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Your employer broke a promise that was in writing, and now you are trying to figure out what that breach of contract is really worth in New York, not just what feels fair. Maybe you were counting on a year of guaranteed salary, a significant bonus, or a severance package that disappeared when you were pushed out. You might have read that a breach of contract lets you sue for damages, but that does not tell you how judges in New York actually put numbers on your loss.
In our experience, people in your position are often balancing anger, confusion, and practical worries about paying bills or finding the next role. You may assume the company has to pay everything it promised, or that a judge will punish them for breaking their word. New York contract law works differently. Once you understand how courts here evaluate damages, you can make smarter decisions about negotiations, job searches, and whether to bring a claim at all.
At Schwartz Perry & Heller LLP, we have spent decades representing employees across New York City in breach of contract, discrimination, harassment, and retaliation cases. Our attorneys bring over 100 years of collective experience focused on New York employment law, and our cases have helped shape how courts view employers’ obligations to their workers. In this guide, we explain how damages for breach of contract are evaluated in New York, using real-world employment scenarios so you can see how the rules might apply to your situation.
How New York Courts Think About Contract Damages
New York courts start from a simple idea. Contract damages are designed to give you the benefit of your bargain, not to punish your employer. Judges ask what position you would have been in if the employer had honored the contract, then compare that to where you actually ended up. The difference, if you can prove it with reasonable certainty, is the core of your damages.
This is often called expectation damages. In an employment contract context, it usually means the salary, bonus, commissions, or benefits you were promised but never received because of the breach. For example, if you had a written agreement for a $150,000 salary through the end of the year and you were wrongfully terminated with three months left, the starting point is the $37,500 in salary you did not receive. That is the basic economic gap the court will look at.
New York courts also care about foreseeability and proof. The losses you claim must have been reasonably foreseeable to both sides when the contract was made, and you need evidence, not just guesses, to support the amounts. Courts in New York are skeptical of speculative claims, such as vague assertions about lost career opportunities without concrete numbers or documentation. Our attorneys see this play out regularly in New York courts, which is why we focus early on building a clear, documented picture of the financial harm tied directly to the breached agreement.
Even when an employer’s conduct feels outrageous, the court’s first question is still what the contract promised and what the measurable financial difference is. Other remedies, such as emotional distress or punitive damages, usually come through different legal theories, such as discrimination or retaliation, not through the contract claim itself. Understanding that distinction helps you set realistic expectations and structure your case effectively.
Expectation Damages in NY Employment Contracts: Salary, Bonuses & Benefits
In New York employment contracts, the benefit of the bargain often includes more than base salary. Employees commonly have written promises related to bonuses, commissions, equity, expense reimbursements, and benefits such as health insurance or retirement contributions. Each of these can be part of expectation damages if the contract language creates a clear obligation and you can tie your loss to the breach.
Courts pay close attention to the wording of these provisions. A clause that says the company shall pay a $50,000 annual bonus if specific performance targets are met is very different from language stating that the company may, in its discretion, pay a bonus. In the first case, if you met the targets and were still denied the payment, New York courts may view the bonus as a recoverable contractual entitlement. In the second, it is much harder to convince a judge that the company was legally required to pay anything.
Consider a concrete example. You have a one year contract with a $200,000 salary and a guaranteed $40,000 bonus if you remain employed through December 31. The company terminates you without cause on September 30, without paying the remaining salary or the bonus. If you prove the contract and the lack of cause, your expectation damages start with three months of salary ($50,000) plus the $40,000 guaranteed bonus, subject to mitigation and any offset from new employment. By contrast, if the bonus section said only that management would consider a bonus, courts in New York are far less likely to treat it as an enforceable promise.
Benefits can also matter. If your contract obligated the employer to continue health insurance premiums for a fixed period or to make certain retirement contributions, the value of those benefits may be part of your damages. The key is showing clear contract language and quantifying the value, such as by using COBRA premium rates or contribution histories. At Schwartz Perry & Heller LLP, we frequently review offer letters, employment agreements, bonus plans, and commission schedules for New York employees to identify which parts create enforceable rights and how they factor into total expectation damages.
Mitigation: How Your Job Search Can Reduce NY Contract Damages
Many employees are surprised to learn that in New York, you have a duty to mitigate your damages after a breach of contract. This means you are expected to make reasonable efforts to find comparable employment, and the income you earn in a new role usually reduces the amount you can recover for lost pay. Courts are not interested in paying you twice for the same period of time.
