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The 3 ways employees can be in breach of contract

On Behalf of | Dec 19, 2023 | Employment Law

In Alaska’s corporate scene, a common issue is employees breaching their contracts. Compliance with a corporate contract is crucial. It ensures that every employee fulfills their roles to the company’s agreed-upon standard. When they violate this contract, they risk breaching it and harming the company in one way or another.

It’s important for employers to understand how this can happen to effectively protect their company.

Poor job performance

A common contract breach occurs when employees fail to perform their duties adequately. This could mean missing deadlines or producing subpar work. Companies should monitor performance, provide feedback and document issues. If poor performance continues, employers may consider termination. However, they must ensure that this issue revolves around performance, not discrimination.

Breaking confidentiality or non-compete clauses

Employees breach contracts by not respecting confidentiality or non-compete clauses. These clauses protect company secrets and stop employees from joining competitors after they leave. If employees violate these clauses, employers can seek an injunction to prevent the employee from continuing to work for the competitor. To avoid this, ensure employees sign and understand these agreements and their obligations.

Resigning without prior notice

Another form of contract breach is when employees resign without notice. Typically, employees must give two weeks’ notice unless their contract specifies otherwise. If employees quit without warning, it could be considered a breach of contract. To manage this, companies should have a clear resignation policy, communicate openly and plan for contingencies.

High turnovers are costly and damaging to a company

High turnover rates resulting from termination or unapproved absences can disrupt company culture and incur costs. It’s important to remind employees regularly about their contractual obligations to avoid such consequences. Nobody wants to lose a valuable employee, so effective contract compliance management can help maintain a healthy company culture and reduce replacement costs. Companies should consider consulting with an attorney experienced in employment law to ensure no mistakes are made when handling breach of contract cases.