An employment contract may state the amount of liquidated damages to be paid if the contract is breached. Upon a party's breach, the other party will recover this amount of damages whether actual damages are more or less than the liquidated amount.
If the agreed-upon liquidated damage amount is unreasonable, the Court will hold the liquidated damage clause to be void as a penalty. If the Court declares the clause to be void, the employee would have to prove the actual damages.
Title: Understanding Mississippi Liquidated Damage Clause in Employment Contracts Addressing Employer Breach Introduction: An employment contract acts as a crucial legal agreement that outlines the rights and responsibilities of both employers and employees. Within a Mississippi employment contract, it is common to include a liquidated damage clause to address potential breaches by employers. Such clauses serve as a safeguard for employees, protecting them against financial harm caused by employer breaches. In Mississippi, there are different types of liquidated damage clauses that employers commonly incorporate into employment contracts. 1. Mississippi Liquidated Damage Clause Explained: A liquidated damage clause is a legally enforceable provision that predetermined determines the amount of money an employee will receive as compensation for specific types of employer breaches, such as wrongful termination, failure to pay wages, or violation of non-compete agreements. By including this clause, employers aim to limit their potential liability and ensure both parties are aware of the financial consequences that may result from a breach. 2. Types of Mississippi Liquidated Damage Clauses in Employment Contracts: a. Wage-related Liquidated Damages: — Unpaid Wages: This type of liquidated damage clause determines the amount of compensation an employee will receive if the employer fails to pay wages on time. — Wage Deductions: The clause sets specific penalties when an employer unlawfully deducts wages or fails to provide accurate pay statements. b. Termination-related Liquidated Damages: — Wrongful Termination: Employers may agree to pay a predetermined sum if an employee is terminated in violation of the employment agreement, without just cause, or unlawfully. — Non-Compete Agreement Violation: This clause specifies the compensation an employee will receive if the employer breaches the terms of a valid non-compete agreement. c. Contractual Breach-related Liquidated Damages: — Breach of Contract: If the employer violates any essential terms of the employment contract, such as failing to provide promised benefits or hours, this clause determines the financial compensation the employee will receive. 3. Enforceability of Mississippi Liquidated Damage Clauses: Mississippi law recognizes the validity of liquidated damage clauses in employment contracts, provided certain criteria are met. These criteria include: — The liquidated damages must reasonably reflect the potential harm suffered by the employee. — The agreed-upon sum must not act as a penalty, but as a genuine pre-estimate of damages. — The clause must be clear, unambiguous, and conspicuous within the contract. — The liquidated damages should be reasonably proportionate to the expected actual damages resulting from the breach. Conclusion: In Mississippi, a liquidated damage clause in an employment contract serves as a protective measure for employees, ensuring they receive appropriate compensation for employer breaches. Understanding the different types of liquidated damage clauses associated with various breaches enhances an employee's awareness of their rights. By adhering to the enforceability criteria, both employers and employees can maintain a fair and balanced employment relationship.
