My question is regarding a relocation pay-back clause. I accepted a postion with my company that involved moving from CA to TN in February of 2009. The company gave me a lump sum (after tax) of $10,000 to cover relocation and moving expenses. Since that time, I’ve decided that my long term goals don’t align with my company’s any longer. I’m looking to leave and actually have a new job opportunity on the table that I’m seriously considering.
My problem is that when I went back and looked at the contract that I signed for the new position, it clearly states that if I leave the company within 12 months of the hire date, I am liable to pay back all (or a part) of my relocation expenses to the company.
With this in mind, here are a few questions for you:
1) Is this for real? Would a company really demand that I pay the relocation back? If so, how much do you think I would owe them? Would it be pro-rated for the number of months I worked in the position?
2) Is this enforceable? How would HR go about collecting the amount that they deem I owe? What’s stopping me from just telling them to “shove it”?
3) My company currently owes me some sales commissions that have not yet been paid to me. Should I suggest that these funds be applied to cover some or all of what the company deems to be my balance due?
Let me tell you a little story. Earlier this year my husband accepted a new job that required an international relocation. Part of his contract states that if he quits in less than two years he has to repay. Do you know how freaking expensive an international relocation is? Do you? It can easily run into 6 figures (in either Swiss Francs or dollars!). Before he signed on the dotted line, we had this discussion:
Him: We’re in this for two years, no matter what.
Me: Even if your boss turns into a werewolf.
Him: Right. Because we’re not repaying an international relocation.
You, apparently, didn’t have this chat with yourself.
Now, the chances of you finding the job you really want and starting between now and February are pretty slim (unless you already have something lined up), so you are probably worrying for nothing.
But, yes, you have to repay it. Legally and morally. You signed the contract. You took the money. It’s your obligation to repay. No whining on that. The pro-rating would depend on how it is written. My guess would be at 6 months you’d have to repay 50%.
Can they come after you? You betcha! Will they? Depends on the size of the company and how annoyed you’ve made them. Would I count on them just sighing and saying, “Oh well! Steve ran off without repaying!” Absolutely not. They can take you to court and since you are freaking out about repaying $10,000 my guess is they have more resources then you do. In all honesty, they probably won’t take you to court, but they could and if they did they’d win.
If they still owe you money, certainly you can negotiate with them on how those funds would be applied. However, this is not a question best asked until you’ve already landed the next job.
This also means you will leave this company on bad terms. The company and you may have different long term goals, but you’ll need the reference. Even if you were stellar employee, your boss is going to have a bad taste in his mouth about this.
Repeat after me: I will repay the money I owe. I am legally and morally obligated. I will repay the money I owe. I am legally and morally obligated.
Now, let’s address another issue: This company doesn’t align with your long term goals. Got it. You’ve only been there 7 months. If it’s a goal issue, staying a few more months won’t hurt. Leaving now will leave you a big black mark on your resume. You must be prepared to be asked, forevermore, “Why did you stay at Acme Corp only 7 months?” And, no you can’t put: District Manager, Acme Corp 2009 on your resume. We see through that. We have special glasses that show us that years only means you didn’t work very much of that year. (Exception, if you worked 1998-2009, I’ll allow years only. But, I still don’t like it.)
If this were a 3 year repayment clause I can see why you might want to leave sooner than that, but it’s a 12 month one and it’s more than half gone. Suck it up and stick it out, or pay up.