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 South Carolina's Liquidated Damage Clause in Employment Contracts Addressing Employer Breach Introduction: The South Carolina liquidated damage clause in employment contracts serves as a means to address potential breaches by employers. This clause defines the compensation an employee may receive in case of a breach, ensuring fair and reasonable remedies for both parties involved. In South Carolina, there are several types of liquidated damage clauses in employment contracts tailored to specific situations. 1. South Carolina General Liquidated Damage Clause: This type of liquidated damage clause sets a predetermined amount of compensation to be awarded to the employee in case of an employer breach. The specified amount should be reasonable and proportionate to the anticipated harm resulting from the breach. Such clauses serve as a safeguard against potential financial losses and inconvenience caused by the employer's breach. 2. South Carolina Lost Wages Liquidated Damage Clause: In certain employment contracts, the liquidated damage clause may focus specifically on lost wages resulting from an employer's breach. These clauses ensure that the employee is adequately compensated for the income they would have earned had the breach not occurred. The liquidated amount reflects the estimated wages lost due to the employer's actions, which can vary based on the employee's position, skills, and earning potential. 3. South Carolina Non-compete Breach Liquidated Damage Clause: For contracts containing non-compete provisions, a liquidated damage clause may be included to address breaches specifically related to competitive activities by the employee following termination. This clause defines a fixed sum that the employee must pay if they violate the non-compete agreement, protecting the employer from potential harm resulting from the employee's actions. 4. South Carolina Trade Secret Breach Liquidated Damage Clause: In agreements where trade secrets are involved, a liquidated damage clause may be used to address breaches specifically related to the protection of proprietary information. The clause outlines the penalties an employee must pay if they reveal or misuse valuable trade secrets. This type of clause protects the employer's competitive advantage and compensates them for any damages caused by the unauthorized disclosure. Conclusion: South Carolina's liquidated damage clauses in employment contracts provide employers and employees with a fair framework to address potential breaches. By specifying predetermined compensation amounts, these clauses aim to prevent lengthy legal battles and ensure that both parties are adequately protected. Employers should carefully draft these clauses to reflect reasonable estimates of potential harms resulting from breaches, while employees should review and understand their rights and obligations under the specific clauses outlined in their employment contracts.
