Can You Avoid Repaying Relocation Expenses Based on Employer Misrepresentations
Hi all -
Not sure where to start in describing what has been a complete nightmare of a situation. My questions probably cross into the boundaries of several sub-message boards here, but I think this is the best catch-all.
I was recruited away from a Fortune 100 that always tops global lists of best places to work and where I was on a great career trajectory. I based my decision to leave on several factors:
- More money (in base, signing bonus, performance, relo and free medication for a condition I have, which is $1500/yr out of pocket)
- The promise of joining a function that I was told (after asking numerous times in a day-long panel interview): has a great culture; is global in its service; and has a prominent seat at the table (I.e., is valued as a strategic business partner)
- The response to my question about whether the company was setting itself up for an acquisition by or merger with a particular competitor and the likelihood of such a transaction would be.
It quickly became apparent that the interview and everything I was told was either part of a facade (one panelist - when we were discussing issues with the company and how they were inconsistent with what i heard in the interview - said, "Oh [my name], the things they don't tell you in interviews.") or plain incompetence.
The nightmare began with the relo process. After receiving a full-price offer from the first person who looked at my house, the prospective buyer walked when the company made me show pre-inspection documentation (that a real estate attorney I later contacted said was all about CYA and as overstated as possible without being inaccurate). With this albatross around my neck, for months prospective buyers would walk when they saw the documentation (that, mind you, showed conditions that no longer existed because I had them professionally addressed). The stress from this resulted in documented higher blood pressure (which I dont historically have) and higher a1c levels.
It was not until I offered to pay a penalty to sell the house independently that I was relieved of the albatross. Unsurprisingly, I found a buyer and got 98% of the initial list price with a week of doing so. (On the buy-side, I was "strongly urged" to use a certain realtor who was great friends with our senior-most HR leader and owner of the relo policy...he was a fat cat who wad not interested in helping me find a house, and I'm sure he was shocked when I told him to pound sand.)
Then, I found out the medication I was told is free was, in fact, more than what I paid for it through my prev. employer's plan.
Then I learned that the culture is actually terrible. From being told I have to be here by 8 a.m. (not a min later), take my lunch for up to an hour only between 11.30 a.m. and 1.30 p.m. and cannot wear polos (despite the fact that people in other departments wear them freely), to learning that our incompetent HR department has been failing for years to fix a widely acknowledged morale issue around culture.
Then it became apparent that our function may be the least valued in the entire company (stark contrast from what i was told by multiple panelists and from what I was accustomed to with my previous employer). Rather than strategic business partners, when we're lucky, we are viewed as monkeys at the end of a check-the-box process line.
Then it became apparent that not only was this not really a global opportunity (I was lured with promises of trips to Barcelona, India and elsewhere), but it wasn't even U.S. opportunity. Hell, we don't really do anything for anyone outside of our HQ building.
There have been many other disappointments in the first six months, but here is the ultimate kicker: 4 months after moving my family here, the company announces it is merging with the very company I inquired about when considering the offer (the one I was told there was a very low chance of that occurring). What's more is that our S-4 filing documents at least 20 meetings and calls between the two CEOs as far as 8 months before i interviewed, with regular meetings virtually every subsequent month. Given the aforementioned HR leader's (borderline inappropriate) closeness with our CEO and my realtor, i feel like the right people knew the full picture and should have given a more accurate response to my merger question.
Oh, and one other thing even more sinister than the merger announcement is this: when they announced the new company's org structure, our department was the only one left out of it, and this wasn't an oversight.
So, with all of that (and many, many other issues), if I were to secure another opportunity, would I have a legal leg to stand on to not repay any of the bonuses or relo (since reality is far from the information i was given and on which i based my decision)?
And taking it even further, could I sue (particularly if I dont make the cut in the new company) for punitive damages based on an offer that wasn't in good faith?
And for good measure, given my lack of decision-making authority and the fact that I do not manage people, i almost feel like im misclassified as exempt. Curious to know what you think.
