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 employer would have to prove the actual damages.
Nebraska Liquidated Damage Clause in Employment Contract Addressing Breach by Employee A Nebraska liquidated damage clause in an employment contract serves as a safeguard to protect employers from potential monetary losses caused by an employee's breach of contract. It establishes a predetermined amount as compensation for the harm incurred due to the employee's actions. This detailed description aims to shed light on the different types of Nebraska liquidated damage clauses that can be included in an employment contract, shedding light on their purpose and implications. 1. General Liquidated Damage Clause: This type of liquidated damage clause is a catch-all provision that allows employers to seek compensation for any breach of the employment contract committed by the employee. It serves as a deterrent against breaching the terms of the agreement, ensuring that the employee understands the potential financial consequences. 2. Non-Compete Agreement Liquidated Damage Clause: If the employee breaches a non-compete agreement by engaging in activities that directly compete with the employer's business, a specific liquidated damage clause can be included. This provision establishes a predetermined amount that the employee must pay as compensation for the harm caused by the competition. It acts as a deterrent and reinforces the importance of respecting the non-compete agreement. 3. Confidentiality Agreement Liquidated Damage Clause: In cases where an employee breaches a confidentiality agreement by disclosing or misusing confidential information, a liquidated damage clause can be included. This clause outlines the predetermined compensation amount for the harm caused and serves as a reminder of the employee's duty to protect sensitive information related to the employer's business operations, clients, or proprietary information. 4. Intellectual Property Liquidated Damage Clause: If an employee infringes upon the employer's intellectual property rights, whether through unauthorized use, reproduction, or dissemination, a specific liquidated damage clause can be inserted. It provides a predefined compensation amount for the harm caused, emphasizing the significance of respecting and preserving the employer's intellectual property assets. The inclusion of a Nebraska liquidated damage clause in an employment contract offers several advantages. Firstly, it provides clarity regarding the potential financial consequences of breaching the terms of the agreement. By setting a predetermined compensation amount, both parties understand the potential losses they may face in case of a breach. Secondly, it saves time and resources in case of litigation, as the stipulated liquidated damages help establish a rational basis for calculating the employer's losses. Lastly, it acts as a deterrent, dissuading employees from engaging in actions that would violate the terms of the employment contract. When incorporating a liquidated damage clause in an employment contract, it is essential to ensure that the specified compensation amount is reasonable and not excessive. Nebraska's law requires that liquidated damages must reflect a reasonable estimation of the probable losses that may arise from a breach and not function as a penalty. However, if the predetermined amount is found to be unreasonable, courts may reduce it accordingly. In conclusion, a Nebraska liquidated damage clause in an employment contract serves as a protective measure for employers, deterring employees from breaching the terms of the agreement. By specifying a predetermined compensation amount for various breaches, such as general breaches, non-compete violations, confidentiality breaches, and intellectual property infringements, the clause helps establish clarity, rational calculations for potential losses, and ultimately encourages compliance with the employment contract's terms.
