Contracts are the foundation of every employer-employee relationship. They can be used to establish the expectations of both parties and ensure each is aware of their obligations. From specifying the duration and terms of the working relationship to promising severance pay, employment contracts can provide protections to both the employer and employee. However, an employer may not always abide by the terms of the agreement they entered into with the employee — this is called a breach of contract.

Importantly, a breach of contract doesn’t always require that an employer failed to uphold every provision in the agreement. There are many different types of breach of contract, including the following:

Material Breach of Contract

A material breach of contract occurs when one party fails to perform a central duty to the contract. This is the most serious type of violation and effectively stops the agreement from moving forward. To determine whether a material breach of contract occurred, an Ohio court would evaluate whether the party’s failure to fulfill their contractual obligations substantially defeats the purpose of the agreement.

Examples of a material breach of an employment contract can include the following:

• Failure to pay the agreed-upon wages or bonuses to the employee
• Failure to provide the specified financial benefits specified in the contract
• Reducing the employee’s pay without their consent
• Eliminating the employee’s benefits without their consent
• Failing to provide the promised severance pay or benefits

Depending on the circumstances, wrongful termination may also be the basis for a breach of contract claim in Ohio. Critically, an employer can also accuse an employee of a material breach of an employment contract. For instance, repeated unauthorized absences and failure to meet performance standards to the extent that they are far below the agreed-upon standard may be considered a material breach. Common causes of an employee’s breach can include unclear or ambiguous contractual language, overly broad terms, or a contract that is unfairly one-sided in favor of the employer.

Minor Breach of Contract

The second most common type of breach of contract is a minor breach. In contrast with a material breach of contract, a minor breach can occur when either party fails to perform a small part of the contract — this is also referred to as a “partial” breach. In these instances, the overall intent of the contract is not undermined, but certain aspects of the agreement are not fulfilled.

A minor breach of an employment contract can come in the form of small deviations to the terms of the agreement, such as a late payment of an agreed-upon wage or bonus or a delay in providing a promised employment benefit. Unlike with a material breach, a minor breach doesn’t usually allow either party to cancel the contract. There is usually a remedy that can address a minor breach while allowing the contract to remain in effect.

Anticipatory Breach of Contract

Another type of breach of contract is an anticipatory breach, also referred to as “repudiation.” This occurs when one party expresses through their words or actions that they will not be fulfilling their contractual obligations — the breach does not need to have occurred yet. To constitute an anticipatory breach, the repudiation must be clear and unequivocal. An example of an anticipatory breach of an employment contract can include an employer indicating that they will not make payment or provide the benefits promised under the terms of the employment contract.

Actual Breach of Contract

An actual breach occurs when one party refuses to fully perform the provisions agreed upon in the contract. Specifically, this is a term that is used to describe when the breach occurred. While an anticipatory breach refers to an indication of a breach in the future, an actual breach means the failure to perform in accordance with the terms of the contract has already taken place.

What are Your Remedies for a Breach of Contract?

To bring a lawsuit for a breach, there are certain legal requirements that must be met. The injured party must typically demonstrate that a valid contract exists, and one party failed to fulfill an obligation under the terms of the agreement. They must also show that they suffered damages as a result of the breach.

An employee may be entitled to a wide range of damages if they can establish an employer’s breach of contract. While the specific remedy depends upon the circumstances of the breach and the terms of the agreement, an employee may be able to recover compensatory damages to cover their direct financial losses. This can include compensation for back pay, front pay, and loss of benefits. If monetary damages are inadequate, the court may issue an injunction or order the employer to perform the specific terms of the contract. There is a strict statute of limitations in Ohio to pursue legal action for a breach of employment contract. A lawsuit for breach of a written contract must be brought within six years from the date of the breach. The deadline to commence legal action for breach of an oral contract is four years.

Contact an Experienced Ohio Employment Attorney

If your employer breached an employment contract or accused you of doing so, it’s essential to have a knowledgeable attorney by your side who can protect your rights. Located in Westlake and providing reliable representation to clients throughout Ohio, the employment law attorneys of Lalak LLC represent employees for a wide range of employment matters, including all types of breach of contract. Contact Lalak LLC today to schedule a free, confidential, no-obligation consultation and learn how we can help.