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Labor & Employment

Employment Contract Disputes

Employment contract disputes are not always started by the employee. An employer may be trying to stop a former manager from joining a competitor, while that manager is trying to collect severance the same company says was forfeited.

Reviewed

01 GUIDE

Employment Contract Disputes: what usually happens

Claims that come from each side

Employees often bring claims for severance, unpaid bonuses or commissions, equity, or termination without the notice or cause the contract required. Employers often seek to enforce noncompetition, nonsolicitation, or confidentiality clauses, sometimes with an emergency request for an injunction, or to recover repayment of a sign-on bonus or training costs. In New York, employment is at will unless a contract provides otherwise, so a claim usually depends on specific written terms or a clear promise. Repayment and stay-or-pay provisions have drawn legislative and regulatory attention, so the current rules should be checked before relying on one.

The clauses that decide where and how

Before reaching the merits, these disputes often turn on procedural clauses. An arbitration clause can send the matter to a private forum. A choice-of-law clause may point to another state's law, and a forum selection clause may require filing in a particular court. Fee-shifting provisions can affect the economics of the case. If the dispute involves a covenant, New York courts usually ask whether the restriction is reasonable and tied to a legitimate business interest, and they may enforce it only in part. If an injunction is sought, the timeline can compress into days, so the papers need attention right away.

Moving toward a resolution

Bring the agreement, any amendments, the offer letter, plan documents for bonuses or equity, and the communications around the separation. We look at what each side is claiming, which clauses control the forum and the governing law, and whether the issue can be resolved through negotiation before litigation costs build. Many of these disputes settle with a revised separation agreement, a narrower covenant, or an agreed payment schedule. Where that is not possible, we prepare for the forum the contract points to.

02 ATTORNEYS

Who you would be working with

Attorneys at our New York and Washington, D.C. offices handle matters like this one.

05 HOW WE WORK

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06 OFFICES

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Attorney Advertising. This page is general information about employment contract disputes and is not legal advice. Reading it does not create an attorney-client relationship. Outcomes depend on the facts of each matter, and prior results do not guarantee a similar outcome. Laws differ by state and change over time.