Most employment contracts are considered at-will. Therefore, the employer may have you sign a contract specifying some terms regarding the position, but this does not limit the employer from firing you without any cause or reason. However, even if it is an at- will employment, an employer cannot fire you for discrimination, relatalition, whistle- blowing and or public policy violations.
Some employment contracts do limit the ability of the employer to fire the employee without any reason and can impose penalties for the employer if the employee is terminated early. This would be something to look for in the contract provisions and determine if there is any limitation to the employer or employee.
If either the employer or employee does not meet the terms of the contract, it is considered a breach. For example, if the contract states that the employee must receive $105,000 as annual salary and the employer fails to meet that, it would be considered a breach. Also, if the employee signed to stay for a duration of two years with the company but decides to leave earlier this would be considered a breach of the contract. If there is a breach in the employment contract, there are defense available for the parties to seek remedies from.
If there is a breach in the employment contract, either party can use these defenses. Mistakes can be either mutual or unilateral. A mutual mistake means that both parties erred in the contract terms and the issue arises of whether or not a contract was even formed. Courts are reluctant to enforce the contract if the mistake drastically affects the subject matter of the contract.
A unilateral mistake is made only by one of the parties and generally it is not a reason to void a contract (unless the other party knew or it had reason to know of the mistake; in such cases the court will likely not enforce it). Similarly, in the employment contracts mistake can be used as a common defense.
Another defense for employment contracts is duress. It protects a party from being forced to enter into a contract through blackmail, threats of physical harm and other forms of force. Courts will not enforce the contract if there is an indication of any type of duress.
Undue influence is a lesser force than duress. It is generally when one party exercises control over another person that causes them to get pressured. Usually, this occurs in fiduciary relationships, meaning a relationship among the family members, a trusted person or someone who is in the position of influence over that person. Courts tend to take a closer look at these relationships to determine whether to enforce the contracts between them.
Additionally, unconscionability can be another defense to employment contracts. This applies when one party entered into a contract that is grossly unfair and they are wrongly induced into contracting. In general, this is seen in situations where one party has more bargaining power than the other. Therefore, the higher position party uses this to their advantage and contracts with them. However, courts will not validate this type of contract.
Still another defense to contracts is misrepresentation. This usually occurs where one party errs in misrepresenting a material matter and the other party reasonably relies on it. However, fraud is more severe because a party intentionally misrepresents a material matter of the contract. It can also be an omission or concealment of the matter that made the other party contract. Courts will not enforce contracts as a result of fraudulent misrepresentation.
Furthermore, an employer can turn to another defense called impossibility or impractical. Usually, in this situation one party is unable to perform the terms of the contract due to an event that makes it impossible. Courts will determine if the defense applies case by case basis and determine if there is truly an impossibility for the party to perform their obligations under the contract.
Lastly, another defense that can be utilized in employment contracts is called frustration of purpose. Generally, this applies in situations where an unexpected event occurs or circumstances arise that frustrate the party’s purpose of entering into the contract.
There are several defenses available to the breach of an employment contract. Therefore, if you are struggling to understand them or applying them to your situation, it would be wise to seek out an employment lawyer in your local state. States can vary in their employment laws and it would be useful to obtain more guidance on this to assist with your situation. If you think there has been a breach of the contract, research to determine what type of contract you signed with your employer and its content.