Employer Rights in a Breach of Employment Contract

The non-breaching party in a contract dispute must attempt to mitigate damages to be awarded monetary damages.

Most employee-employer relationships are "at-will" employment and may be terminated by the employer or employee at any time for any reason. Some employment relationships are governed by contracts that set forth the obligations and terms for each side.

Liquidated Damages

In some circumstances, an employer may be able to recover liquidated damages from the breaching employee if the parties agreed to a set amount at the time of the formation of the contract that would be paid in the event of nonperformance.

Expectation Damages

An employer may be able to recover for harm incurred from the employee's breach of the contract. These damages are usually limited to lost profits that the employer is able to demonstrate was actually lost by the employee's failure to perform under the contract. Speculative damages are generally not recoverable.

Specific Performance

Employers are typically unable to be awarded specific performance by the breaching employee as a remedy in the event of nonperformance. This means that the employer is not able to be awarded an order by the court forcing the employee to do work. Specific performance in an employment context would most likely run afoul of the ban on involuntary servitude under the 13th Amendment to the Constitution of the United States.

References

• Law School Help: Damages for Breach of Contract
• Justia: California Civil Jury Instructions, 2422. Breach of Employment Contract --- Specified Term --- Damages