Imagine your contract guaranteed a $180,000 salary through December 31, and you are terminated on June 30 in breach of that agreement. On paper, you lost six months of salary, or $90,000. If you remain unemployed until the end of the year despite a reasonable job search, that $90,000 may reflect your full lost earnings for that period. If you secure a new job starting October 1 at $150,000 per year, your recoverable salary damages for the contract period likely drop to three months of full loss (July through September) plus the $15,000 difference in pay over the final quarter.
Courts look at whether your efforts to find work were reasonable under the circumstances. They do not require you to accept any job at any pay, but if you turn down comparable offers or stop looking, the employer may argue that your losses after a certain date are self-inflicted. Evidence such as saved job postings, application emails, recruiter communications, and interview notes can be critical in showing that you tried to mitigate.
This creates a practical tension. You may worry that taking a lower paying or less desirable job will undermine your case. In reality, New York courts generally favor employees who keep working and then claim the difference between the old and new compensation where appropriate. At Schwartz Perry & Heller LLP, we regularly counsel employees on how to balance real-world career decisions with the impact on damages, and how to document their efforts so an employer cannot credibly claim that they sat on their hands.
Consequential, Incidental & Liquidated Damages Under New York Law
Expectation damages cover the direct financial loss from the breach, but employees sometimes ask about broader harms, such as lost business opportunities or extra costs caused by the employer’s actions. New York contract law recognizes consequential and incidental damages, although they are more limited in employment cases than many people expect.
Consequential damages are additional losses that flow from the breach and that both parties could reasonably have foreseen when they made the contract. Incidental damages are reasonable costs incurred in dealing with the breach, such as certain out of pocket expenses. In an employment context, these categories are often difficult to prove and are frequently constrained by the at will nature of many jobs. Courts in New York are cautious about awarding speculative amounts for things like future promotions or undefined career harm.
Liquidated damages clauses create a different dynamic. These are contract terms that set out a specific sum that will be payable if one party breaches, such as a provision that the employer will pay six months of salary if it terminates the employee without cause during the first year. New York courts do enforce liquidated damages in some situations, but only if the amount is a reasonable estimate of likely loss at the time the contract was made and not a penalty designed to punish.
For example, if both sides agreed at the outset that early termination would likely cause significant disruption and that six months of salary reasonably approximated that harm, a New York court may uphold that clause. If the clause demanded three years of salary for any early termination in a one year role, a court may view that as excessive and refuse to enforce it. As one of the first firms to focus on employment law in New York, we have seen liquidated damages and limitation of liability clauses tested in many ways, and we know how judges here typically assess whether a provision reflects a fair estimate of loss or an unenforceable penalty.
What You Usually Cannot Recover: Punitive & Emotional Distress Damages
A common misconception is that a breach of contract lawsuit will allow you to punish the employer for bad behavior or recover money for the stress and humiliation of how you were treated. Under New York law, pure contract claims almost never allow for punitive damages or emotional distress awards. Those kinds of remedies are tied to statutory or tort claims, not to the breach of an agreement itself.
In contract cases, New York courts focus on economic loss. They are not focused on sending a message to the employer or compensating you for pain and suffering that flows from the breach. Even if your manager lied, acted in bad faith, or engineered a termination to avoid paying a bonus, the remedy under contract law generally remains limited to the financial value of the broken promise, adjusted for mitigation and other factors.
However, employment disputes rarely exist in a vacuum. The same events that breach a contract may also violate anti discrimination, anti retaliation, or anti harassment laws. In those statutory claims, New York and federal law may allow emotional distress damages and, in some cases, punitive damages. For example, if you were terminated shortly before a guaranteed bonus because you complained about discrimination, you might have both a contract claim for the unpaid bonus and a discrimination or retaliation claim that opens the door to broader remedies.
At Schwartz Perry & Heller LLP, we routinely combine breach of contract claims with discrimination, harassment, or retaliation claims when the facts support it. Our recognition in Super Lawyers and membership in the Million Dollar Advocates Forum reflect significant results in cases where emotional distress and other non economic damages were on the table. At the same time, we are candid with clients that the contract portion of a case is usually limited to financial losses, and we help them understand which parts of their harm New York law will compensate under which legal theory.
Specific Performance & Equitable Remedies in NY Employment Disputes
Money is the default remedy for breach of contract, but employees sometimes ask whether a court can force the company to honor the agreement by reinstating them or continuing certain benefits. In legal terms, this is called specific performance or equitable relief. In New York employment disputes, courts are very reluctant to order ongoing employment relationships, but there are limited situations where equitable remedies may make sense.
Specific performance means a court orders a party to do what it promised instead of just paying damages. For most personal service contracts, including employment, New York judges resist compelling one side to keep working with the other. The relationship depends on trust and cooperation that courts cannot realistically supervise. Forcing an employer to keep someone on staff usually creates more problems than it solves, both for the employee and the organization.
