When an employee and employer enter into an employment contract, both sides must, by law, abide by the terms of the contract. Do you fully understand the legal rights you may be giving up by entering into an employment contract? Whether you have been provided an arbitration agreement, a non-competition agreement, a severance contract or any other type of employment agreement, Gibbons Leis is here to help you fully understand your legal rights. If you have already signed an employment agreement and have questions about its enforceability or meaning, we can help.
What Is Included in an Employment Contract?
When an employee starts a new job, his/her new employer may ask the employee to sign an employment contract discussing various conditions of employment. Employment contracts can be written, oral, or implied, but it is in an employee’s best interest to make sure that the employer puts all discussed terms in writing. Some of these terms may concern:
- Salary. The contract will typically list an agreed-upon salary for which the employee will work.
- Nature of the work performed. The contract may discuss the nature and purpose of the employment.
- Benefits. An employment contract may also mention vacation days, health insurance, commission specifications, and other benefits.
- Grounds for potential termination. Generally, employers have the right to terminate an employee at any time for any legal reason. This right is called a termination at-will. Some contracts will specify that employers can only fire employees for a good cause or for specific reasons. The contract may also specify the length and type of employment, e.g., one-year contract.
- Non-solicit clauses. A non-solicit clause can prevent employees from taking the company’s customers and employees when they leave to start their own company.
- Non-compete clause. Non-compete clauses prevent employees from working in a position that competes with the employer.
How Employers Breach Employment Contracts
If an employer breaches the terms of an employment contract, the affected employee may be able to recover damages. Some of the most common breaches of contract include the following.
Failure to Pay Wages
All North Carolina employees are entitled to receive fair payment for the hours they work. Unpaid wage claims may stem from:
- Unpaid overtime. Employers must pay non-exempt employees overtime. Some employers classify non-exempt employees as exempt to avoid paying them overtime.
- Failure to pay minimum wage. The Fair Labor Standards Act and the North Carolina Wage and Hour Act require employers to pay a minimum of $7.25 an hour. If your employer has paid you less than minimum wage, you can recover the wages your employer owes you.
- Failure to pay owed wages. An employment contract often directly states the salary the employee can expect to receive and when he can expect to receive it. However, some employers may not pay their employees in a timely fashion, if at all.
- Failure to pay holiday or sick pay. Employment contracts may address paid holidays and sick days for employees. Failure to pay for these days can be a wage violation.
At-will termination means that either the employer or the employee can terminate employment at any time for any legal reason. However, anti-discrimination laws prohibit an employer from firing employees based on their:
- National origin
If an employer fires an employee for discriminatory reasons, the employer has committed a wrongful discharge. Wrongful discharges can also occur for numerous other reasons. For example, if an employee refuses to perform an illegal act and gets fired as a result, he may have a case for wrongful termination. In any case, we can help determine what steps to take following your wrongful termination.
Proving an Employer Breached a Contract
To establish a breach, you will need to prove that a valid contract did, in fact, exist between you and your employer. Next, you will need to establish exactly how your employer breached the contract. Proving a breach will require you and your attorney to carefully review and analyze all the terms of your contract. Lastly, you will need to show that the breach of contract caused you some sort of harm. This harm can refer to monetary loss (unpaid wages), loss of position (wrongful termination), or any other negative outcome.
Proving these elements can help you build a strong case against your employer for breach of contract. Unfortunately, proving these elements is rarely easy. Even if you do, you can bet your employer will fight tooth and nail against the accusations. Phil Gibbons started his career representing employers, so he knows the tricks that employers and their insurers might try to pull. More importantly, he knows how to defend against them.
Damages That Can Be Recovered in a Breach of Contract Lawsuit
If your employer has breached your employment contract, you will likely receive compensatory damages. These damages will equal the amount you would have received if your employer had not breached the contract. The employer may be responsible for the full amount of the contract, even if the employee had not fully performed his contract duties at the time. Employees may receive damages to cover:
- Wages and benefits withheld by your employer
- Holiday pay, sick pay, or benefits your employer refused to grant you
- Changes to the contract that you did not agree to
Employees may also receive “specific performance” which requires the employer take action to remedy the situation. For example, specific performance will allow reinstatement of the employee if the employee was the victim of a wrongful termination.
When a Contract Is Breached, You Deserve to Be Compensated
Employees trust that their employers will stay true to the words in their employment contracts. Unfortunately, this is not always the case. As a result, many employees have their rights violated with regards to fair wages and fair treatment in the workplace. Gibbons Leis, PLLC has years of experience representing mistreated employees. For assistance, please contact us today at (704) 612-0038 or by filling out the form on this page.