Thanks for reading this little novella and providing any advice you may have.
Re: Does Misrepresentation of Various Items Void Relo Agreements
Sure, you can sue. I hope you have $25k for an initial retainer to give your attorney.
With regard to the real estate disclosures, that is a document you completed, right? Questions like "has the roof ever leaked", etc. In most jurisdictions these days if there is a hidden defect that a buyer could not readily observe, you knew about it, and didn't disclose it, you're on the hook. So yes, it's a CYA document - but it's your "A" that's being protected. If the disclosures were inaccurate, that's on you.
As far as your "kicker" goes, the company would have been subject to all sorts of legal ramifications if it has illegally disclosed to you the negotiations for its sale to you.
The rest of your "issues" sound more like they fall in the category of disappointment. If you can point to a specific objective misrepresentation the company made to you, on which you relied, then there could be some valid claim of fraudulent inducement. But you'd better have far more than your personal disappointments as evidence.
Re: Does Misrepresentation of Various Items Void Relo Agreements
Quote:
Quoting
DupedOnOffer
So, with all of that (and many, many other issues), if I were to secure another opportunity, would I have a legal leg to stand on to not repay any of the bonuses or relo (since reality is far from the information i was given and on which i based my decision)?
That depends on the terms and conditions of your employment contract. Do you have one? What does it say about paying back bonuses or relo money? What promises did the employer make you as part of that written agreement.
Quote:
Quoting
DupedOnOffer
And taking it even further, could I sue (particularly if I dont make the cut in the new company) for punitive damages based on an offer that wasn't in good faith?
You can sue for actual damages (if they are calculable) but punitive damages is just not going to happen. Further, I agree with Bubba Jimmy that you'll need a barrel full of money to give to a lawyer to handle this for you. It's not something that any lawyer is going to do on contingency. Call around if you think other wise.
Quote:
Quoting
DupedOnOffer
And for good measure, given my lack of decision-making authority and the fact that I do not manage people, i almost feel like im misclassified as exempt. Curious to know what you think.
Whether you are exempt or non-exempt is an entirely different issue and can be easily determined with a look at the US DOL website:
http://www.dol.gov/elaws/esa/flsa/screen75.asp
If you find out you are non-exempt you can file a complaint with the US DOL as well as your state's DOL.
Re: Does Misrepresentation of Various Items Void Relo Agreements
Thanks. Re: the disclosure, the doc to which I'm referring was different (above and beyond the comprehensive disclosure form I completed). It was a third-party write-up of an independent inspector's report. (I had to have my own inspection - above and beyond the buyer's inspection.) The inspector told me the only issues he saw were some old GFIs and potential non-hazardous mold in the attic. I get the inspection report back and it was riddled with errors and speculation (there might be mold here, here and here). It was written and presented in a way that horrified buyers. Ultimately a mold test concluded only trace amounts existed and could be remediated with household cleaners (professional remediation was not recommended). Anyway, it's pretty clear that that document was the problem, because when I was permitted to show only the disclosure (which I updated based on the virtually uneard-of seller's inspection report), the house sold within a week. I'm comfortable with how I handled that part of the process, having consulted a real estate attorney before proceeding
Regarding "objective" misrepresentation, I'm not sure how to get more objective. The culture sucks (and there's considerable documentation of this that goes back years). The group is viewed basically as value-less (and given the results I've seen and which has been par for many years apparently, I can't blame others for having this view of us). And the role is not at all global. Period. The company is, but my job is not.
Re: the kicker, they may not have been able to disclose the situation, but the response was this (as told to and relayed to me by a head hunter): we are on level 2 when it comes to that sort of thing; we do not think mergers or acquisitions are likely until level 4 or 5 (keep in mind this was 8 or 9 months after the conversations started). This is coming from the talent acquisition manager. A CYA and more telling response would have been "we dont know" or "we can't comment," but instead he went the extra mile and provided decision-altering info.
