Executive Breach of Contract
Though Ohio is an “at-will” employment state, meaning that the default rule is a company can fire an executive or other employee at any time and for any reason (except unlawful reasons), executive professionals often negotiate employment contracts that protect them from the default “at will” rule.
What is a Breach of an Executive Employment Agreement in Columbus, Ohio?
Once an employment agreement is signed, a breach of the terms in the contract by either party can be grounds for a lawsuit. Employers may still terminate an executive’s employment before the end of the contract term, and in violation of the employment agreement. The employer may refuse to pay the severance or other benefits that are guaranteed in the agreement. Our experience executive contract attorneys have successfully represented clients throughout the state of Ohio in these situations.
Do executives receive severance pay if their employment is terminated without “cause?”
While employers typically retain the right to fire an executive under an employment agreement, even if no misconduct has been committed to warrant a termination, under such circumstances the employment agreement usually mandates the payment of severance that is equivalent to the executive’s compensation for a specified period of time (such as one year or through the remainder of the term of the contract or other agreed upon time period).
What is a termination for “cause” in Ohio?
Employment agreements typically provide for a severance payment if the executive is terminated without “cause.” Thus, the definition of “Cause” is crucial to a breach of executive employment agreement negotiation. It is usually defined to include the conviction of a felony crime, acts of dishonesty, engaging in fraud or other willful misconduct, and a failure or refusal to follow the lawful instructions of the board of directors or a senior officer. However, many contract define “cause” broadly and allow subjective reasoning and interpretation by the company in its “sole” discretion. These broad definition of “cause” can be problematic.
What is a “notice and opportunity to cure” provision?
Employment agreements often provide for notice from the employer of a “cause” incident or other breach of the agreement by the executive, along with a detailed description of the alleged misconduct committed by the executive so that the executive has an opportunity to cure the complained of conduct within a certain time period. Generally, if a “notice and opportunity to cure” provision is included within the employment agreement, an employer cannot fire the executive without first addressing give proper notice and opportunity to fix the breach. A failure by the employer to provide this before firing the executive can result in a material breach of the agreement.
What is a “wrongful termination” of an executive with an employment agreement?
Termination clauses may allow an employer to fire an executive only for the specific reasons that are laid out within the contract. In this situation, if the employer terminates an executive’s employment but fails to disclose the grounds for the termination, or provides a reason other than what the contract specifically allows for, the termination may be wrongful on the basis of a breach of contract.
How to Prove a Breach of Employment Contract Case in Ohio
In Ohio, an employee seeking to enforce an employment contract must prove (1) the existence of an employment contract, (2) that the employee materially performed their obligations, (3) that the employer failed to perform its obligations, and (4) that damages resulted from the employer’s failure to perform. The remedy is usually to receive the lost wages and other compensation that would have been received under the contract had it not been breached by the employer.
Can I Sue for Breach of Contract After Termination?
If you have an employment contract that we believe has been breached by your current or former employer, it is important to contact an experienced contract employment lawyer to review the contract and discuss your options. Typically, there is an opportunity to negotiate and resolve the matter without litigation. However, we are prepared to be aggressive throughout the process, including litigation, to get you what you deserve. Our Columbus, Ohio employment attorneys are experienced in litigating contract breaches for executives. Contact us at (614)610-4134.