Breach of Employment Contract as a Cause of Action in New York

In New York, most jobs are considered “at-will,” meaning an employer can fire an employee for any reason or no reason at all, as long as it is not illegal. However, if there is a clear and enforceable contract that limits how or when an employee can be terminated, the rules change. In such cases, an employee who is fired in violation of that contract may have a legal claim for breach of an employment contract. This cause of action has specific legal requirements that must be met.

There Must Be an Enforceable Employment Contract

The first step is proving that there was an actual contract between the employer and employee that placed limits on the employer’s right to terminate. This contract can be a formal document signed by both parties, or it can be an employee handbook or company policy that clearly promises job security under specific conditions.

Not all handbooks or policies qualify. For the language to be enforceable, it must go beyond general statements about fairness or job expectations. It must include an express promise that the employee cannot be fired except for specific reasons, such as poor performance or misconduct. Vague language or general employment guidelines are usually not enough.

For example, a statement in a handbook that says “employees will only be terminated for cause” may be enforceable if it is clear and definite, and not contradicted elsewhere in the handbook by disclaimers stating that employment is at-will.

The Employee Must Have Relied on the Contract

Even if there is a contract that limits termination, the employee must also show that they relied on it. This means they accepted or stayed in the job based on the belief that they could only be fired for cause. Courts want to see that the employee understood the contract as offering job security and made choices based on that understanding.

For instance, if an employee turned down another job offer or relocated for the position because they believed their employment would be stable under the terms of the contract, this may show reliance. Without such reliance, the court may not treat the contract as enforceable.

Conclusion

In New York, breach of employment contract claims are not easy to prove. An employee must show that a clear, written agreement or handbook limited the employer’s right to fire them and that they reasonably relied on that limitation. At-will employment remains the default rule, so any claim that seeks to overcome it must be backed by strong and specific evidence.

Employees and employers alike should carefully review the language in offer letters, handbooks, and other employment documents to understand whether any enforceable promises are being made. When a contract limits termination, both sides must take those limits seriously to avoid legal consequences.

Find the Law

“To sustain a cause of action alleging breach of an employment contract, ‘a discharged employee must show that the employee handbook, or some other enforceable employment contract, contained an express limitation prohibiting the employee’s discharge except for cause, and that the employee specifically relied upon this language’ (Howley v. Newsday, Inc., 215 A.D.2d 729, 730).” Oross v. Good Samaritan Hospital, 300 A.D.2d 457 (N.Y. App. Div. 2002)