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.
Wyoming Liquidated Damage Clause in Employment Contract Addressing Breach by Employer When drafting an employment contract in Wyoming, it is crucial to include a well-defined liquidated damage clause to address potential breaches by the employer. A liquidated damage clause sets a predetermined amount of compensation that the employer must pay as damages in the event of a breach. This clause is beneficial for both parties involved as it provides clarity and predictability in case of a violation. It is important to note that Wyoming law regulates the enforceability of liquidated damage clauses in employment contracts. To ensure compliance, it is recommended to consult an employment attorney or review the Wyoming Labor Standards Act. Below, we discuss two main types of Wyoming liquidated damage clauses commonly found in employment contracts: 1. Specific Breach Liquidated Damage Clause: This type of clause outlines a fixed compensation amount that the employer agrees to pay to the employee in case of a specific breach. For instance, the employment contract may stipulate that in the event of wrongful termination, the employer shall pay the employee a predetermined sum of money as liquidated damages. This specific breach liquidated damage clause allows the parties to easily assess the potential financial consequences of a breach. 2. General Breach Liquidated Damage Clause: Unlike the specific breach clause, the general breach liquidated damage clause aims to cover a broader range of potential breaches rather than focusing on one particular violation. This type of clause typically sets a predetermined amount of damages that the employer would owe the employee if any act of breach occurs during the course of employment. By including a general breach liquidated damage clause, both parties eliminate the need to quantify the damages caused by each specific breach individually. It is important to ensure that the liquidated damage clause in an employment contract is reasonable and not considered a penalty by the court. Wyoming courts evaluate such clauses to determine if they reflect a fair estimation of the damages likely to result from a breach. If deemed excessive or punitive, the court may rule the clause unenforceable. Employers should also bear in mind that liquidated damage clauses should be carefully drafted and clearly communicated to the employees at the time of signing the contract. Ambiguity or lack of clarity may render the clause unenforceable. In conclusion, including a Wyoming Liquidated Damage Clause in an employment contract addressing breaches by the employer provides both parties involved with a clear understanding of the potential consequences in case of violation. By specifying either a specific breach or a general breach liquidated damage clause, employers can protect their interests while giving employees a reasonable expectation of compensation in case of a breach. However, it is crucial to seek professional legal advice to ensure compliance with Wyoming law and ensure the enforceability of the clause.
