Breach Of Employment Contract: What It Means (2026)

What Constitutes a Breach of an Employment Contract?

A breach of employment contract occurs whenever an employer or employee fails to perform a material term of their agreement. The terms are relatively easy to discern when the parties have a written agreement. However, the terms of an implied contract may be more difficult to determine.

Common Examples of Employer Contract Violations

An employer breach occurs when the employer fails to carry out its contractual duties or prevents the worker from carrying out their terms under the agreement. Thus, some common examples of employer breaches include:

• Failing to pay the worker
• Failing to reimburse the worker for expenses as agreed
• Denying the worker entry into the workplace or failing to provide necessary materials

When an employer breaches their duties, the employee is usually excused from carrying out their contractual duties. For example, in California, an employee can quit when the employer breaches an employment contract.

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How to Identify and Document a Contract Breach

A breach of contract will usually be fairly obvious because it will frustrate the purpose of the agreement. For example, suppose a builder contracts with a painter. If the builder does not provide the advance payment required by the contract, the painter cannot buy the paint and supplies. Similarly, if the builder does not show up on the scheduled date to unlock the home, the painter cannot perform the contracted services.

Steps to Take When Your Employer Violates the Agreement

You should document the breach as well as the events leading to and following the breach. Preferably, you will have written documentation, such as emails, text messages and letters.

Review your contract to determine how disputes are meant to be resolved. For example, many contracts call for notice and a period to cure the breach. Follow the dispute resolution process.

Finally, consider consulting a contract lawyer to discuss your legal options for remedying the breach and recovering any losses. A litigation lawyer will often start the case by sending a letter to your employer seeking a settlement to resolve the breach without a lawsuit. If the employer accepts that the breach was unjustified and unexcused, your lawyer can negotiate a settlement.

However, in many cases, the employer will raise defenses against the breach, such as the following:

• The contract is invalid due to a legal defect in its formation.
• The contract is unenforceable.
• The employee breached first.

The difference between invalid and unenforceable contracts is subtle. Generally, a contract is invalid when the parties fail to reach an agreement. For example, if the employer offered $1,000 per week and the worker emailed a response accepting work for $1,200 per week, the parties never formed a contract.

Conversely, an unenforceable contract happens when the contract is valid, but the court chooses not to enforce it. A contract for a “fair weekly wage” might be valid, for instance, but too vague for a court to enforce its terms.

Legal Remedies and Possible Outcomes

Under business law, the remedies for a breach of employment contract can include damages. These damages include whatever you expected to earn from the contract. Specifically, you can seek damages in a lawsuit to cover these losses:

• Back wages that you were not paid
• Front wages that you would have been paid
• Job search costs

Your remedies might also include any consequential damages, like your time and fuel commuting to the job that you were unable to perform.

You can seek a court order to compel the other party to perform their duties under the contract. However, this remedy is rarely sought by workers after their employer breaches. In these cases, the employee is usually not interested in returning to their former job.

On the other hand, an employer might seek this remedy, also called specific performance, when the employee breaches and monetary damages cannot adequately compensate the company for its losses. For instance, specific performance might be sought when the employee is uniquely talented, such as a famous actor.

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