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  1. #1

    Default What is Your Liability for Repaying a Relocation Bonus After You Resign

    My question involves labor and employment law for the state of: California

    I was hired by a company in 2014 and received a relocation bonus of $18000 to move from Brazil, to Los Angeles, CA. I signed a contract with them that said that I would have to return that bonus if I left the company before two years. Despite that, I decided to leave the company 3 months ago, after my 1 year anniversary with them. On my last day, I discussed the bonus situation with HR over the phone. They said that they would send me a promissory note to sign before leaving along with the details on how to pay them back. However, they never got in touch again. I ended up not signing any other documents or paying anything.

    I want to know what is my liability in this situation. Since I have not paid them yet, can my company come back after me charging more than the actual bonus? For example, can they charge interest, attorney or recollection fees? What would be the implications if I just wait for them to contact me?

    I have pasted below the most important parts of the contract that I signed with them in order to receive the bonus.

    3. Period of Time for Reimbursement Obligations
    Employee will be obligated to reimburse COMPANY for any and all Relocation Expenses if
    he or she Terminates Employment within 24 months from [relocation date or
    employment start date, as applicable] (the “Relocation Date”).

    5. Amount of Relocation Expenses for which Employee Must Reimburse COMPANY
    If Employee Terminates Employment during the 24-month period after the Relocation
    Date, Employee must reimburse COMPANY for any and all Relocation Expenses incurred
    or reimbursed by COMPANY in connection with the relocation in accordance with the
    repayment schedule in the chart below.

    Repayment Schedule
    Months of Employment Expenses to be Repaid
    Months 1 – 12 100%
    Months 13 – 16 75%
    Months 17 – 20 50%
    Months 21 – 24 25%

    6. Employee Consents to Salary Reduction
    If Employee Terminates Employment and has an obligation to reimburse COMPANY under
    this Agreement, to the extent allowed by applicable law, Employee authorizes COMPANY
    to deduct the amounts owed for Relocation Expenses from Employee’s outstanding
    salary, vacation payments, bonuses, or any other payments to be made by COMPANY to
    Employee. If amounts owing pursuant to this Agreement remain unpaid after
    Employee’s last paycheck from COMPANY, Employee agrees to pay COMPANY such
    amounts upon employment termination or, at COMPANY’s discretion, execute a
    promissory note, in a form and substance satisfactory to COMPANY, for the amounts that
    remain unpaid by Employee.
    Thank you very much

  2. #2
    Join Date
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    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    If you had waited a month you would have saved yourself $4500.

    since you neither repaid them or signed a promissory note there is a breach of contract. They can sue you now and obtain a judgment. Unless there is something allowing adding legal costs they are not likely to recover them but if you hire a lawyer, you will pay your legal costs.

    I have not checked for California but many states allow interest to be added to a judgment.

  3. #3
    Join Date
    Mar 2013
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    18,340

    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    Quote Quoting carlosgsouza
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    I want to know what is my liability in this situation. Since I have not paid them yet, can my company come back after me charging more than the actual bonus? For example, can they charge interest, attorney or recollection fees? What would be the implications if I just wait for them to contact me?
    Pre-judgment interest - No. Not unless there is a prejudgment interest provision in the contract.

    Post-judgment interest - Yes. CA Code of Civil Procedure 685.010 allows for 10% interest to accrue on an unsatisfied judgment from the date of entry of the judgment but also allows the legislature to adjust that rate. You can check with your local Superior Court for the current interest rate.

    Attorney fees for pursuing the lawsuit - Generally, no, but can be assessed against you if your contract has a bilateral attorney fee provision, basically saying that loser pays winner's attorney fees.

    Post-judgment attorney fees - Yes, for any costs involved in enforcing the judgment.

    Plaintiff's court costs - Yes. Before, during, and after judgment.

    All of the above presumes that your former employer wins the lawsuit.

  4. #4
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    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    Quote Quoting adjusterjack
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    All of the above presumes that your former employer wins the lawsuit.
    Which it is likely to.

  5. #5
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    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    Quote Quoting adjusterjack
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    Pre-judgment interest - No. Not unless there is a prejudgment interest provision in the contract.
    For the sake of completeness, the operative statute is Sec. 3287(b) of the Civil Code, under which prejudgment interest is not awarded in contract cases where the amount of damages is liquidated, that is to say, when the amount due or to become due is fixed by law or by agreement between the parties.

  6. #6

    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    Thank you everyone for providing such complete answers.

    I am putting the money together to pay them back and if, in the meanwhile they decide to sue me, I will just pay them back without questioning. According to what I understood from your answers, if that happens, I will not have to pay them more than the amount I originally own them, right?

    Thank you

  7. #7
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    Mar 2013
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    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    Quote Quoting carlosgsouza
    View Post
    Thank you everyone for providing such complete answers.

    I am putting the money together to pay them back and if, in the meanwhile they decide to sue me, I will just pay them back without questioning. According to what I understood from your answers, if that happens, I will not have to pay them more than the amount I originally own them, right?

    Thank you
    Sorry, but once they actually file the lawsuit, they've incurred court costs and attorney fees that they will expect you to pay before they will drop the lawsuit.

    If you are going to pay, make sure you do it in a hurry and get in before the lawsuit gets filed.

  8. #8

    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    I see. Do I have to pay for their attorney fees even if my contract does not have a bilateral attorney fee provision? What is the expected cost for court fees?

    Thank you very much.

  9. #9
    Join Date
    Oct 2006
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    16,474

    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    Quote Quoting carlosgsouza
    View Post
    I see. Do I have to pay for their attorney fees even if my contract does not have a bilateral attorney fee provision? What is the expected cost for court fees?

    Thank you very much.
    Are you remaining in the US, legally, or are you returning/returned to Brazil? If you returned to Brazil, that could explain why they have chosen not to pursue you.

  10. #10

    Default Re: Relocation Bonus Supposed to Be Paid Back, but Company Never Asked for It

    I am still in the US. I believe they have just forgotten about it altogether. There is a huge reorganization going on in the HR department of my previous company and some of the people who I was in touch with were let go.

    I considered just sitting quiet and not paying the back unless they pursue me, but I feel bad about that.

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