When we say contract, in my mind, that means an employment contract, an employment agreement, and a contract that lists the terms of the employment relationship. So, can you quit if you sign a contract? Well, it depends upon what is in the contract. Every contract will have the length of the agreement, like how long it lasts and then how to terminate the agreement. There’ll be a section that’s called term and then termination. The termination section will dictate how to terminate the agreement and quit your job. There are four ways for a contract to be terminated.
4 Ways You Can Leave Your Job Depending on the Contracts You Sign
If it’s just a fixed-length, meaning, it’s a one-year or two-year contract. It doesn’t automatically renew, then the contract terminates at the end of it if neither party wants to restore it, and that’s the end of it. The second way would be through mutual agreement. If you and the employer decide, we want to move on, and if it meets the agreement, then you can leave. The third way is by breach of contract. What it’s called for-cause or with-cause termination.
If one party, I’ll do this from the employee’s perspective. If the employee believes the employer is in breach of contract, let’s say they are not paying the employee on time or the amount agreed upon, or maybe they’re not paying out bonuses. The employee would then have to give written notice to the employer and say, hey, you’re in breach of contract. And then usually there’d be what’s called a cure period.
15 to 30 days. The employee could not terminate the contract for-cause if they were to cure the breach. Usually, if after the cure period, whatever the breach was isn’t fixed, then it’s the option of the employee to terminate the contract immediately. And then last, and this is kind of what I would consider quitting your job, there will be, or at least there should be, without-cause termination. Without-cause termination means either party can terminate the employment agreement at any time, for any reason, with a certain amount of notice to the other party. The cure period states whatever party that’s in breach of contract has a period to fix whatever the breach is. Usually, it’s between
You can quit your job, but you may have to serve a certain amount of time. In most employment contracts, the notice period will be somewhere between 30 to 90 days. In that scenario, if you wanted to quit your job and terminate the agreement. You would have to send a written notice to the employer that just said. I’m exercising my right to terminate the agreement without-cause. And then, whatever the time was, say it’s 60 days, you’d say, my last day of work will be X date. And then you would have to work those 60 days. Then, at the end of 60 days, you’re free to leave.
Read Your Employment Contract Terms Before You Quit
Remember if you decide to quit your job or terminate the agreement. Many contracts would have some repayment obligation if they paid a signing bonus or relocation assistance or they’ve paid for licenses or certifications. It’s essential to determine, alright, if I terminate this contract or quit my job, will I have to pay anything back? If you’re a healthcare professional, malpractice insurance obligations will likely be.
So, if you must pay for tail insurance, you need to identify that and figure out what that cost will be. And then lastly, and usually most importantly, are there any restrictive covenants in the contract? Even if you quit your job, the restrictive covenants will still apply. The restrictive covenants would be a non-solicitation agreement and a non-compete—the two most common restrictive covenants. The non-solicitation agreement will state you can’t actively solicit patients, clients, customers, employees, independent contractors, and vendors for a certain period of one year.
And then the non-compete is even more critical. It will state that the professional can’t work within their specialty for a period, usually one to two years, within a specific geographic radius. For healthcare professionals, it could be 10 miles from your primary practice location. If you’re in sales, it could be that you can’t work in these counties or even can’t work within this entire state. Now, that’s broad. I don’t think that would likely be enforceable in most states, but that’s what the non-compete is. So, just because you quit the job, you no longer want to be employed there doesn’t mean these restrictive covenants won’t apply.
Give Your Employer Notice To Avoid Blows in Your Career
You need to look at the language of the contract and determine: what are all the things that are going to follow me after I quit my job? Because if you terminate the agreement, it doesn’t mean that everything ends either. So yes, you can leave your job, most likely if you have an employment agreement, but you are required to follow the terms of the agreement. What if you say I have an employment agreement? I’m sick of working here. I’m just not coming back.
