example, if an employer agrees to pay an employee at a certain salary for a period of two years, and attempts to terminate them before that time, the employee may sue to recover the loss salary for the remainder of the two years of their contract.

They do, however, have a duty to mitigate, or to seek comparable employment elsewhere. If they secure employment for less than what they were paid under their previous contract, they may still seek damages for the difference.

Another remedy might involve the employer reinstating the worker to their previous job title after a wrongful termination incident. Other remedies might involve a re-writing of the contract to reflect changes in circumstances, or a requirement that the employer change their workplace policies.

Other common remedies that you may be able to claim for a breach of employment contract include:

  • Payment for any holiday or sick pay that was offered and negotiated, but was not granted by employer;
  • Payment for any travel expenses or work related expenses that was owed, but not paid;
  • Any changes or modification to the employment agreement that was not signed off or agreed by you; and/or
  • Any breach of job description or terms of work hours that was offered before you entered the employment contract or started working.

Compensatory (pain and suffering) and punitive damages are not awarded in contract cases.

Do I Need to Hire an Employment Lawyer?

Employment agreements should be reviewed carefully before they are entered into. You may wish to hire an employment lawyer if you need help drafting, editing, reviewing, or negotiating an employment agreement.

Your attorney can help you understand your employment rights under local, state, and federal laws. Also, your lawyer can represent you in court if you need to file a formal lawsuit due to a breach of contract terms.