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.
Connecticut Liquidated Damage Clause in Employment Contract Addressing Breach by Employee: In Connecticut, a liquidated damage clause in an employment contract is a legally binding agreement between an employer and an employee that establishes a predetermined amount of damages the employee will be required to pay in the event of a breach of contract. This clause is included to protect the employer from potential financial losses resulting from the employee's breach of their employment obligations. There are several types of liquidated damage clauses that can be included in an employment contract in Connecticut, each addressing different aspects of an employee's breach: 1. Non-Compete Clause: This type of liquidated damage clause prohibits the employee from engaging in certain competitive activities, such as working for a direct competitor, or disclosing confidential information. If the employee breaches this clause, they will be liable for a predetermined amount of damages to compensate the employer for the potential harm caused by their actions. 2. Non-Solicitation Clause: This clause restricts the employee from soliciting or attempting to solicit clients or employees from the employer's business for a certain period of time after the employment terminates. If the employee breaches this clause, they will be required to pay liquidated damages as agreed upon in the contract, reflecting the potential loss of business or disruption caused by their actions. 3. Confidentiality Clause: The liquidated damage clause addressing confidentiality ensures that the employee agrees to keep all proprietary and confidential information acquired during their employment strictly confidential. If the employee breaches this clause by disclosing such information, they will be liable for a predetermined amount of damages to compensate the employer for any harm caused by the unauthorized disclosure. It is important to note that the enforceability of liquidated damage clauses in employment contracts varies depending on factors such as reasonableness, specificity, and proportionality to the harm caused. Courts in Connecticut will carefully examine these clauses to ensure they are not punitive or excessive. Employers in Connecticut should consult with legal experts specializing in employment law to draft clear and enforceable liquidated damage clauses tailored to their specific circumstances. Employees should seek legal advice to understand their rights and obligations under such clauses before signing any employment contract.
