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Severance & Contracts

Breach Of Contract

Contracts are often an important part of an employment relationship. When an employer does not fulfill its end of the bargain, our employment attorneys are ready to help you hold them accountable for their broken promises.

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Breach of Contract Details

In many states, including Minnesota, most employment relationships are at-will. In at-will employment relationships, employers (and employees) can end the employment at any time for good cause, bad cause, or no cause at all. Sometimes, though, employers enter into contracts with employees that give them additional rights and protections. They can be oral or in writing. They can explicit or implicit. And they can be individual or collective agreements. Our employment attorneys can help you navigate whether you may have a contract claim.

Written Contracts

Some employees enter into written contracts with their employers. When these written contracts provide fixed terms of employment, or when the contracts alter the requirements for termination, the employers may not be able to fire the employees without a good cause. Contracts can likewise contain terms that govern the conditions, privileges, and benefits of employment. For example, these terms might relate to job location, schedule, or the amount, nature, and quality of work. They might relate to performance evaluations or disciplinary procedures. And, of course, they might relate to compensation. In some circumstances, employee handbooks, manuals, or other documents might create a contract between an employer and its employees. But this will depend on, among other things, on the language used in the documents. Does it, for example, contain language say that it is a contract? Or a disclaimer saying that it is not a contract?

Union Contracts

If you belong to a union, you may be protected by your union’s written contract with your employer. Union contracts, called "collective bargaining agreements or CBAs," often state that employers cannot fire employees without "just cause." CBAs will typically define the circumstances or violations that can constitute "just cause," which will involve violations of certain company policies or rules. The CBA will also likely define the process by which an employer can determine if "just cause" exists and how an employee can challenge this determination through a grievance process. If you are a union employee and your employer fires you without just cause, you may have a claim for breach of your CBA. Similarly, if your employer is not paying you, or treating you in a manner consistent with your union agreement, you may have a claim. Many CBA’s have a short time frame for taking action if you believe your rights were violated.

Implied and Verbal Contracts

You and your employer may also make an implied or verbal contract regarding the terms of your employment. These contracts are often difficult to prove, but evidence such as emails, letters, phone calls, or other communications that verify the terms of the contract are helpful to prove a contract exists and its terms. Likewise, an employer’s conduct, policies and practices, and statements might create an implied contract with its employees. The longer and more consistent an employer’s practices and policies are, the more likely they are to create an implied contract. Finally, even when no employment contract exists, equity might give employees rights. For example, if you sacrifice something in reasonable reliance on your employer’s promise, you may be able to hold your employer to the promise.

Examples of Potential Claims for Breach of Contract

Examples of potential violations are provided below:

  • Your employer promises to give you equity shares in the company if you stay with the company for 3 years or more and then fails to do.
  • Your employer fires you because of a personality conflict when your employment contract says you cannot be fired without cause.
  • Your employer fires you without going through a progressive discipline procedure when your employer previously promised to follow this procedure before firing you.
  • Your employer promises to pay you a certain salary or hourly rate and then fails to pay you that salary or at that rate.
  • Your employer terminates you without offering a severance package when your employment contract says employees like you are supposed to receive a severance package.
  • Your employer pays you a 10% commission on your sales when your employment contract says you are supposed to receive 18%.

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