If you don’t give notice, you don’t show up. Then you’re done. Well, you’re a breach of contract and opening yourself up for potential legal action, either through a lawsuit or if there’s an arbitration clause or maybe some mediation. There could be damages associated with you for not giving the proper notice. In addition, it could be the company’s lost profits when you just left. It could be recruitment fees and finding your replacement. So, I suggest you follow the terms of the agreement.
And then, when I talk to many unhappy employees, I always say, look, if they are in breach of contract, you must provide them with written notice. You can’t just sit there and take it and then use that as justification for not coming back. You must follow the terms of the agreement.
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Can an Employee Terminate an Employment Contract?
The short answer is, obviously, yes. However, it will be determined based on the terms of the contract. In any employment contract, there will be a section that deals with the times, the employment contract’s length, and then termination, so how that contract ends. Let’s first talk about the terms of the agreement.
Most employment contracts will have a date, meaning it’s a year-long, two-year, or three-year contract. Then if the agreement doesn’t terminate, it will state a language. It will automatically renew for successive one-year terms. In that case, if a contract isn’t closed in another way after the initial period ends, it’ll just continue forever until terminated.
I would say there is a rarely fixed term with no language about automatic termination. If it’s just a two-year fixed term with no automatic renewal, it would just end at the end of two years, and that would be it. The parties can go their ways.
What Are the Reasons for Contract Termination?
Now, regarding terminating the contract, the first part is that if there is no renewal, it ends, and the employment contract ends. Second, by mutual agreement. Suppose the employer and the employee agree that the relationship isn’t working. In that case, they can always, by contract, decide to move on, and then that’s it, you can move on. Next would be with-cause termination. In this case, if someone breaches the employment contract, there’ll be language that states why the employer can fire the employee. If you need a license to perform the activity and lose your license, or if insurance is required and you’re uninsurable. There are, I guess, vague behavioral clauses.
If you’re disabled, you die, I mean, ordinary things, but there should also be a part called a cure. And so, in that case, if one of the parties believes the other party is in breach of an employment contract, the most common reason is just payment concerns. Either someone is unpaid, they were promised an amount in the associate employment agreement, or maybe the timing. Also, the bonus payment is involved, and there is disagreement over the professional owed amount. That’s always a big, I guess, reason why there would be an allegation of breach of contract.
What Happens if Breach of Contract Is Committed?
If you believe the employer breached an employment contract, you’d have to provide them with written notice. And then the cure period means the employer would have a period to fix whatever the breach of associate contract is. Typically, that’s somewhere between 15 to 30 days. And the same can go for an employee.
If the employer thinks the employee is in breach of contract, they give them written notice, and then the employee has 15 to 30 days to fix the breach. If the breach is unfixed, the other party still believes the other party is in breach. Usually, that party has the option to terminate the dental associate agreements immediately. The last and most common way in most employment contracts is without-cause termination. There’ll be language that states that either party can terminate the employment agreement at any time, for any reason, with a certain amount of notice to the other party.
Typically, it would be somewhere between 30 to 90 days. Suppose the professional is unhappy and wants to move on. In that case, they give written notice saying I’m utilizing the without-cause termination notice in the employment contract. Then they must work out for 30, 60, or 90 days. Then at the end of that period, they can move on without any concerns regarding terminating the employment contract. Yes, an employee can terminate an employment contract, but they must follow the terms of the agreement.
Employment Contract Termination and Non-Compete Law
Just because an employee terminates, the contract doesn’t mean it necessarily ultimately ends at that point. They could be required of the employee if they terminate the contract. Many times, if given a signing bonus or relocation assistance, The employee would have to pay back a prorated portion of that if they left within the initial term of the employment agreement. Others could have non-compete associated with it.
So, just because an employee terminates the contract doesn’t mean that the non-compete doesn’t apply. It does, or at least it does in most circumstances if you’re in a state where non-competes are enforceable. How long will that last if there is a geographic restriction and then some temporary condition? That will continue even if the employee terminates the contract. If some malpractice insurance is involved and tail insurance is needed, it will say who must pay for that in the contract. Employees may also be responsible for that if they terminate the agreement. Although the employee can terminate the employment agreement, it doesn’t mean that there aren’t at least some strings attached.