Not sure if this changes your opinion at all, and I do sincerely appreciate your response (hoping others will weigh in).
BtW, I dont want to go to court and would rather avoid it all costs.
Edit: adjusterjack - thanks for your response; i was in the middle of responding to bubba when you posted.
Re: Does Misrepresentation of Various Items Void Relo Agreements
Quote:
Quoting
DupedOnOffer
Regarding "objective" misrepresentation, I'm not sure how to get more objective. The culture sucks (and there's considerable documentation of this that goes back years). The group is viewed basically as value-less (and given the results I've seen and which has been par for many years apparently, I can't blame others for having this view of us). And the role is not at all global. Period. The company is, but my job is not.
Re: the kicker, they may not have been able to disclose the situation, but the response was this (as told to and relayed to me by a head hunter): we are on level 2 when it comes to that sort of thing; we do not think mergers or acquisitions are likely until level 4 or 5 (keep in mind this was 8 or 9 months after the conversations started). This is coming from the talent acquisition manager. A CYA and more telling response would have been "we dont know" or "we can't comment," but instead he went the extra mile and provided decision-altering info.
Not sure if this changes your opinion at all, and I do sincerely appreciate your response (hoping others will weigh in).
BtW, I dont want to go to court and would rather avoid it all costs.
Edit: adjusterjack - thanks for your response; i was in the middle of responding to bubba when you posted.
Unfortunately, the hype that a prospective employer tells you during the hiring process is often no more actionable than a car dealer telling you that a car is a "cream puff" or "driven on Sunday by a little old lady from Pasadena."
Similarly, all the embellishments that a prospective employee tells the employer is also not actionable. If you want to go through life not being sued by every employer who thinks you "misrepresented" yourself then you have to understand that you don't get to sue every employer whose job conditions and opportunities don't measure up to the employer's hype.
But you haven't answered the question about the employment contract and there isn't anything else I can comment on without knowing if you have one and what it says.
Re: Does Misrepresentation of Various Items Void Relo Agreements
Here's essentially what the agreement says:
Company finds it necessary to relo employee to a particular company office, and employee desires to relo that office.
For good and valuable consideration, incl the relo of the undersigned individual for the purposed of continued employment, co and employee agree as follows:
- co will reimburse employee in amount equal to move employee and his fam to [city] as describes in Co's relo policy.
- the full amount of reimbursed relo will be forgiven by the co in its entirety if the emp remains for one year from the start date
- if emp voluntarily terms his employment with the co within one year from start date of his assignment in new location, the emp will owe the full amount of relo
- [IRS tax paragraph]
- any events other than those described in para 3 above (presumably bullet above IRS) which prevent employee from being employed by co on or after the date of this agreement, incl but not limited to death or disability of employee, shall cause the term of this agreement to expire on the employee's last date of employment, at which Tim the full amount of relo will be forgiven in its entirety
- agreement is bound by Virginia domestic law
- agreement shall constitute the entire agreement between the parties hereto and replaces and supersedes all prior agreements, written or oral, relating to the subject matter hereof between the parties to this agreement
------
Questions:
Given my diminished role as a result of all internal customer activities ceasing due to the merger and my department's noticeable lack of inclusion in the new org structure, how successful could I be in claiming involuntary resignation (this agreement only mentions voluntary resignation)?
Given that I have a disability (Type 1 diabetes) and my health has gotten significantly worse since joining this company and dealing with the relo and merger processes, as well as the indefinite period of uncertainty, what say you about claiming a disability to continue working under these conditions?
Re: Does Misrepresentation of Various Items Void Relo Agreements
If that's the entire contract I don't see anything in there promising that you'd be successful at the job or that your duties would be one thing or another or that they wouldn't change for the better or for the worse.
Quote:
Quoting
DupedOnOffer
Given my diminished role as a result of all internal customer activities ceasing due to the merger and my department's noticeable lack of inclusion in the new org structure, how successful could I be in claiming involuntary resignation (this agreement only mentions voluntary resignation)?
