If I resign from a position, can an employer obligate me to complete the terms of contract?

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If I resign from a position, can an employer obligate me to complete the terms of contract?

If I signed a contract with my employer stating that I would work for them for the next year, yet I decide to resign before the year is up, am I obligated to fulfill the terms of the contract? Even if they they have not invested any money in me or paid me any money in advance? What could possibly happen if I decide to breach the contract? I’m up for renewing my contract. If they can, in fact, hold this contract against me what could possibly happen if I refused to sign a renewing contract binding me to a specific period of time? Can I be fired for not signing it when the year is up?

Asked on April 28, 2012 under Employment Labor Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Contracts are enforceable. When one party breaches a contract, the other party may sue for the losses, costs, or damages which are the foreseeable result of that breach. If you signed a one-year employment contract, but quit or resign before the year is up, your employer could potentially sue you for one or more of the following:

1) The cost to bring in a temp, freelancer, or contractor to do your work, to the extent that is greater than your salary plus benefits.

2) For some or all of any recruiter fee or signing bonus paid to you, or for or all of such costs necessary to bring on a new employee. (The closer you are to the end of your contract, the less they could recover in this regard, since they might have to re-recruit when your year is up anyway; see below).

3) If they lost sales or profits as a direct and provable result of you not being there to complete some project you were in the middle of, they may be able to claim for some of those losses.

You are not obligated to renew a contract--so once you contract is up, you do not need to re-sign. However, if you choose to not sign, your employer could certainly terminate you if it chose--without an employment contract, you are an employee at will, who may be fired at any time, for any reason.


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