Employment contracts are agreements that are designed to protect both the employer and their employee. Having a contract in place is meant to prevent disputes: by spelling out the responsibilities, expectations, and obligations that each has to the other, it’s hoped that both sides will abide by its terms.
Unfortunately, that’s not always the case, and disputes can arise. Below you’ll find the most common employment contract disputes and what causes them.
- Breach of contract – Breach of contract is one of the most common legal claims, no matter what the type of contract. When an employment contract is involved, it reflects a failure to fulfill at least one of the agreement’s terms and conditions. It might have to do with discrepancies surrounding compensation or benefits, failure to perform, intellectual property, or any of the other clauses contained within the contract. When one side does not do what they’ve agreed to, it represents a breach. All of the specific reasons cited below represent a breach of contract.
- Wrongful termination – When an employee is fired and they believe that they did not deserve to be, they can file a wrongful termination claim. Though most employees are considered “at will” and serve at the pleasure of their employer, wrongful termination can be asserted if there are specific clauses in the contract that the termination violates, or if they believe they have been fired as a result of discrimination, retaliation, or in violation of public policy.
- Non-compete agreements – Many employment contracts contain language prohibiting an employee from going to work for a competitor, or in the same industry and geographic area. When an employee breaches those terms, their employer can take legal action to stop them. To make sure that a non-compete agreement is enforceable, its terms must be clear and reasonable.
- Non-disclosure agreements – When an employee has access to proprietary or sensitive information about their company, they are often asked to sign agreements that prevent them from sharing this information, whether with the public, a competitor, or anybody else. Subsequent disclosure can be the catalyst for a lawsuit, and fear of disclosure can evoke a temporary restraining order or injunction.
These examples just scratch the surface of potential employment contract disputes. If you need help navigating one of these issues or any other, contact our office today.