That does not mean equitable relief is never available. In certain situations, a court may order an employer to honor a specific payment or vesting obligation, such as allowing an employee to exercise stock options that have vested under the contract, or enforcing a right to participate in a particular bonus plan for a defined period. The court is not forcing a long term relationship, but it is ensuring that a concrete, one time obligation is carried out.
There are also circumstances, especially in public sector or unionized environments, where reinstatement may be a potential remedy through statutory or contractual grievance procedures rather than a traditional contract lawsuit. When we evaluate a case at Schwartz Perry & Heller LLP, we look at whether equitable relief is realistically available and whether it aligns with the client’s goals. Many employees, once they understand what working relationships would look like after a lawsuit, prefer to focus on obtaining fair compensation and moving forward in their careers.
Proving Damages: Documents, Testimony & Common Employer Defenses
Even when the legal rules are favorable, the value of a breach of contract claim in New York depends on the evidence you can present. Courts need to see the agreement itself, how it was supposed to work, what actually happened, and how that change affected your finances. The stronger your documentation, the harder it is for an employer to downplay your losses or recast promises as informal or discretionary.
Key documents often include the signed employment agreement or offer letter, compensation plan documents, emails confirming terms, performance reviews, pay stubs, and records of benefits. For commission based roles, plan descriptions, quota statements, and sales reports become critical. For bonuses, we look for written criteria, past payment histories, and internal communications that show how decisions were made. Testimony from you and, where possible, from colleagues can help fill in gaps, but paper and electronic records usually carry the most weight.
Employers in New York consistently raise similar defenses. They claim the bonus was discretionary, that you did not satisfy all conditions for payment, that the contract allowed termination at any time without further obligation, or that your damages are speculative because you would not have remained employed for long anyway. They also attack mitigation, arguing that you did not look hard enough for work or that comparable positions were available that you declined.
This is where practical courtroom experience matters. Our attorneys at Schwartz Perry & Heller LLP have tried and resolved many employment cases in New York, including matters that resulted in substantial jury awards and influential decisions. We know the proof that judges and juries find persuasive on damages and the weaknesses that employers like to exploit. Early in a case, we work with clients to gather and organize documents, identify witnesses, and anticipate defenses so that we can present a coherent damages story that aligns with how New York courts evaluate breach of contract claims.
When a NY Breach of Contract Claim Fits Into a Bigger Employment Case
In many New York employment disputes, the breach of contract claim is one piece of a larger puzzle, not the entire case. The same facts that support a contract claim, such as a broken promise about pay or job security, may overlap with unlawful discrimination, retaliation for complaints, or other statutory violations. Understanding how these claims interact helps you see the full range of potential remedies and the strategic value of each claim.
Contract claims typically provide a framework for recovering specific financial losses tied to written promises, such as unpaid salary, severance, or bonuses. Statutory employment claims under New York or federal law can add back pay, front pay, emotional distress, and sometimes punitive damages, especially in discrimination, harassment, or retaliation cases. In practice, we often structure cases so that the contract claim anchors certain categories of lost compensation while statutory claims address the broader harm from illegal treatment.
For example, suppose you have a written commitment to a $60,000 year end bonus if you meet defined performance metrics, and you have emails showing that you did. Shortly before the bonus date, you report sexual harassment and are fired. A New York breach of contract claim may allow you to pursue the $60,000 bonus itself, while discrimination and retaliation claims may support additional lost wages, emotional distress damages, and possibly punitive damages, all based on the same course of conduct.
Because Schwartz Perry & Heller LLP has long focused on employment law and our attorneys are frequently cited for legal insight, we pay close attention to how New York courts handle overlapping damages so we do not double count and so we maximize the categories of recovery available. Analyzing the contract and the surrounding facts together allows us to advise whether a breach claim strengthens your overall case, how it affects settlement leverage, and which legal theories are worth pursuing.
Talk With a New York Employment Lawyer About Your Contract Damages
New York law offers real remedies when an employer breaks written promises about your pay, bonuses, or benefits, but those remedies have clear limits and depend on the words of the contract, your efforts to move forward in your career, and the quality of your evidence. A careful evaluation can reveal both strengths and weaknesses in your claim, and can also uncover related discrimination, harassment, or retaliation issues that may open the door to additional types of damages.
If you believe your employer breached an employment contract, you do not have to guess at what your case might be worth or rely on generic online formulas. Our team at Schwartz Perry & Heller LLP can review your agreements, compensation history, and timeline, then explain how New York’s rules on contract damages apply to your specific situation and how a contract claim might fit into a broader employment case.
To discuss your options with a New York employment attorney, call us at (646) 490-0221 or reach out through our website today.