What to Do When an Employment Contract Is Breached

California is an “at-will” state, meaning that either the employer or employee can terminate the employment relationship at any time, for any reason, as long as it does not violate any laws.

When an employee has a contract with their employer, that changes things. Either party can be liable to the other for breach of the employment contract terms.

If you are wondering if you might have a breach of contract claim, here is a general guide to breach of employment contract law in California.

Can a Contract Supersede the Law?

Contracts cannot be in violation of the California Labor Code.

However, employment contracts generally can set aside the employment-at-will provision.

Employment contracts sometimes contain a set term of time for the employment relationship.

Employers and employees cannot terminate that relationship without cause, or they would be in breach of the employment contract. 

However, if an employee wishes to end their employment, the court or their employer cannot force them to continue their employment, though the employer may have other remedies for breach of the employment contract.

Is a Verbal Agreement Binding in California?

An employment contract in California can be either written, oral, or implied by circumstances.

All of them are binding and enforceable. However oral or implied contracts can be much more difficult to prove legally.

The breaching party could argue that there was no contract or that the other party is misrepresenting the terms, since there is nothing in writing. 

What Is a Breach of Contract in Employment Law?

California employment laws are part of the California Labor Code.

Employers may terminate an employee’s contract for any willful breach of duty or if the employee habitually neglects their duties.

Employees may terminate with the employer for any willful or permanent breach of the contract terms as well. The terms of the contract will define what would constitute a breach. 

Under general contract law, the injured party could terminate a contract if the breach was major, meaning the contract is difficult or impossible to complete.

They might not be justified for terminating a contract for a minor, less severe breach, where the parties could still complete the contract satisfactorily. 

What Are Breach of Contract Damages in California?

The most common type of damages for a breach of an employment contract in California are compensatory.

The party that breached would be liable to the other party to pay for the losses they caused.

For example, a breaching employer that terminates a contract without cause might have to pay the employee their wages for the remaining time left in the contract.

Or a breaching employee might have to pay the employer’s costs to hire a replacement if they leave the company before their contract expires. 

The injured party must typically attempt to mitigate their damages.

Running with the examples above, the employee must make a reasonable effort to find comparable employment as quickly as possible, and the employer must not delay to replace the employee.

Injunctive relief might also be available as damages, though it is far less common. Injunctive relief means that the court orders the parties to stop the actions constituting the breach.

It could mean that the employee gets their job back, for example. However, as stated above, a court cannot force an employee to continue their employment against their will.

Contact Farzam Law Firm 

Farzam Law Firm attorneys are experienced employment and labor law litigators.

We have helped many clients with employment law matters throughout Los Angeles and the surrounding areas.

We can help protect your rights and assist you with your breach of employment contract claim. Contact us today to schedule a consultation to discuss your case.

Joseph Farzam

Mr. Farzam attended Santa Monica high school and worked at McDonald’s and local coffee shops to support himself. Although he worked 2 or 3 jobs, he valued education greatly and earned a bachelor’s degree from California State University, Northridge in biology, and attended the prestigious Pepperdine University School of Law. He graduated with high marks and passed the California bar exam on the first try. Mr. Farzam has received the coveted titles of Super Lawyer, Los Angeles Magazine’s Top Lawyers, and has received The Litigator Awards.  He is a proud member of the Consumer Attorneys Association of Los Angeles (CAALA) and California Employment Lawyers Association (CELA).

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