Not successful at all. Any time you accept any job there is always the possibility that the job will change in ways that you don't like. That's how work works. I've had it happen to me lots of times. My recourse was (as is yours) to find another job elsewhere.
Quote:
Quoting
DupedOnOffer
Given that I have a disability (Type 1 diabetes) and my health has gotten significantly worse since joining this company and dealing with the relo and merger processes, as well as the indefinite period of uncertainty, what say you about claiming a disability to continue working under these conditions?
I don't think anybody will buy it since it's a pre-existing condition and everybody gets stress on the job.
But if you feel that the job stress exacerbated the diabetes you are welcome to consult a workers compensation attorney.
Bottom line, I think you are stuck with the one year requirement unless your employer fires you. And I suggest you be real careful about giving him a reason because he might just sue you for the relo anyway if he suspects that you just slacked off to get yourself fired.
Re: Does Misrepresentation of Various Items Void Relo Agreements
Quote:
Quoting
adjusterjack
If that's the entire contract I don't see anything in there promising that you'd be successful at the job or that your duties would be one thing or another or that they wouldn't change for the better or for the worse.
Not successful at all. Any time you accept any job there is always the possibility that the job will change in ways that you don't like. That's how work works. I've had it happen to me lots of times. My recourse was (as is yours) to find another job elsewhere.
I don't think anybody will buy it since it's a pre-existing condition and everybody gets stress on the job.
But if you feel that the job stress exacerbated the diabetes you are welcome to consult a workers compensation attorney.
Bottom line, I think you are stuck with the one year requirement unless your employer fires you. And I suggest you be real careful about giving him a reason because he might just sue you for the relo anyway if he suspects that you just slacked off to get yourself fired.
Or lays you off as part of the restructuring in the merger.
Re: Does Misrepresentation of Various Items Void Relo Agreements
Thanks all. Not what I was hoping to hear, but thanks nonetheless.
Just one more scenario (I think). I'm a little more than halfway to the year mark, but as jack suggested, I've absolutely been looking elsewhere to make sure I have a chair when the music stops. Say I get an offer and the offerer is (understandably) unwilling to wait until mid-Sept to let me start. If I go to my people and say "Look, this hasn't worked out the way any of us expected, and given that you dont know whether you have a place in our new company, let alone whether I will (or whether you'll have any say in the matter), I've found a new job and would like to released from our agreement without penalty." If they say no and I have to decline an offer, and then later (when the offer is no longer on the table) I'm laid off, would I have any recourse? (I.e., could I go after damages and what would the likelihood of success be?)
Re: Does Misrepresentation of Various Items Void Relo Agreements
Quote:
Quoting
DupedOnOffer
Thanks all. Not what I was hoping to hear, but thanks nonetheless.
Just one more scenario (I think). I'm a little more than halfway to the year mark, but as jack suggested, I've absolutely been looking elsewhere to make sure I have a chair when the music stops. Say I get an offer and the offerer is (understandably) unwilling to wait until mid-Sept to let me start. If I go to my people and say "Look, this hasn't worked out the way any of us expected, and given that you dont know whether you have a place in our new company, let alone whether I will (or whether you'll have any say in the matter), I've found a new job and would like to released from our agreement without penalty." If they say no and I have to decline an offer, and then later (when the offer is no longer on the table) I'm laid off, would I have any recourse? (I.e., could I go after damages and what would the likelihood of success be?)
You can certainly ASK for the relo to be forgiven but if the employer says no and you don't take the other job you won't have any recourse if they fire you later.
They'll make damned sure that it's due to well documented performance issues.
Sorry, but there's no way you win this.
If you find a job that pays a lot more money you'll be able to afford to pay back the relo if you quit.
Otherwise wait until July or August to start looking.
Just don't get into any more relo or signing bonus deals that require payback.