Can I sue a former employer for breach of a labor contract?

UPDATED: Apr 12, 2011

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Can I sue a former employer for breach of a labor contract?

I entered into a contract with a NY based company to run their LA office. However 364 days into a 2 year employment contract they shuttered the west coast office. I received no severance, medical insurance benefits, or any of my remaining vacation days. The contract stated that we would agree to arbitration in NY. It’s coming up on 2 years so I will need to file ASAP. I’ve been busy launching a new company making 15k less a month as a salaried employee, been swimming in debt, and now my Dad passed away. So I am just finding the “bandwidth” to address a possible lawsuit now.

Asked on April 12, 2011 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

1) As a general rule, there is no obligation for a company to provide laid off employees with severance, medical insurance, or to pay out vacation days--these matters are usually governed by company policy and/or by an employment agreement with the employee(s). If you have a contract, the first thing to do is to look at what it says; if it's silent on the issue, then it is VERY likely that you will have no claim for severance (that's always completely voluntary) or continued medical benefits paid by the company (ditto), though you may be able to make out  a claim you were owed any remaining vacation days.

2) Depending on exactly what the contract says, you may or may not be able to sue for the salary, etc. you would have received for the remaining year. For example, if your contract was with the NY company and they simply happened to assign you to LA, you'd have a good case; in that situation, they might be expected to redeploy or transfer you. On the other hand, if the contract specified it was specifically to run the LA office and the LA office is closed, that might then constitute "impossibility"--can't employ you for a closed office--that let's them off the hook. If you're unsure of your rights, you should have an attorney review the contract and all other relevant documents, correspondence, etc. with you.

3) Arbitration clauses are generally enforceable.

4) Usually being busy in your life does NOT constitute valid grounds to delay taking action; the law does not care about your personal "bandwidth." If you still have time under the SOL, speak with an attorney and file *immediately* to protect your right to take action. Once it's too late, it's too late--it's very hard to get the courts to give you additional time.

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.

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