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.
The Florida Liquidated Damage Clause in an employment contract is a contractual provision that addresses the consequences of a breach by an employee. This clause aims to establish predetermined damages that an employer may be entitled to if an employee violates certain terms of the employment agreement. In Florida, there are two primary types of Liquidated Damage Clauses in an Employment Contract Addressing Breach by Employee: 1. General Liquidated Damage Clause: This type of clause sets a specific predetermined amount of damages that the employee must pay to the employer in the event of a breach. The amount specified is generally a reasonable estimate of the potential harm caused by the employee's breach. It is important for the predetermined amount to be a genuine pre-estimate of the damages that would be incurred, rather than a penalty that exceeds actual harm. 2. Restraint of Trade Liquidated Damage Clause: In certain cases, an employment contract may include a restraint of trade provision, which limits the ability of an employee to compete with the employer after termination. A Restraint of Trade Liquidated Damage Clause establishes a specific predetermined amount of damages that an employee must pay if they breach the non-compete or non-solicitation provisions of the contract. This clause is designed to protect the employer's legitimate business interests by compensating for potential loss of clients, trade secrets, or intellectual property. Both types of Liquidated Damage Clauses should be drafted carefully to ensure they comply with Florida law. Courts in Florida will closely scrutinize these clauses to determine if they are reasonable and not excessive penalties. If the clause is deemed to be an unenforceable penalty, a court may refuse to enforce it and instead award actual damages suffered by the employer. Overall, the Florida Liquidated Damage Clause in an Employment Contract Addressing Breach by Employee represents an important legal provision that can help protect employers' rights and interests in the event of employee misconduct or violation of contractual obligations.
