Can I break a contract with employment agency without paying them money?
Get Legal Help Today
Compare Quotes From Top Companies and Save
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
compensation?
Asked on March 3, 2019 under Employment Labor Law, Alaska
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 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 AttorneyPages.com 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.