In Arizona, most employees at private organizations are “at will” employees. They can quit at any time—or be laid off at any time. But some people have an employment contract that outlines the terms of their employment and under what circumstances their employment can end. If either the employee or the employer violates the terms of this contract, there may be a case for a breach of employment contract. Here’s what you should know.
Disclaimer: Please note that this article is not intended to be legal advice. You should always talk to a Phoenix employment contract lawyer about your unique situation.
What are the most common types of employment contracts?
Most Arizona employees in private organizations are “at will” employees. This means the employee can quit at any time and the employer can lay off the employee at any time.
At-will employees may have a contract that specifies certain terms of their job, but maintains the employee’s at-will status. Some jobs define the position description, length of employment, and related terms in a contract that dictates the relationship between employee and employer in an official employment contract. Employment contracts generally outline the terms of employment, job duties, reasons to terminate employment, provisions for health insurance, sick and vacation days, and other specific employment terms.
To be legally binding, an employment contract must be in writing and signed by both employer and employee (per A.R.S. §23-1501).
How does a contract work in Arizona?
Before discussing how an employment breach of contract might occur, it’s important to define what a contract is in Arizona. A contract is an agreement entered into between two (or more) parties under mutually agreeable terms and conditions. A contract has to include these three parts.
An offer can be written or verbal, under Arizona law. This statement presents something for sale, barter, lease, trade, etc. In the case of employment contracts, the offer is most often for employment with the length and payments terms outlined.
Acceptance can be a signature, or it may be a verbal acceptance when permitted under Arizona law, or it can be by performance.
Consideration is what will be exchanged between the parties to the agreement and is a critical part of any contract. In terms of an employment contract, it generally includes the employer’s promise to pay the employee and the employee’s promise to perform the job duties related to their position.
Verbal or written
Although Arizona law allows for verbal contracts in some cases, some contracts must be written to be considered valid. A.R.S. §44-101 outlines the types of contracts that must be in writing to be valid. A.R.S. §23-1501 notes that an employment contract must be a written agreement.
How does a breach of employment contract occur?
Breach of contract in Arizona can occur when one of the parties fails to fulfill their part of the contract (in whole or in part) or when one party prevents the other party from fulfilling the contract.
When there’s an employment contract in place, the employer may fire an employee for failing to uphold their end of the agreement. All Arizona laws regarding payment of final wages still apply, except when there is a wage dispute. In this case, an employer may withhold only the amount of wages under dispute until the conflict is resolved.
A breach of contract can also occur if the employer does not fulfill the contract requirements. In this case, the employee may be able to seek damages. This is a complex undertaking, however, and should always be done under the guidance of an attorney well-versed in contract law.
What about wrongful termination?
According to A.R.S. §23-1501, a breach of employment contract can occur when one party fails to live up to their agreement in a contract, or an employer terminates an employee for reasons that are not provided for in the employment contract or are protected by state or federal laws.
This is considered wrongful termination, and may include:
– Retaliation by the employee for refusing to commit an act or omit something that results in a violation of the Constitution of Arizona
– Violation of an employee’s civil rights
– Retaliation for workers’ compensation claims
– Retaliation for “whistleblower” actions
– Jury service (A.R.S. §21-236)
– Exercise of voting rights (A.R.S. §16-1012)
– Non-membership in a labor organization (A.R.S. §23-1302)
What can I do about a breach of employment contract?
An employment contract may be breached in whole or in part. Either type of breach may be a material breach. This is a breach that results in one of the parties not receiving the benefits of the bargain. Only material breaches are actionable. In addition, a mere expression of intent to materially breach an employment contract may also be actionable. This is known as an anticipatory breach.
Whether you are an employer or an employee, the first step is to evaluate whether someone has breached the contract. In order to do this, you have to look at the following aspects of a breach of contract claim:
– Formation of the contract
– Enforceable terms
– Failure to perform
– Consequences of the breach—material or otherwise
– What kinds of damages you have suffered and can recover
Evaluating the contract to make sure it is actually a legally binding agreement is important. If it is not, there may be no breach of employment contract by either party.
Once you determine that the contract is legal, you must determine if the action in question is a specific breach of an enforceable requirement. For example, do the payment terms specify a commission that is not being paid to the employee? Or is the employee not meeting specific, written sales targets to earn that commission? These are measurable and enforceable terms, so failure to meet them could qualify as a breach of contract.
Is it worth it?
Once you determine that the contract is legal, is enforceable, and has been breached, you need to determine if the consequences are worth the pursuit of damages. Maybe the damages due to the breach are nominal, and further legal action is more trouble or costly than it’s worth.
In some cases, an employment breach of contract may be worth litigating. For example, suppose that the breach damages the employer’s reputation. Or maybe an employment breach of contract results in significant financial damage for an employee or employer. In these cases, working with a lawyer who has specific employment contract experience can help you learn more about your options.
Getting help with the process
Seeking damages for a breach of employment is a complicated process. It’s important to seek qualified legal help so you can understand Arizona employee rights and Arizona employer rights. A Phoenix employment contract lawyer can help.
If you are experiencing issues with an Arizona breach of employment contract and need some answers, get in touch with ARTEMiS Law Firm. Our skilled and experienced contract and business attorneys can help you make sense of your rights and responsibilities under the law.Contact Us