Breach of contract occurs when one of the parties to a formal agreement does not do what they promised to do according to the terms of the agreement. It is the source of many disputes in corporate law and employment law; the Minnesota civil courts rule on many breach of contract cases each year. Sometimes, resolving a breach of contract is as simple as contacting the other party to notify them that they have failed to follow the terms of the contract and ask them to correct their actions, such as by paying the money they promised to pay. In other cases, resolving breach of contract cases is more complicated, requiring arbitration or even a trial. Even if you are sure that you do not want to go to court about your breach of contract dispute, you can resolve it more easily by working with HKM Employment Attorneys LLP in Minneapolis.
What is Breach of Contract?
The contracts that employers and employees sign at the beginning of a period of employment are legally binding. These are some of the matters they cover:
- When the contract period begins and ends and whether it is renewable
- The employee’s job duties
- Compensation the employer will pay the employee, including salary, paid leave, and bonuses
- Requirements for early termination of the contract (such as written notice or financial penalties)
- How the parties will resolve disputes related to the contract (such as through arbitration or the courts of Minnesota)
If one party does not abide by the obligations they promised to fulfill in the contract, and if they do not remedy the problem reasonably quickly after becoming aware of it, that party is said to be in breach of contract. If your employer does not fulfill their contractual obligations to you, or if you are unable to do the things your employment contract requires, a Minneapolis employment lawyer can help you resolve the dispute.
The statute of limitations for breach of contracts in Minnesota is six years, beginning when the breach occurred. It is not always easy to determine when the breach started, but your employment lawyer can help you figure it out.
Important Questions to Ask Before Filing a Breach of Contract Lawsuit
If you are thinking of suing your employer for breach of contract, these are some questions your Minneapolis employment attorney will want to discuss with you at your first meeting:
- Did you and your employer sign a formal, legally binding contract?
- What are the rights and obligations of each party according to the contract?
- Were there amendments to the contract after you originally signed it, and did both parties agree in writing to the amendments?
- When did the breach begin?
- Is the breach so serious that it invalidates the entire contract, or can it be fixed, allowing the contractual relationship to continue?
- Which party suffered financial losses because of the breach, and how much were those losses?
- Did the party that breached the contract have a legally valid reason for doing so?
Non-Compete Clauses in Breach of Contract Disputes
Many breach of contract disputes relate to non-compete clauses in employment contracts. A non-compete clause says that, for a certain period of time after the contract period ends, the employee cannot engage in business activities that directly compete with the employer. These activities could include working for another company that engages in the same kind of business or opening a new company that performs services similar to those provided by the former employer. Non-compete clauses can be a thorny subject, and courts must decide, on a case-by-case basis, whether they are fair and therefore enforceable. (Along similar lines, couples are free to sign prenuptial agreements and set the terms of these agreements, but a divorce court can refuse to enforce the agreement if it considers the agreement unfair.)
On the one hand, employers have the right to protect their proprietary information, such as contact lists and trade secrets. (They can also do this through other means, such as requiring employees to use a company-issued computer, which they must return at the end of the contract period; non-compete clauses are not the only way to protect the company’s confidential information.) Meanwhile, it is not fair to employees if the employer makes the non-compete clause excessively restrictive so that the employee can never work in the same industry in Minnesota after finishing their term of employment with the employer. Your employer cannot coerce you into continuing to work for them by saying, ‘You’ll never work in this town again.” A Minnesota employment lawyer can help you decide whether a non-compete clause in an employment contract that you have signed or are considering signing is unfairly restrictive. While Minnesota law does not prohibit non-compete agreements between employers and employees, Minnesota case law consistently shows courts siding with employees in non-compete clause disputes.
Force Majeure Clauses in Minnesota Breach of Contract Lawsuits
Sometimes one or both parties to a contract are unable to meet their contractual obligations for reasons completely outside their control. Many employment contracts have force majeure clauses that address this issue; force majeure is a French phrase that means “superior strength.” A force majeure event is a non-preventable event so major that, if the parties cannot fulfill their contractual obligations because of it, they are protected from liability for breach of contract. Examples of force majeure events include wars and natural disasters. The COVID-19 pandemic disrupted the plans of businesses throughout the world, and some of them invoked force majeure clauses when they were unable to pay their employees what they had promised in the contracts they signed before the pandemic.
Contact HKM Employment Attorneys LLP
If your employment contract turned out to be a bait and switch, a breach of contract lawsuit might be the best solution. Likewise, if your former employer is arguing that your post-employment career moves violate a non-compete clause in the employment contract you signed, a lawyer can help you determine whether those claims are valid. In general, if you are at odds with your current or former employer about the terms of an employment contract, the logical next step is to contact HKM Employment Attorneys LLP in Minneapolis, Minnesota.
