Breaking Employment Contracts

If a job comes with a one year contract and I take it, what will happen if I find something better within the one year and want to leave?

Leaving My Job Before My Contract Is Up

Most employment in the United States is employment at will which means that either party can terminate at any time. The video below explains in further detail.

That being said, if you leave your job within the first year, you may activate a breaking clause that requires some reparations such as paying back a signing bonus.

User @abedneg06", a private equity managing director, shared a detailed response:

abedneg06 - Private Equity Managing DirectorThere should be an out or breakup clause that stipulates the penalty. If there's no penalty, perhaps you hand over a pro rata % of your signing bonus to avoid burning bridges. Generally employment contracts are longer than a year so I doubt the firm would give much trouble although HR might get upset. A one year contract also should exclude hefty provisions such as a non-compete, but if it is in there then you would have to carefully structure the scope & even region of your alternative positions.

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7 Comments
 

Depends on the details of the contract and your firm relationship. There should be an out or breakup clause that stipulates the penalty. If there's no penalty, perhaps you hand over a pro rata % of your signing bonus to avoid burning bridges. Generally employment contracts are longer than a year so I doubt the firm would give much trouble although HR might get upset. A one year contract also should exclude hefty provisions such as a non-compete, but if it is in there then you would have to carefully structure the scope & even region of your alternative positions. If you're based in CA, it is easier to break employment agreements as it is a labor-friendly state.

 

Generally speaking nothing. The only thing that could happen from a legal standpoint is if there was some stipulated damages clause, which would basically mean a forfeit of your bonus -- it is highly unlikely that your agreement has any claw back provisions.

I agree with what the poster above said. Of course read the employment agreement, but what you'd want to be more concerned with is the potential reputational damage -- all that means is make sure you leave on a good note with your superiors and co-workers...don't worry about HR.

"They are all former investment bankers that were laid off in the economic collapse that Nancy Pelosi caused. They have no marketable skills, but by God they work hard."
 

Generally, most employment in the United States is "at will", meaning that either party can break the contract at any time for any reason (or no reason at all). It's likely that if you break your contract abnormally early (within the first year of employment), you'll have to repay some or all of your signing bonus.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 

Alright thanks guys, I'm still going through the stages of the interview process but if I receive the offer I'll just take a close look at the contract. I was just wondering in case I accepted the offer and a month down the road I was offered something at a better company, as I'm still going through a bunch of interviews.

 

Delectus in voluptas iusto et ut nihil totam. Distinctio quo optio illum soluta nihil. Ut unde vel unde at necessitatibus.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

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