California law protects employees who have entered into legally binding employment contracts with their employers. An employment contract may provide protections against arbitrary actions, including termination and discipline without a good reason, or provide for compensation to be paid to the employee if the employer terminates the relationship. When a breach of contract causes an employee to lose income or affects other valuable rights, the employment attorneys at Minnis & Smallets work to ensure that the employee receives a remedy for the employer’s broken promise.
An employment contract may be in the form of a formal written agreement. A written employment contract may also take the form of an offer letter that specifies the terms and conditions of the employment being offered. An employment contract may also include written commission plans or incentive compensation plans. In some cases, promises contained in an employer’s written policies or handbooks may create a contract.
Some employment contracts are verbal, rather than written. When an employer makes promises about the job or compensation, and the employee relies on those promises when accepting or continuing employment, then a contract may be formed. While it is easier to prove the existence of a written contract, an employee is entitled to enforce an oral employment contract if the employee can prove that an oral promise was made and accepted, and as long as the terms agreed to orally do not conflict with a written agreement.
A breach of contract means that a promise made in a contract has been broken. For example, if an employment contract specifies that an employee will hold an employment position for two years and the position is terminated after one year, contract may have been breached.
Another common example of a breach involves promises that an employee can only be terminated for cause (“just cause”). Those contract provisions mean that a termination cannot be arbitrary. An employer must have a legitimate reason (usually involving misconduct, poor job performance, or some other compelling reason) to terminate an employee who cannot be terminated without “just cause,” according to a contract provision. If the employer cannot prove that it has a just cause for the termination, then the contract has been breached, entitling the employee to recover damages.
The remedy for a breach depends on the facts of the case. In most cases, employees are entitled to recover their financial losses that resulted from the breach. For example, if an employee was fired in violation of the contract and it takes the employee a year to find a comparable job, even after a diligent job search, then the employee may be entitled to recover lost wages for that year. And if the best replacement job the employee can find pays less than the old one, the employee may also be entitled to recover the difference in wages.
Deciding whether an employment contract exists and, if so, whether the contract was breached requires an investigation of the facts and an understanding of California law. The employment lawyers at Minnis & Smallets have the skill, knowledge, and experience to represent employees in breach of contract claims. If you believe your employer failed to honor an employment contract, you can obtain the legal advice you need by calling us at 1-415-551-0885 or by submitting our online contact form.