What if My Employer Breaches an Employment Contract?

woman tearing a contract apartA lot of companies require employees to sign a contract that establishes the terms of employment. These contracts apply to both parties. This means your employer is also bound by the contract. If he or she fails to uphold his or her end of the agreement, you may be able to recover compensation for the damages you incur.

Talk with our knowledgeable employment lawyers in Sacramento to learn more about your legal options. The consultation is free, and there are no upfront fees.

Below, we discuss the types of employment contracts and what damages may be available if the contract is breached by your employer.

What Are the Types of Employment Contracts?

Employment contracts can be written, verbal or implied. Written contracts are the most common since verbal and implied contracts are harder to enforce.

Depending on the nature of the job, employees may sign permanent or temporary employment agreements. Each type of contract may come with benefits for both the employer and employee.

Some of the most common types of employment contracts include:

  • Full-time – Employees sign on to work approximately 40 hours a week and the employer offers certain benefits like health insurance, retirement plans and paid time off.
  • Part-time – Employees sign on to work less than 40 hours per week, and employers usually do not offer other benefits besides schedule flexibility.
  • Zero-hour – Employees sign on to work only when there is work to be done, usually for on-call shifts.
  • Casual – Employees sign on to work on a seasonal or temporary basis, and employers do not guarantee a minimum number of shifts or work hours.
  • Freelance – Employees sign on to work on a specific project, and the contract usually includes limitations of hours, project and payment details.
  • Union – Employees may be part of a local or nationwide union for specific trades that have a collective bargaining agreement with the employer.
  • Executive – Employees who sign on for upper management or executive roles within a company may sign these contracts. The contract details the benefits, perks and protections these employees enjoy.
  • Fixed term – Employees who sign on to work for a company for a specific period sign fixed term contracts.
  • At-will – Employees sign on to work for a company at their own discretion, and both parties may terminate the agreement at any time.
  • Non-compete/confidentiality – Employees agree not to work for a competitor company while employed by the company or for a certain period after leaving the company.

Permanent, full-time employees tend to benefit the most from employment contracts, as these are generally written. Therefore, it is easier to uphold the contract in court if an employer breaches his or her part of the agreement.

How Was Your Contract Breached?

A contract is breached when one party does not live up to the bargain agreed upon by both parties. For employment agreements, this usually means an employee was terminated for reasons he or she should not have been due to the terms of his or her contract. For example, if an employee’s contract states the employer cannot terminate the employee for failure to work overtime hours but is then fired for not volunteering for overtime. This is considered a breach of contract.

It matters how your contract is breached because this may help determine the legal options available to you.

Anticipatory Breach vs Actual Breach

Most employment contract breaches fall into the category of either an anticipatory breach or an actual breach. An anticipatory breach is one where one party announces his or her intent to break the contract. For example, if an employer agreed to raise an employee’s salary on a certain date, but then tells the employee ahead of time that the raise will not occur on the agreed upon date.

An actual breach is when the contract is broken – once the date for the expected raise comes and goes and the employer does not raise the employee’s salary.

Minor Breach vs Material Breach

Breaches of employment contracts can also be minor or material.

A material breach is one where the injured party does not have to uphold his or her end of the bargain. For example, if you signed an extension of employment so long as your employer increased your salary by a certain date. If your employer fails to give you a raise, you may not be obligated to extend your employment.

A minor breach is still a breach of contract, though, and should get taken seriously. Even though the overall aspects of the contract are upheld in a minor breach, the minor impediment may still significantly impact you. For example, if you were promised a $2,000 bonus, but were only given a $1,000 bonus. Your employer held up part of his or her end of an agreement, but you still lost out on half of your bonus.

What Damages Can I Claim for a Breach of Employment Contract?

If your employer breaches an employment contract, you have the right to pursue damages. This includes:

  • Expectation damages – This is what the employee expected to get out of a contract, such as a pay increase, promotion, bonus, etc.
  • Liquidated damages – These are damages that are difficult to evaluate monetarily, and there is usually a provision in a contract stating how much should get paid out if there is a breach of contract.
  • Compensatory and punitive damages – These damages may be available if the breach of contract was due to discriminatory practices, such as race or sex discrimination.

In some breach of employment contract cases, you may be able to recover compensation for court and attorney’s fees. However, this depends on the type of case and whether it goes to court. No two cases are the same, so you should speak to an attorney about your unique claim.

Contact Arnold Law Firm Today

If your employer breached your contract and you suffered damages, you have the right to pursue compensation. Call our experienced attorneys today to discuss your claim.

The consultation is free and there are no upfront fees.

Call 916-777-7777 today.