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 Nebraska Liquidated Damage Clause in Employment Contracts for Employer Breach Introduction: In Nebraska, employment contracts often include a provision known as a "Liquidated Damage Clause" to address possible breaches committed by the employer. This clause serves to establish predetermined damages as compensation for certain types of breach, ensuring fair remedies for employees. In this article, we delve into the details of liquidated damage clauses within Nebraska employment contracts, highlighting different types that may exist. 1. Definition and Purpose of a Liquidated Damage Clause: A liquidated damage clause is a contractual provision that outlines the predetermined amount of damages an employer agrees to pay if they breach certain obligations within an employment contract. It helps establish a fair and consistent measure of compensation for the injured party (the employee) without requiring extensive litigation. 2. Nebraska-specific Liquidated Damage Clauses: a) Monetary Compensation Clause: The most commonly found liquidated damage clause in Nebraska is an arrangement where the employment contract sets forth a specific monetary amount that the employer shall pay the employee in the event of a breach. This clause acts as a form of insurance for the employee, ensuring they receive a fair settlement if the employer fails to fulfill contractual obligations related to compensation, benefits, or other terms. b) Non-Competition Agreement Clause: Another type of liquidated damage clause often seen in Nebraska employment contracts is related to non-competition agreements. In instances where an employer breaches the non-competition clause, this provision may establish a predetermined compensation amount that the employer must pay the employee. c) Confidentiality Breach Clause: For contracts involving sensitive information or trade secrets, employers may include a liquidated damage clause to address breaches concerning confidentiality. The clause determines the amount of damages an employer must pay the employee if confidentiality obligations are violated, protecting the employer's intellectual property or confidential data. d) Timeliness and Performance Clause: In certain cases, employers may include a liquidated damage clause to address breaches related to timeliness or performance obligations. This provision ensures that both parties consider the importance of timely and quality work, stating a specific amount the employer must pay if deadlines or performance standards are not met. 3. Enforceability and Limits: It is important to note that while liquidated damage clauses are common in Nebraska employment contracts, their enforcement may be subject to judicial scrutiny. Courts decide the validity of liquidated damage clauses based on reasonableness, ensuring that the predetermined damages are not excessive or commercially unreasonable. Conclusion: Nebraska's liquidated damage clauses play a vital role in protecting employee rights when employers breach their contractual obligations. By establishing predetermined damages, these clauses provide fairness, efficiency, and predictability in resolving contract disputes. Employers should carefully consider the various types of liquidated damage clauses, ensuring clarity and reasonableness in their employment contracts to protect both parties involved.
