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St. Louis, MO Hiring Contract Concern Missouri

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  • St. Louis, MO Hiring Contract Concern Missouri

    I just received an employment contract from a prospective employer that had this little tid-bit nuzzled in:

    "The parties acknowledge that in the event of a breach of the agreement #company name# would suffer significant damages and losses to its business profits of a speculative and uncertain nature and amount. Therefore, if employee should breach the terms of this agreement, than employee shall pay liquidated damages in the amount of fifty thousand dollars ($50,000) to #company name#."

    This is a dead end low level position. The pay is 14/hr, and they only pay half the regular rate when driving. I have done work exactly like it for years and know for a stone cold fact that I will have no special proprietary information, security clearances, or client info for this position. $50,000 is over 3 years salary for this position.

    There are other less than ideal conditions proposed for this job that I won't get into, but suffice it to say that I am 99% likely to give a big ol' NO THANKS to this employer. With that said, there are some points of consideration I wanted clarification on.

    1-The statement as provided in the contract does not specify "up to the cost of damages." It does not even specify "only when actual damages occur." It seemingly and unabashedly flat out says that any perceived breach of the agreement, whether or not there are actually any proven or measurable damages to the company, will incur a $50,000 penalty on my part. Whether I single handedly steal every dime from the purses of the grandmothers of every employee or just witness someone else eating the president's lunch in the break room and get caught not reporting the infraction-$50,000 penalty?

    2-I have worked for DOZENS of contract employers over the years, and every single employment agreement I have ever signed has been able to proscribe this same intent into their contracts without listing some absurd monetary value as a penalty. It is, in fact, only because I glanced at the $50,000 figure listed that I even honestly bothered to read the clause in the first place. If it had just said that the employee would be responsible in the event of damage or loss or some other similar BS, I wouldn't have even batted an eye. But they have this absurdly out of place one price fits all penalty figure for what is-I promise you-essentially a dead end manual labor position...and that is suspicious at best.

    My main questions is this: Is the clause in question enforceable by law? Does an individual even have a right to sign themselves away to a penalty which is disproportionate to any real world situation? The law won't let a man agree himself into slavery, so where exactly is the line drawn on what is or is not unreasonable to enforce? If I were to sign-is it fully binding, or is it an invalidity that would/could be overthrown should it ever actually occur?

  • #2
    Can't answer your specific question, but do know of some really out there statements in employment contracts that have held up in the courts (especially local courts where the employer is a large employer and has $$$s to spend on good attorneys and time to go to court to protect those statements) over time. The small guy almost doesn't have a chance since the contract is legal and meets basic FLSA and employment laws. Whether it is enforceable is up to the judge/jury when it gets to a court of law.

    You are smart to read before you sign and to understand the consequences of the contract/agreement. But part of the issue is that we can't read the whole agreement and don't know how (or if) they define a breach. All I can suggest is if you really want the job (and I agree that I wouldn't sign it or take the job) that you take the whole agreement to a local employment attorney who is familiar with contracts.

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    • #3
      My feeling is

      1) They would never actually try to enforce this and
      2) No court in the land would find that contract reasonable when the consideration is a menial job with salary of 1/3 the amount of the penalty clause.

      However, the mere fact they have it in the contract for such a low level position is a big red flag. That just doesn't speak well of them as an employer, and I wouldn't want to work for them. If you aren't desperate for employment, I'd look elsewhere.

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