California Breach of Employment Contract Attorneys
In order to prevail on a breach of contract claim, you bear the burden of proof to show that a valid and enforceable contract was created. Verbal agreements are just as enforceable as written agreements. The existence of a verbal agreement, however, is difficult to prove especially if there are no other writings that reference it. A breach of an employment agreement occurs when a party fails to perform. You can have a claim for anticipatory breach of contract even before the other party fails to perform.
Common causes of actions for breach of contract in the context of employer-employee relationships include claims for unpaid wages, commissions, bonuses, stock options, as well as termination without just cause in breach of the agreement.
If you were employed pursuant to a commissions’ contract, you cannot be deprived of post-termination commissions if you satisfied all of the condition precedents. An employer who terminates an employee to avoid paying commissions is still liable for all commissions earned prior to discharge. A commission is “earned” when the employee has perfected the right to payment. Accordingly, even if a commission is waiting the completion of some condition precedent (e.g., sale of a property), the commission must be paid to the employee immediately upon the completion of the specified condition precedent. Generally, employers cannot circumvent or deny a former employee post-termination commissions via contract.
As to terminations in breach of contract, California is an “at-will” state. This means that an employer can fire you at-will for any lawful reason, at any time, and without notice. Managerial discretion to fire at-will can be limited by contract. The following is a list of some of the limitations on at-will employment that may give rise to wrongful termination in breach of contract claim.
Employment contract for a specified term: If the employment agreement specifies the length of employment, then an employer cannot discharge you within that period. Unless the agreement provides otherwise, the employer may terminate an employee before the specified term only if there is a: (1) willful breach of duty by employee; (2) habitual neglect of duties; or (3) continued incapacity to perform duties. However, a decision not to renew an expired contract will not give rise to a claim (unless there was an unlawful discriminatory reason involved).
Specified grounds for termination: Often agreements include provisions not to terminate without cause or specify grounds for termination (e.g., failure to meet sales quotas) and include procedures under which termination may occur. Thus, unless the condition precedent occurs (e.g., you did not meet your sales quotas), you cannot be fired for other reasons. Often times the language used in employment contracts fail to define applicable reasons for termination resulting in confusion.
It is not uncommon for contracts to contain vague terms requiring attorneys and courts to apply specific principles of contract interpretation and in some cases to look at extrinsic evidence. There are also additional rules relating to implied agreements.
Issues with non-compete agreements: While non-compete agreements are generally unenforceable in California, an employee’s ability to poach clients may be limited in some circumstances. If you are thinking of branching out, it is important to contact an attorney to learn about the steps you can take to grow your business and whether the agreements in place are actually binding.
There are strict deadlines known as statute of limitations for pursuing breach of contract claims. Failure to meet these deadlines will result in forfeiture of valid claims. Contact one of our attorneys today for a free consultation about your potential case.