San Marcos, California Employment Attorneys
At Stephen Danz and Associates we bring unparalleled experience and knowledge to employment law matters in Southern California. Specifically, our San Marcos employment law clients benefit from local attorneys who are knowledgeable in the local court system and have a commitment to the cases we handle on their behalf. California employees enjoy some of the most protected work environments in the country. Over the last 40 years, our attorneys have represented employees throughout California. Stephen Danz and Associates is proud to ensure that those who discriminate, harass or retaliate are served the penalties they deserve.
One of the most common areas that we handle is breach of employment contract by companies. Plaintiffs in this area are often management or executives. One of our attorneys will speak with you directly to ensure your employment law matter is efficiently and competently handled. We address issues of employee mistreatment and provide results-oriented representation. In addition, we represent whistleblowers and have the team and resources to take on those who suffer retaliation along with other employment law issues.
What Damages Are Available in Employment Breach of Contract?
First, the existence of an employment contract must be considered. Employment in California is presumed to be at will. Therefore, a plaintiff attempting to obtain damages for breach of an employment contract must first show that an agreement existed. An action for breach of contract can be based on a written, oral, or implied agreement and can arise in the context of wrongful termination, wrongful demotion, or failure to fulfill specific obligations or promises.
Examples of employment agreements that have been recognized by courts in California include:
- Express agreement, either oral or written, not to terminate except for good cause. One court upheld a 5-year employment “commitment” in written contract providing for termination only if attorney/employee engages in conduct described in labor code 2924 based on oral assurance of permanent employment.
- Implied agreement not to terminate except for good cause.
- Implied agreement not to demote except for good cause.
- Promise to hire, even when the employment would have been “at will.” For example, an employee’s reliance on promise to hire creates consideration necessary to create contract.
- Agreement to employ for a specified term.
- Agreement to pay stock options, commissions, or the like.
- Covenant of good faith and fair dealing.
Call us to discuss potential remedies and damages available once the existence and breach of a contract or covenant has been established. Please note that damages in employment law causes of action are contingent on the employee proving that adverse employment action was “substantially motivated” by a violation such as discrimination. At the same time, the employer’s liability is limited if the employer can prove that the employer would have taken the same action against the employee regardless.
How Do California Courts Measure Damages?
The basic measure of damages for breach of contract is the benefit of the bargain—the amount that will compensate the aggrieved party for “all the detriment proximately caused [by the breach], or which, in the ordinary course of things would be likely to result therefrom.” This law is based on the concept first established in Hadley v Baxendale (1854) 9 Ex 341, 156 Eng Rep 145, that contract damages are limited to those that naturally arise from the breach or that might have been reasonably foreseen by the parties at the time of contracting. Its goal is to put the aggrieved party in the same position that it would have been in had the other party fully performed. To be recoverable, damages resulting from a breached employment contract must be reasonably certain or foreseeable and clearly ascertainable.
How Have Employment Cases Been Handled in Relation to Compensation?
“The detriment proximately caused” in an employment case is generally determined by examining and combining all the items of recovery comprising the employee’s compensation and benefits for the agreed-on period of service, minus the amount that the employer proves the employee has earned or could have earned with a reasonable job search or with other mitigation efforts. This includes back pay (i.e., earnings and benefits from the time of the breach to the present) but it also can include front pay (i.e., the present value of lost earnings and benefits following the trial date) and prejudgment interest. Also, an employee may be able to obtain reliance damages for items such as relocation costs, loss of security, and loss of income associated with the relocation.
To Prove Damages, How Should they be Presented?
For damages to be awarded for breach of any contract, they must have been “proximately caused by” or “likely to result from” the breach. This means that they generally are limited to those that naturally would arise from the breach or that might have been reasonably foreseen by the parties at the time they contracted as the probable result of the breach.
How Should Damages Be Presented in Breach of Contract Cases?
Damages must be “clearly ascertainable in both their nature and origin” to be recovered for breach of contract. Generally, an employee’s base salary is a clearly ascertainable amount. Problems in proving damages to a reasonable certainty can arise, however, when valuing other items of compensation, such as possible future bonuses, promotions, or commissions the employee would have earned, or when determining how long the employee would have remained with the employer.
Certainty is more likely to be an issue when the contract is vague. A contract for a specific term that clearly details all compensation, including paid time off, commissions, and bonuses, provides the nature and origin of the damages. But if a contract is vague or if a claim is based on a breach of an implied covenant, we must look outside the document to prove the basis and origin of the damages. In addition, the nature of the damages must be calculable. For example, stock options may be provided for in a contract, but their value must be determined using economic principles and current realities.
In one court case, a plaintiff quit his job in reliance on an unfulfilled promise of employment and sued for promissory estoppel. Analogizing to lost profits cases, the court held that plaintiff could recover the lost future wages he would have expected to earn from his former employer but for the defendant’s promise—as long as the amount was not speculative, remote, or contingent and was supported by substantial evidence. The only limitation on plaintiff’s recovery is that the fact and extent of his lost future earnings must be proven with reasonable certainty. Once the plaintiff establishes damages with reasonable certainty, uncertainties as to their amount are resolved against the party causing the breach.