Employer’s Breach (Damages) – Question: Are damages for breach of a contract’s notice provision recoverable for the balance of the contract’s term? Answer: No.
Recently, The Honorable Richard D. Bennett, U.S. District Court for the District of Maryland, considered whether the proper measure of damages when an employer fails to comply with a notice of termination provision is limited to compliance with the notice provision. In Thompson v. Naval Academy Athletic Association, No. 12-2676 (D. Md. 19, 2014), Mr. Thompson contended that the Naval Academy Athletic Association (“NAAA”) terminated his employment without the requisite 180 days’ notice, and therefore, he sought compensation for the duration of the contract period. Judge Bennett relying on established Maryland law concluded that “[w]hen a party to a contract may terminate that contract at any time upon a specific period of notice to the other party, the injured party may recover only those profits he would have accrued during that period.”
Judge Bennett’s decision is helpful in clarifying the current Maryland law on damages when an employment agreement is terminated without proper notice.
About the Author
Jim Timmerman is a founding partner of Timmerman, Beaulieu, Hinkle & Esworthy, LLC. Jim’s practice focuses on complex business and commercial litigation, including the defense of companies in labor and employment matters, in the federal and state courts of Maryland. He can be contacted at (410) 649-4440 or via email at email@example.com.