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I am looking for a change in employment and my current contract have clause , i.e. payment of $50,000 in case I do not work for ~4000 hs (which is the term of the contract). Is this clause a valid one and can the company come behind me legally in case i break the contract without clocking the specified hours..
Optional Information: State/Country relating to question: Alabama Already Tried: Nothing, wanted to take an opinion before I decide..
Hi, Mike, and Welcome to JustAnswer. Thank you for your question. My name isXXXXX am an Attorney and would be glad to help, I am sorry to hear about your employment situationIf both you and the employer signed this Employment Agreement and there are no terms of conditions which would violate public policy, then unfortunately, you will be liable to your present employer, if you leave before the term of employment expires, At first glance, it might look as if your present employer has you locked in for a very long time and that would have violated public policy, but when I took the number of hours that the Employment Agreement requires you to work, divided those 4000, and divided it by a typical 40-Hour work week, it amounts to less than two (2) years, actually, it amounts to 1.92 years, to be exact, and this would not violate any public policy. If the new position you will find is a very good one, one that you would not want to pass up, you might consider negotiating with your present employer to pay a lesser amoun than the $50,000 in order to have the employer sign a Release, thereby Releasing you from the Employment Agreement. If you find a new position and the company is very large, they might even be willing to contribute some money to be added to what you would have to pay your employer for the signed Release,
If you need clarification, please let me know by pressing the "Reply" button,
Thank you for allowing me to be of service,
ANDREA
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Hi Andrea, Thanks for your response. However, to understand this better, would be great if you could help me with the following
1. Does this mean Alabama labor law does not restrict an employer from including a Termination fee for voluntary break of contract (i.e. early termination of contract)?
2. Is there a specifc section / clause laid down by Alabama Department of Labor which refers to such instances of termination
3. What recourse an employee has in such instances
4. Have you come across similar instances where employee had to pay termination fees
5. I am looking for an employment in the State of California and I have heard that Claifornia Labor laws are employee friendly. Is such a termination fee clause legally enforceable by an employer in CA? Thiswill help me decide in case I come across similar clause with a new employer.
Thanks
Hi, Mike, Thankyou for your follow up questionsIt might help me explain and clarify these questions if you told me what type of work you do for your present employerThank you, ANDREA
Andrea, I provide therepy services to skilled nursing facilities through my current employer. Hope this helps
Thanks.
Hi, Mike, Thank you for your follow up questions,
1. The amount which you refer to as "TerminationFee" is more likely described in the Employment Agreement
As"Liqudated Damages. Parties can agree toset an amount as Liquidated Damages. There is no law or
Statutein Alabama that would restrict anemployer from charging any amount. My Answerwould be the
same,even if it were a deposit instead of something else. 2. Not Applicable 3. An employee does not have anyrecourse against an employer if this is includedin the Employment Agreement because
A. It is not illegalB. Employees sign these Agreements allthe time of their own free will. If theydid not understand anything in the Agreement, they should not have signed it.
4. Liquidated Damage clauses in Employment Agreements are very common andthey are eforcible by the Court. Thebases of their legality are many, but one of the most important reasons isbecause when an employer hires an employee who has specializedtraining, or the employer trains the employee hiself and at his exense, he doesnot want to see the employee just get up and leave and go to another employerbefore the first employer saw a returnon the investment he made in theemployee. 5. It would be an inaccurate statement to say the laws of one State are more favorable to employees than the laws of another State. A blanket statement likethat cannot be made because it would not be accurate. It would have to be on a particular topic, or issue, and then compare the laws of each State on that topic or issue to determine if the laws of California are more slanted towards the employee on that particular topic or issue.
Andrea, Thanks for the explanation for each of the point. The only missing information was on the legality of similar clause in the state of California.
My understanding based on what you have said is that, if an employee agrees to such termination fee / liquadated damages as part of teh contract (irrespective of the state / juridiction), it is legally enforceable. Am i correct? Please confirm.
Hi, Mike, We must be having technical problems because I posted my Answer to this question this morning, Please accept my apology Yes, your understanding is correct. This is fairly common in employment, even in California, This is not as bad as it sounds. It seems restrictive to you, but most employees wish they ad written Employment Agreements with teir employer ad it gives them job security, The employer is also bound by the terms of the Employment Agreement and cannot terminate the employee, If you need further clarification, please let me know and I will be glad to explain further
Thank you once again for allowig me to be of service, ANDREA
Please remember to RATE my answer only when you are 100% satisfied that I have Answered your question. Not whether it supports your position. I hope that you can Rate my Answer as "Great Service". Remember: If you give any rating below 3 stars then I will not be paid anything for my time and effort in researching your question and furnishing you with an Answer and information. IF you feel the need to click either "Helped a little" or "I expected more", please stop and reply to me via the REPLY or CONTINUE CONVERSATION button with the issue you have. I will be happy to continue further and do everything I can to provide you with the service you seek.
Hi Andrea, Thanks for your assistance with this question and I really appreciate your great service. Sorry I could not respond earlier and until now, the "reply to" option was not working me.
The one last related question I have is on the employer's option to terminate. The current contract primarily talks of (A) Voluntary Termination (i.e. if the employee terminates the contract before completing the stipulated hous) and (B) 'termination for cause' by employer (i.e. instances such as non compliance in performance as per the terms of the contract, convicted of fellony charge, dishonesty and similar such occurances) in which case as well the employee need to reimburse expenses, fees and other costs incurred by employer.
Does the above clause , primarily "termination for cause" by employer stand the test in a court of law.
Once again, I thank your efforts and will close hopefully close this postitively once I have a firm reply from you.
These clauses have withstood Court scrutiny and have held up being legal
Experience: 25 yrs Employment Law, Real Estate & Business Law, Family Law, Criminal Defense, Immigration