Can a breach of contract fee be deducted from my final paycheck?
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Can a breach of contract fee be deducted from my final paycheck?
I was employed as an independent contractor for 7 days, when hired I signed a contract saying that I was to give 30 days notice to terminate employment. I received no training, was expected to rectify a customer’s complaints for free and was not okay with the overall business practice of this company, so I quit without notice. I have since received my paycheck and I see that a $200 fee was deducted for breaching contract. Is this legal?
Asked on August 25, 2015 under Employment Labor Law, Oregon
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
An independent contractor is not an employee an independent contractor is, as the name implies, paid according to his/her contract. By your own admission, you breached the contract by failing to provide 30 days notice. The employer could theoretically have sued you for any costs or losses it incurred due to that breach, such as if had to hire a temp through an agency at a higher price to do the work you would otherwise have done, or lost profits if it lost or could not complete any accounts, etc. While it may be the case that it the employer would have lost less than $200 and if it did, could recover less than that, it's also the case that it might have lost more--possibly considerably more. Since to recover the $200 you'd have to sue your former employer, which has its own costs in time and money, and if you did, if they had greater losses, they could counter sue you, it may be best--given your admitted breach--to accept the $200 debit and leave well enough alone.
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