Schwimer | Weinstein LLP - Law Firm, Santa Monica, California, Complex Business Litigation | Breach of Contract
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Breach of Contract

An employment contract outlines the terms of the relationship between an employer and employee and establishes rules to be followed. There’s no limit to the number of provisions it can contain. It can qualify benefits, salaries and job parameters. Specify job duration. Even identify expectations around employee performance and spell out specific reasons for termination. If an employer violates any of provisions it has set down in the employment contract, it is in breach of contract with the employee. And Schwimer Weinstein can help you defend your rights.


Three forms of employment contracts

They are: Implied, oral and written. Written contracts are important for this breach of contract discussion.


Who typically gets a written employment contract?

For most employees, written contracts are not the norm. They are more common in executive positions. Union employees do work under a written union contract. And before they can sue for breach of contract, they usually must first pursue other remedies defined in the contract, including grievance procedures, arbitrations, mediation, etc. This is very common in employment contracts.


A written employment contract establishes rules.

The terms established in any employment contract are in fact the “rules” that both employers and employees must abide by in order to avoid breaking the terms of the contract. And there are consequences if those rules are broken. If an employer doesn’t honor the terms of the contract, it could face a lawsuit. If an employee breaks the contract, he could be terminated or reprimanded in some way.


Any contract term or condition can be associated with certain exceptions or qualifications that also become terms of the contract. For instance, a length of service provision can be mitigated by termination for “good cause.”


What is a “good cause” exception for termination?

A “good cause” exception in an employment contract means an employee can be fired for any reason that’s defined in the contract — i.e., not meeting sales goals, violating a morals clause, etc.


What typically happens is that an employee under written contract is fired under the “good cause” exception to the length of service provision. The employee sues because he thinks there wasn’t a good cause for his termination. The court then examines the contract terms to determine whether, according to the definition of “good cause,” the contract was breached.


Bad faith = breach of contract

When an employer makes a clearly unreasonable interpretation of a provision in the contract, he’s violating its terms, and that’s called “bad faith breach of contract,”


Restitution damages

Employees can only recover the amount they would have earned had the contract not been broken. It’s referred to as “restitution damages.” This means an employee can sue for lost wages and benefits as well as the amount he or she would have earned in the future (minus the earnings of a new job). While an employee cannot collect damages for emotional distress, that information may influence the outcome of a breach of contract case.


If you feel your employer is in breach of contract with you, contact Schwimer Weinstein as soon as possible so we can advise you of your rights.


We can help. Contact Schwimer Weinstein for a free, no-obligation consultation.