An employment contract establishes the most important details of the relationship between an employer and an employee. It is a legally binding document that generally benefits both parties. The employment contract clarifies what the responsibilities of each party are and gives stability to both. However, if the employee wants to end his relationship with the employer, the stability provided by an employment contract could also be an issue. It is essential that you bear in mind that the other party could sue you and demand financial compensation if you unjustifiably terminate the contract prematurely.
Steps
Method 1 of 3: Determine the legal obligations under the contract
Step 1. Define if you have an employment contract
Although you may have a written employment contract, in some states certain contracts may be implicit. For example, if your employer has an employee manual, under the laws of some states, this could create a binding contract, implicitly.
If you do not have an employment contract, you will be an employee at will, which means that you could be fired for any reason, or no reason, as long as it is not an illegal dismissal. For example, racial profiling could be an illegal reason to fire an employee at will
Step 2. Read your employment contract
You may not have read the entire contract when you signed it; however, you will have to do so anyway if you plan to terminate it. Read the entire contract, but pay close attention to the clauses related to its resolution or termination, as well as any other section that refers to the termination of the employment relationship.
Step 3. Determine if any of the causes for termination (of any of the parties) that are listed in the contract are presented
If the party who wants to terminate the contract early does not have a legally valid reason to terminate it, the other party may sue. The result of the lawsuit could be an order to pay compensation for the termination of the contract or other related damages.
- Some employment contracts include a termination clause in the event the employee becomes incapacitated or is not physically capable of fulfilling the obligations under said document.
- In the contract there could also be provisions that cancel it in case one of the parties does not comply with the agreement. For example, if the employer agrees to pay the employee $ 500.00 when he completes a certain action and then fails to pay him, then the employee could have valid justification for terminating the contract.
- There could be a possibility of early termination of the contract if the employee notifies the employer in advance or pays a predetermined amount of money. Although you may have to pay a financial penalty for early termination, paying the full amount set forth in the contract could prevent the employer from suing you for breaching the contract.
Step 4. Determine if there are any penalties or repercussions for early termination of the contract
For example, an employment contract might require the party who violates the agreement to pay certain costs or compensation. Another common provision in employment contracts is that if it ends prematurely, the employee cannot work in companies of the same category, within the local area, for a specified period of time. You will have to determine, based on the provisions of the contract, if it is worth bearing those legal, financial and professional consequences.
Step 5. Verify the validity of the contract
Some contracts contain a provision that establishes both the effective date and the effective date. If you've worked with the other party for a long time, the contract may have expired. In that case, you would no longer be bound by its terms and would be free to go.
Method 2 of 3: Assess the legal grounds for terminating the contract
Step 1. Determine if the negotiations that led to the signing of the contract could be grounds for nullity
There are some situations in which you could show that your employment contract is null or unenforceable. If there were some specific factors that caused you to sign the contract, you may have reasons to legally terminate it. For example, if the employer promised you certain benefits and then refuses to give them, you could have reasons to end the contract.
- If the other party fraudulently induced you to sign the contract, you may have legal grounds to terminate it without penalty. Fraudulent negotiations void the contract. For example, if the employer lies to a potential employee to sign a contract, it will be void. If the employer told you that you would be paid $ 20 per hour and, after signing the contract, they only pay you $ 10; then, you most likely have arguments to terminate the contract.
- The contract will also be void if both parties make a common mistake about some essential information. For example, an error would occur if you believed that you signed a contract to work in a certain location and the employer assumed that you would work primarily from a more remote location.
- If one of the parties is in a superior position to the other when negotiating the contract, this could lead to undue conditioning. This is another factor that could void the contract. This commonly occurs when the employee negotiates with the employer, since the latter's bargaining position is often far superior to that of the employee.
- A contract could contain provisions so irrational that they automatically void it. This occurs when the unilateralism or the injustice of its terms invalidate it. For example, the employment contract could be annulled if it required the employee to work probation for a month, without receiving remuneration.
Step 2. Evaluate whether it requires a valid legal reason to terminate or terminate the contract
For a contract to be enforceable, some states require that it be in writing and have a defined term; if you don't have these items, it could be overridden. Also, even if the contract does not have an applicable provision allowing it to be terminated, there may be other reasons why you could legally terminate it. For example, if the terms of the employment contract are very vague or if they are illegal in any way, then you would have arguments to terminate it legally.
- For example, unenforceable contracts can be terminated. For a contract to be considered "unenforceable", it is not enough that it is simply difficult to fulfill, but that carrying out its terms must be impossible. For example, in the event that an employer hires an employee to work in its car wash business and it goes bankrupt, it would be impossible for the employee to work in that business; therefore, the employment contract would be terminated.
- The breach of one of the parties could justify the breach of the other party of the employment contract. Non-compliance occurs when one of the parties does not fulfill the obligations under the contract. A typical breach of employment contracts occurs when the employer does not pay the employee the agreed amount or does not do so at the agreed time. This kind of breach not only allows the employee to terminate the contract, but could also give you a reason to sue your employer for damages.
- The signing of an employment contract requires that both parties treat each other fairly. This is commonly known as the "good faith and fair dealing pact." If one of the parties is unfair to the other, then it may have violated this legal obligation, which could be a reason to terminate the contract. For example, if the parties agree that the employee should start working as a store manager on January 1, but ultimately the store does not open until after nine months, the employee will have a valid reason to terminate the contract. It would be unfair to expect the employee to neither work nor collect for nine months.
Step 3. Consult with an attorney
You can consult with an attorney if you are unsure whether you owe the other party money or whether you could be sued for terminating the contract. A qualified and experienced labor lawyer will best advise you on the consequences of terminating the employment contract; It could also help you determine if there is any way you can end the contract and avoid such repercussions.
Method 3 of 3: Negotiate and terminate the contract
Step 1. Ask yourself if the other party would agree to end the contract
If your current work situation does not satisfy you, keep in mind that the other party may not be happy either. If both parties agree, they could terminate the contract and release their obligations under it. Mutual dissent is often the best scenario to terminate an employment contract early.
Step 2. Determine how far in advance you should give advance notice, if necessary
You will have to review the contract again to determine what is the notice period that you must give the other party before terminating the contract, if any. The typical time frame is two weeks, but this could vary from contract to contract. If applicable, consider any accrued vacation period in your calculation. If you do not give the required notice, you could be financially responsible for the termination of the contract against the other party.
Step 3. Negotiate the terms of the contract
If your employer is not as eager as you are to terminate the contract, to convince him of an early termination without negative consequences, you will have to negotiate the terms of the termination. For example, you could give him a deadline to find a replacement or stay to train a new employee or offer him a severance package. These kinds of negotiations could help you end the contract on good terms for both parties.
Step 4. Negotiate through a conciliator
Sometimes the help of a conciliator or neutral third party could help you negotiate the termination terms of a contract. This is a much cheaper alternative to going to court and litigating; In addition, this alternative could help you reach a resolution agreement that is acceptable to both parties and satisfies them.