Breach of Contract

In some circumstances employees have employment contracts with their employers. Contracts can be written, oral or implied in fact. When an employer breaches a contract with an employee, the employee can bring a breach of contract claim, seeking damages caused by the broken contract. For example, an employee whose contract promises that the employee will not be fired except for “just cause” should look at whether his or her employer fired him or her without just cause.

Written contracts are generally documents which set forth all the basic terms of employment. Some written contracts provide for “at will” employment (where an employer can fire for any legal reason, whether it is a good reason or not). Other written contracts provide for “just cause” termination (in essence the employee can be fired only for a good and sufficient reason). Some contracts are not necessarily clear regarding the standard for termination and require a legal analysis and understanding of the surrounding circumstances to interpret the contract. In general, just cause contracts provide the most protection for employees.

Even if an employee does not have a written contract, he or she may have a contract claim because there is an oral or implied in fact contract. An oral contract is just that, an oral contractual agreement providing, for example, that an employee has a job as long as she does her job well, or unless there is “just cause” for termination.

Where the overall circumstances of the employment relationship, or the “totality of the circumstances,” imply an employment contract, or a relationship where the employment will be ended only for “just cause,” there is an implied in fact contract. Courts look to factors such as the duration of the employment relationship, personnel policies or practices of the employer, actions or communications reflecting assurances of continued employment such as positive performance reviews or statements promising or suggesting longevity and practices of the industry in which the employee works.

It is more difficult to bring a claim for breach of an oral contract or an implied in fact contract if there is a written “at will” contract or the company has “at will” policies and procedures which are made known to the employee. Employees who have union contracts do not usually have employment contract claims, as their employment relationship is governed by the collective bargaining agreement (although they may have other claims such as discrimination or public policy claims).

Often contract claims are brought in conjunction with other claims, such as violation of public policy, discrimination, retaliation or harassment claims, especially since the remedies for contract claims are more limited than with many other employment claims.

Siegel LeWitter Malkani has been assisting employees with contract claims, often in conjunction with other claims, including the following:

• In Haider v Byers, we represented an employee in a pregnancy and breach of contract claim filed in San Francisco Superior Court. The plaintiff won both claims and received the largest award in that court for an employment claim that year.
• In an arbitration, we represented an employee terminated without just cause in which the employer claimed the employee was “at will,” but we proved that he was entitled to the protection of a contract. He was awarded damages for the breach of contract.

If you believe Siegel LeWitter Malkani could provide you with assistance regarding breach of contract claims, please contact the firm.