A cartoon computer displaying a termination message.
Breach of contract under employment law depends very much on the type of employment that is involved. There is no one standard rule defining breach for every job that exists. Knowing how the different rules work helps in responding to the breach and understanding what options exist for the affected employee and employer.
Contract Employment
A contract employee is one who works for an employer under specific conditions laid out in a contract or agreement. This type of hiring tends to be for specific purposes and provides in return specific benefits. Since the employer has brought on the employee under such conditions, the business is obligated to honor the contract terms. Failure to do so can be a violation or breach of contract.
The type of violation will determine if the breach is material (serious) or minor. If it is minor, the remedy can simply be to relieve the employee of his obligation in trade for what the employer failed to do. Otherwise, the employee can get some kind of compensation for the loss if there is one.
If it is a material breach, very likely the issue is so serious that the contract can't continue. For example, an employer might fail to pay the contract worker on time. The employee would be well within his rights not to do anything more until he is paid for services already provided.
Labor Bargaining Agreements
Very often in large organizations, contracts are struck between bargaining groups that represent all the rank-and-file employees and the business's management. These bargaining agreements detail how just about every situation should be treated to protect employees from unfair treatment. In addition, they guarantee certain pay levels and benefits if employees meet performance requirements.
When management violates these agreements, the bargaining representative for the employees may present a grievance to the management representative. If the issue can't be resolved through the grievance process, the bargaining group can either refuse to work (go on strike), demand a change but continue to work, go to court to enforce the agreement, or renegotiate the agreement with management.
Discrimination
Under the federal laws guaranteeing equal employment opportunity, employers may not discriminate against, transfer, demote or fire employees based on their race, religion, physical condition or gender. According an employee unfavorable treatment on these grounds constitutes a breach of contract under federal law, even in at-will employment situations. Significant penalties can be imposed on the business and its management for doing so.
At-Will Employment
At-will employment is based on an implied agreement between an employer and an employee that either party can break the working relationship at any time, with no obligation to give a reason. Either the employer or the employee can walk away from the agreement without any strings attached. If you're hired as an at-will employee and two months later your employer lays you off, there is no breach of contract. You have no ground to fight the issue unless you can show you were illegally discriminated against. Most employment is on an at-will basis.
Temporary Employment
Those who obtain temporary work through a temp agency or placement company don't really have a contract with the business where they work at all. Instead, the temp agency hires the employee under an at-will contract and places that person in a business for a fee. The temp agency then takes a commission from the fee as its profit and the remainder goes the employee. If the business chooses to end the worker's engagement, there is no breach of contract per se. Instead, the temp agency then has to place the worker in a new job as another business needs temporary help. However, the temp agency still has an obligation to protect the temp worker from any illegal work treatment, discrimination or illegal harassment.
