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.
A liquidated damage clause in an employment contract is a provision that specifies the amount of compensation an employee is entitled to receive in the event of a breach by their employer. In the state of Michigan, there are several types of liquidated damage clauses that can be included in employment contracts to address breaches by the employer: 1. Liquidated damages for non-payment of wages: This type of clause specifies a predetermined amount that an employee will be entitled to receive if the employer fails to pay the agreed-upon wages. It ensures that employees are compensated for any delayed or withheld wages. 2. Liquidated damages for non-compliance with employment terms: This clause outlines the amount of damages an employee can claim if the employer fails to comply with specific terms of the employment contract, such as providing promised benefits or bonuses. 3. Liquidated damages for wrongful termination: This type of clause establishes the amount of compensation an employee can seek if they are wrongfully terminated by their employer. It ensures that employees are protected and fairly compensated for the loss of employment due to an unlawful act by the employer. 4. Liquidated damages for breach of confidentiality or non-compete agreements: This clause sets the amount of damages an employee can claim if the employer breaches provisions related to confidentiality or non-compete agreements. It acts as a deterrent against employers violating these agreements and protects the employee's rights. 5. Liquidated damages for violation of discrimination or harassment policies: This type of clause establishes the compensation an employee can seek if the employer breaches anti-discrimination or harassment policies. It provides a remedy for employees who experience discrimination or harassment in the workplace. It is essential for both employers and employees to carefully review and understand the liquidated damage clause included in an employment contract. Ensuring that the clause reflects the specific needs and concerns of both parties can help prevent future disputes and provide a fair resolution in case of a breach. It is recommended to consult with a legal professional to draft or review a liquidated damage clause to ensure its enforceability and compliance with Michigan employment laws.
