Breach of Employment Contract: What Can I Do If My Employer Breaks Its Promise?
What Does an Employment Contract Entail?
Employees typically enter into a contract when they began work with a new employer.
A written contract outlining the employee’s pay, duties, and obligations to the employer protects an employee from being fired at a moment’s notice by the employer.
Pennsylvania, New Jersey and New York are At-will employment states. At-will employees can be fired for any legal reason and at any time; however, they can not be fired for an illegal reason like discrimination or retaliation.
A contracted employee has even more job security: he or she cannot be fired for any additional reason identified in the contract. A contract can contain a variety of terms for employment including job duties, pay, and protections against termination, but it is against the law for an employer to contract away an employee’s right to minimum wage or to his or her right to collect unemployment.
It Doesn’t Have to Be Written
The contract may not actually be written down. Courts recognize implied contracts or oral promises to perform and to compensate someone. A contract agreement can be implied by statements, actions, or other documents such as an employee handbook.
Reneging: The Breach
An employer may breach an employment contract by violating one or more of the terms agreed upon by the employer and employee. There are several types of employment contract breaches, including but not limited to:
- Material breaches of contract: This type of breach of contract often results in significant harm for the non-breaching party.
- Non-material breaches of contract: This breach can mean a portion of one of the terms is not
being implemented correctly.
- Anticipatory breaches of contract: This breach occurs when the employer foresees that he, she
or it cannot fulfill the terms of the contract and the parties mutually agree
to close out the contract.
Finding the Breach
Most contracts address how a dispute will be handled. When a potential breach occurs, however, an employee may not know exactly how to confirm if the contract is being breached. It may not be clear or it may seem as if the scenario that’s occurring was not contemplated or incorporated in the contract terms. Contacting a law firm that specializes in reviewing and analyzing employment contracts and resolving such disputes in favor of the employees, could save an employee time and increase an employee’s recovery of damages.
If an employer negatively impacts an employee’s financial compensation, the employee may be entitled to damages. Console Mattiacci Law, LLC will explore every opportunity to obtain the highest damages to which the contracted employee is entitled. If the breach is proven in court or the employer agrees to settle out of court, damages will be calculated based on what the employee would have received if the contract was not breached. Compensation for pay, benefits, demotions, failure to promote, or termination may be awarded.
Four types of monetary damages are typically sought in an employment contract suit:
- Expectation Damages are paid for what the employee expected to receive if the contract had been upheld. However, he or she is also responsible for trying to close in the gap created by the breached contract. He or she can mitigate the damages by looking for another job. Then the Court can award the amount not covered by the new job rather than the amount that could have been earned if the employee had been fulfilling the contract since the employee has decided not to look for employment but taken the time off.
- Liquidated damages are identified in the contract itself. A liquidated damages contract provision states a specific amount of money that one party must pay the other party if the former breaches the contract. These damages are intended to compensate for losses that are hard to quantify.
- Attorney fees may be awarded if an employee’s contract states that the employer will pay these fees if a breach of contract occurs. Otherwise, the employee could request attorney’s fees which would be awarded at the court’s discretion.
Case In Point
Console Mattiacci Law, LLC recently represented Charles Nifong, the former chief investment officer and vice president of finance for Allentown-based CrossAmerica (formerly Lehigh Gas), which was acquired by CST Services. The case involved a contract of which Mr. Nifong was a beneficiary and which provided Mr. Nifong certain benefits if his important job duties were reduced after a change in control at the company.
Mr. Nifong complied with the contract’s requirements when a change in control occurred and his important job duties were reduced; however, the company failed to comply with its contractual obligations and refused to pay Mr. Nifong the benefits to which he was entitled under the contract
Console Mattiacci Law represented Nifong in his suit against CST Brands, Inc., CST Services, LLC, Cross America Partners LP, and Cross America GP LLC, alleging breach of contract and violations of the Pennsylvania Wage Payment and Collection Law. The jury found that the defendants breached their contract with Nifong and did not act in good faith. Nifong was awarded the stipulated contract amount, liquidated damages, and prejudgment interest, which totaled $1,711,591.44 plus attorneys’ fees.
CONSOLE MATTIACCI LAW, LLC ǀ PHILADELPHIA-AREA
ATTORNEY FOR YOUR EMPLOYMENT CONTRACT DISPUTE
If you are in Pennsylvania, New Jersey or New York and have been offered a contract by an employer, it would be to your benefit to have a skilled employment lawyer review that contract. The attorney could then negotiate the best possible terms.
If you are party to an employment contract and your employer has breached it, a lawyer could help you enforce the contract and collect damages you’ve suffered. However, it’s important to act quickly. At Console Mattiacci Law, LLC, we are proud to represent employees in contract matters, including negotiations and disputes. Call us today at 215-545-7676 to schedule an appointment.