Breach of Contract Is a Two-Way Street

When the opportunity to achieve a lifelong dream of being able to live and work in the United States is within reach, nurse candidates often sign employer or agency contracts without understanding the documents they are signing and their binding terms. Later, the nurse may realize that they have committed to something that is far different than their initial understanding of the opportunity presented. That is why it is critical to evaluate the entirety of an employment contract before signing on the bottom line to ensure a successful future and avoid a breach of contract.

Understanding the Contract

Firstly, it is important to understand what a contract is. A “contract” is an agreement between two or more persons that creates obligations for each party to do (or not do) certain things. Contracts are also called “agreements” and the two words are often used interchangeably.

A contract is binding on a party, both the applicant and the agency, the moment the party signs the document. A contract can be signed by a person using an actual pen or by using an electronic signature process, like DocuSign. The parties to a contract do not have to be in the same place when the contract is signed. So, you can be in your home country at the time you sign the contract and the company contracting with you may be in the USA or GCC at the time they sign the contract.

A “job offer” signed by both an applicant and agency or employer is binding and should be reviewed carefully to see what obligations are being created. In some cases, the job offer will refer to a formal “contract” or “agreement” to be signed later. In other cases, the job offer will contain all the terms and conditions between the parties and will constitute a contract.

Contracts have a life span. That life span is called the “term” of the contract. Unless a term is extended, contracts expire at the end of their stated term. Some obligations may continue beyond the end of the stated term and those should be reviewed carefully.

Terminating a contract before the end of its term may be difficult, but not impossible. The contract itself will often include language about whether the contract can be terminated early and under what circumstances that is permitted. Most, if not all, recruiting contracts do not allow a person to end the contract for no reason at all.

In some cases, there may be a valid reason to terminate a contract early. For example, if a party fails to perform its obligations under the contract, the other party may try to terminate the contract early. When a party fails to perform its obligations, it is said to be in “breach” of the contract.

Can a Recruiter Be in Breach of Contract?

The answer is absolutely yes. Recruiters are good at ensuring applicants are well aware of their contractual obligations, leaving applicants thinking that only they could ever breach the contract. That is absolutely not the case. Recruiters can also be in breach of contract.

What Obligations Do Recruiters Have to Applicants?

Recruiters may have obligations expressly stated in the contract or offer letter. Examples may be listing specific items you will be reimbursed for, provision of an air ticket and temporary housing and a commitment that they will not require you to pay for attorney and related filing fees. However, in addition to stated obligations, recruiters also have implied obligations to their applicants.

Examples of implied obligations include:

• Processing of your application in a reasonable time frame. If you received a job offer more than 6 months ago and your petition has not yet been filed, this could be seen as a breach of contract on the part of the recruiter.
• Providing a job offer reconfirmation letter in a timely manner. If after months of waiting for your embassy interview, your recruiter in unwilling or unable to provide you with a bona fide job offer reconfirmation letter in time for your first scheduled embassy interview appointment, you may be able to make the case that the recruiter is in breach of contract.

Beware Liquidated Damages Clauses

Any job offers or recruitment contracts that includes a provision attempting to obligate you to liquidated damages in case of breach are to be avoided like the plague. In fact, the Philippine Overseas Labor Administration (POEA) and Philippine Overseas Labor Offices (POLO) have taken a very firm stand to prohibit these types of clauses from being included in any agreement.

In recent years there have been several high-profile court cases in the U.S. where international nurses have sued their recruiter/employer over liquidated damages claims. This has clearly set the precedent that liquidated damages provisions are not legal and not enforceable. If you have a job offer or employment contract that provides for liquidated damages, you can immediately request that this provision be struck from your contract.

Remember agreements or contracts are a two-way street. They create obligations on the part of all parties involved. In the case of an international nurse recruitment agreement or contract, the applicant certainly has clear responsibilities – but so does the recruiter or employer.

It is always recommended to amicably resolve any misunderstandings or disputes. If that is not possible then negotiating a settlement to end the contract that is equitable and fair to all parties is the moral and ethical thing to do. Simply changing your mind or deciding to pursue another opportunity is never an acceptable reason to abandon your contractual obligations. In cases of gross breach of contract on the part of a recruiter or employer such as abandonment of your petition or insistence of a substantial change to the terms initially agreed upon, you may be able to claim that your obligations under that contract are no longer enforceable against you.

For a more complete overview on international nurses’ rights when immigrating to the United States, click here to view a webinar on this topic from the Alliance for Ethical International Recruitment Practices and Government Affairs, CGFNS International. You can also check out these videos for additional information on understanding job offers and contracts.

Visit our FAQ page for Understanding Employer Contracts to learn more.