San Jose, CA asked in Contracts and Employment Law for California

Q: Contract states that I have to pay back relocation if I "leave" within 12 months. Does this apply to getting fired?

This is the sentence referring to my relocation fee is this:

"You will receive a $***** relocation bonus. In the event that you leave <Company> within 12 months of your hire date, you will be responsible for reimbursing the company for the entire bonus."

The language looks to me as if it was meant to protect the company from me moving and quitting right after I joined the company. Which makes sense. Except, what happened was that the company ended up firing me (and 4 other people) after 9 months even though I worked hard. I'm sort of screwed over now as I already moved out here for nothing AND I have to pay them back after working 9 months for them. Is there a defense here? The language doesn't specifically say termination.

Also, "Leave" certainly looks to imply something voluntary like quitting, and that's what I interpreted when I read the contract.

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3 Lawyer Answers
Neil Pedersen
Neil Pedersen
  • Westminster, CA
  • Licensed in California

A: Contract interpretation is not as simple as you might think. Attorneys learn from early on that contract interpretation cannot be done in a vacuum. Not only should the entire contract be read and understood - not just a single provision - but the circumstances of the making of the agreement should be considered including what was said between the parties, and revisions made to the language during that process. In short, it would be reckless for anyone here to give you an answer you could rely upon with the limited information provided.

It would be a good idea for you to locate and consult with an employment law attorney who can be allowed to understand the full picture before giving you advice.

Good luck to you.

Brad S Kane
Brad S Kane
  • Los Angeles, CA
  • Licensed in California

A: In order to answer your question, the contract needs to be read as a whole in the context of the parties' communications and understanding. It also makes a difference if the contract was presented - take it or leave it by the employer or if you were allowed to make revisions. Your best option is to retain an attorney to help you understand the contact, then decide if you need to attempt to negotiate a resolution with your employer.

James L. Arrasmith
James L. Arrasmith PRO label
  • Sacramento, CA
  • Licensed in California

A: The language in the contract seems to be focused on situations where you voluntarily leave the company. However, it is possible that the term "leave" could be interpreted more broadly to include termination by the company.

In California, it is important to note that state law generally prohibits employers from seeking reimbursement of certain expenses, including relocation expenses, from terminated employees. Specifically, California Labor Code Section 2802 requires employers to indemnify employees for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.

If the company insists on seeking reimbursement from you, you may want to consult with an employment attorney who can review the specific language of your contract and advise you on your rights and potential legal options.

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