Can I break a contract with employment agency without paying them money?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 1, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can I break a contract with employment agency without paying them money?

I signed a contract with employment agency that states if I did not work with their client company for at least

3 months then will have to pay a fee equivalent to 1 month’s salary. Is this considered as penalty clause or


Asked on March 3, 2019 under Employment Labor Law, Alaska


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The amount you describe may be unenforceable as excessive. One your state's laws (Alaska Statutes or AS Section 45.02.718, "Liquidation or Limitation of Damges") says that:
"(a) Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty."A month of salary under the circumstances you describe is far in excess of the loss the agency would suffer, as adjusted by any issues in proving the loss (of which there probably are few or none--this is a straightforward matter) or the "nonfeasibility of a remedy"--since there is nothing nonfeasible about a claim for a monetary loss. As such, this is likely an unenforceable penalty.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption