Hiring an employee is always a step into the unknown. Depending upon the position you’re filling, the process can be a quick decision or may involve significant time and resources spent interviewing and checking references. While most new hires work out and blend into the team (and some leave in a matter of days, weeks, or months), there are some instances where an employee’s actions are so concerning that they warrant an employer taking legal action and suing them for breach of contract.
The required elements for a breach of contract claim are the same for employee/employee disputes as between any other parties that have signed an agreement. The employer would need to prove that:
- A valid contract exists that included an offer, acceptance of terms by both parties, consideration, and execution of the contract.
- They upheld their legal obligations within the terms of the contract or have a valid reason for not having done so.
- The employee failed to perform their contractual obligation, either by a minor or material breach
- That the employer suffered actual damages as a result of the breach
What this means in effect is that in order for an employer to sue an employee for breach of contract they need to identify a specific term within the employment contract that the employee violated, as well as to show that they sustained harm as a result.
While every employment contract will contain different terms, most contain terms regarding duties of the job, restrictions following termination of employment regarding competition or solicitation, fiduciary duties, required notification of resignation, and theft, whether of real or intellectual property.
An employer making the decision to pursue a claim against an employee needs to consider exactly what damages they seek. In some cases, it may be reimbursement of actual costs or loss of profits that resulted from the employee’s breach. For some, the solution may be seeking enforcement of the contracts terms, restricting an employee from beginning work for a competitor or sharing proprietary information, or prohibiting them from making defamatory statements or from recruiting more of your employees to leave.
Your ability to take legal action against your employee will depend upon the terms contained within the agreement between the two of you. For legal guidance on your options, contact our firm today.
