Should I allow my employer to pursue liquidated damages?

Employee is currently under 1 year contract to work for employer. After four years of employment with this company and signing four seperate one year agreements, employee has finally found another job in a different field. The employee is not violating the contracts specific non compete as they are not going to a competitor nor are they even staying in the business. After turning in the notice the employer is demanding liquidated damages to terminate the contract. There is a liquidated damages provision in the contract allowing a certain percentage of employees salary for breaking the contract. Employee just wants to leave their job. Employer is demanding 10% of employees annual salary. Is it legal to enforce such a pentalty to the employee? The only other way the employee could leave the company is to wait until the end of the contract and try to line up work, but in this economy that's very difficult and could result in months or years of unemployment. Employee feels that employer is trying to use their power to extort money. Should the employee try to get the number down and "settle" on something or simply let the employer come after them and hope that the court rules in favor of the employee?

1 answer  |  asked Nov 3, 2010 07:51 AM [EST]  |  applies to Ohio

Answers (1)

Neil Rubin
"Allowing [your] employer to pursue liquidated damages" is not really your call. If the agreement is written correctly, this is not an illegal provision. If your employer sues you, depending on your salary, this could be a very expensive dispute. I recommend you hire an attorney to review the contract to give you a legal opinion and the options available.

posted by Neil Rubin  |  Nov 3, 2010 08:03 AM [EST]

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