What is a Good Faith Clause?

You’ve been working for your employer for a few months, maybe even several years, believing everything is fine. But then, without warning, your employer presents you and your co-workers with updates to your employment contract. They say it’s just to update the fine print and expect you to sign it on the spot or by the end of the day. This may seem innocent or mildly inconvenient, but it’s actually much more serious. They are failing to provide you adequate notice to change a contract that originally granted you privileges your employer is infringing upon. By doing this, they have broken what is called a good faith clause that is in every contract, whether it’s stated or not.

But what is a good faith clause? If you’ve never heard of a good faith clause, then you may not know what protection employees have in this situation. Employers bet on their employees being uninformed about these things, so let the employment rights attorneys at Bantle & Levy explain what a good faith clause is to protect yourself in the future.

What is a Good Faith Clause?

A good faith clause is an agreement that can be written into contracts or go unspoken, where all parties have a mutual understanding to act honestly and in good faith with each other. In New York, deceptive business practices are prohibited and do not need to be stated, but having them in a contract more clearly defines them for both parties.

To act honestly and in good faith means that neither party will use any deceptive, misleading, or fraudulent activity to gain more from their contract at the expense of the other party.

If put into writing, good faith clauses are expected to provide specific guidance on how disputes should be handled. This ensures that each party attempts to amicably resolve conflicts before resorting to litigation.

When Would You Use a Good Faith Clause?

Good faith clauses can be used in multiple different situations. Some are non-contractual situations, such as employment contracts where an employer is expected to maintain certain standards of conduct with their employees. In this instance, non-contractual means that the good faith clause doesn’t have an expected end like it would if you worked as a contractor.

These clauses can help ensure that employers are acting fairly toward their employees while employed. These clauses may also provide additional protections for employees, such as protection from discrimination or unfair termination.

Examples of How Employers Can Break Good Faith Clauses

To identify and prepare for when an employer may take advantage of you, here are some examples of how good faith clauses are commonly broken. If you experience any of these situations, contact the attorneys at Bantle & Levy immediately. If your worries include signing a new contract, do not sign it until an attorney reviews it for you first.

  • Employers are legally required to provide a safe working environment for employees, save for a few exceptions. Asides from these exceptions, an employer breaks a good faith clause by failing to provide a safe working environment for their employees. This includes ensuring that all equipment and machinery work as they should. This also includes having clear policies and procedures in place to protect everyone’s safety at work. If an employer does not take all the necessary precautions, an employee can file a lawsuit against them. They can claim that their employer breached their good faith clause with their employees.
  • Employers may also breach a good faith clause if they do not provide timely payment for services rendered or goods supplied by employees or contractors. Not paying people on time can cause unnecessary stress and financial hardship on the individual, hence why employers need to meet their contractual obligations.

Why Should You Contact an Attorney at Bantle & Levy?

The old saying “read the fine print” doesn’t come from nowhere. Employers, both big and small, will sometimes try to sneak in anything to protect themselves at any time. The lack of a well-defined good faith clause, or the inclusion of a poorly-defined one, is meant to help them meet legal obligations set by law. They are not going to act in your best interests.

Even once you’re past signing an employment agreement, your employer can always come back and break faith with you and your fellow employees later. If your employer acts in a way that sabotages you as an employee or worse, you need an attorney to protect your rights.

The attorneys at Bantle & Levy have legal experience that many others can’t match. With our help, we can protect you from being taken advantage of, and if need be, seek damages from your employer for any of the actions that follow breaking a good faith clause, like workplace discrimination, wrongful termination, lost wages, and more. Contact us today.

Bantle & Levy

Lee Bantle is a partner at Bantle & Levy LLP. He has extensive legal expertise, admitted to the bars of the U.S. District Court and the U.S. Court of Appeals. With a distinguished academic background and clerkship experience, he has been recognized as a top-rated civil rights attorney and esteemed lawyer. In addition to his successful career, he has actively contributed to various legal organizations and serves as a faculty member for NYU's Annual Workshop on Employment Law for Federal Judges.

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