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What remedies exist following a breach of contract?

As a Pennsylvania employer, a time may come when one of your employees fails to uphold his or her contractual obligations. Such obligations might include failing to complete a job within a predetermined period, failing to perform a job as obligated or breaching a non-compete clause.

Whether you have any recourse as an employer, per Findlaw, generally comes down to whether the breach of contract that occurs is considered "material" or "immaterial" in nature. If the breach is material, then you may be able to move forward with pursuing a solution. If you try and work things out with your employee to no avail, you may want to have your attorney send what is commonly known as a demand letter or a cease and desist letter, depending upon the particular situation, before you move on to filing a lawsuit against the employee.

There are three main remedies for a breach of contract, and these include damages, specific performance and restitution. Damages awarded might be compensatory, punitive, nominal or liquidated, depending on the specifics of your cases, but damages are the most common remedy for a contract breach.

In some breach of contract matters, you may be able to seek a remedy referred to as "specific performance." This is rare and only available where typical monetary damages may not adequately compensate for what you lost.  However, a court will not order a person to specifically perform an action or continue working, so generally specific performance is not available in employment cases.  What may be available though is an injunction, an order to stop an employee's behavior if they are breaching the contract and harming your business.

A third and final remedy involves cancellation and restitution. Cancellation involves canceling the contract entirely, after which you may be able to sue your contract-breaching employee for restitution.

Employment contracts can be important for key employees or those who have access to vital information but they are not necessarily right for every employee as they obligate not only the employee but the company.  When an employee breaches a contract action needs to be carefully considered and then swiftly taken to maximize effectiveness.  The attorneys at Kisner Law Firm can assist with determining when employment contracts are necessary, draft effective and enforceable contracts and how to best pursue any remedies if a material breach does occur.

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