One of the highest priority things I look at in the contract when I’m going over it with a professional. How do you get out of the agreement? And then what do you have to do if it ends within a certain period? In that way, the employee can know that I need to set aside this amount of money if I must pay for tail insurance or if I must pay back the signing bonus. So, they’re essential discussions and things employees could negotiate before signing any employment agreement. Hopefully, that was helpful—kind of an overview of termination of an employment contract.
How You Can Terminate an Agreement
You probably shouldn’t, and your employment contract probably prohibits it. In any agreement, it’s going to state how you can terminate an agreement. It could be for-cause, without-cause, mutual termination, or maybe the initial term ends. But in most cases, I mean most contracts are terminated without-cause termination. Without-cause termination, either party can terminate the contract with a certain amount of notice to the other. Typically, around 30 to 90 days is a standard amount for most employment agreements. Suppose you are an employee, and for whatever reason, you don’t want to work for the employer anymore. In that case, you must follow those terms written on the without-cause termination notice.
And it always needs to be written. It’s going to state that you must write a letter. And then, it will also say if it’s a 60-day without-cause termination. The employee has to provide it 60 days prior, work it out, and after the 60 days are over. The employees are free to go once the contract terminates, and the employees are free to move on. They want to go where they want to go after that—considering if there’s a non-compete or a non-solicit. Still, we’re not going to get into that today.
How Do Employees Communicate a Notice?
The most crucial part as far as this goes is that it will be called “notice” or “notices.” It’s toward the back of the employment agreement initially provided by the company. And this will state who, then how you need to provide notice if there is communication.
An employee could provide in writing a certified letter or overnight hand delivery of whatever termination notice you’re going to provide. And that would then be considered adequate notice. Very few contracts allow email as an effective notice medium. If you gave, let’s say, you wrote an email telling your employer. I’m giving you without-cause termination notice, and I have 60 days. X will be my last day of work. I appreciate the opportunity. Well, if the email is not an effective communication medium within that notice section, that’s not considered effective notice. And then, the employer could make you work for another 60 days until you provide adequate notice. So, that’s the essential part. You need to look in the notices section and determine if the proper way to terminate the employment agreement includes email.
I can tell you if I review a hundred employment contracts, 98 of them will not include email or fax. And you certainly can’t just verbally tell your employer you’re leaving. It must be in writing. And most often, it has to be sent either by certified mail or hand-delivered. It depends on whether you work for a small practice or a vast conglomerate with locations in every state. It’ll be impossible to hand-deliver the notice if you must provide notice to the headquarters, and that’s halfway across the country.
The Consequence of Notice Not Received
To be safe for the most part, you need to write a letter. You’ll have to print it out and send it via certified mail that the employer is using. Usually, it’s one or two. You must send it to the owner if it’s a smaller practice. If it’s a big conglomerate, you have to send it to probably your boss plus the legal apartment of the company as well. If you look through, how much notice do I have to provide? And then how do I have to provide effective notice? You’ll be safe.
I have a couple of scenarios, and people have called me after the fact. And they’ll say I sent a letter to my employer’s email. I told them I was going to terminate the employment contract, and they didn’t say anything. I assumed that my contract would end on a specific date. The employer was mad about the employee leaving the company. The employer ticked off that they were leaving. So, what they did was they just sat on it for 45 days. And then, 15 days before the physician thought he was going to leave, they said, you didn’t provide us with effective notice. Email isn’t an effective form of communication to provide notice. You owe us another 60 days until you give us adequate notice, meaning a written letter sent via certified mail.
And so, the physician had already lined up another job, he had a start date in mind, and then he had to return to the new employer. He would say, I apologize; I will have to delay my start date by almost two months. That was a tough pill to swallow for the physician. If you follow the terms of the notice section, then you should be okay.
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Contract Review, Termination Issues and more!