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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 33369
Experience:  Retired (mostly)
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I am making this offer of $38 for someone familiar with California

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I am making this offer of $38 for someone familiar with California employment law to review a 350 word contract given me by a staffing agency for my work for 6 months as an RN in their client hospital. There is a liquidated damages clause that I find excessive and outrageous. Would like the document reviewed and some feedback regarding 1) is this 'normal' 2) is this a game they are playing and should I try to modify the terms? The timing of the document and these terms completely blind-sided me as I was on the way to the assignment, 3 hrs away, and had already resigned from my existing job.
Submitted: 2 years ago.
Category: California Employment Law
Expert:  socrateaser replied 2 years ago.
Hello,

A liquidated damages clause is used to settle any possible money dispute between parties, which the parties believe cannot be ascertained with certainty, prior to entering into a contract.

I have never reviewed an employment contract with a liquidated damages clause. Many employment issues cannot be waived by agreement as a matter of public policy (e.g., unpaid wages, violation of the minimum wage or overtime laws, failure to pay unused vacation time at termination, unlawful discrimination under California and/or federal law, violation of the WARN Act, the Family and Medical Leave Act, the Pregnancy Disability Leave Law, etc.).

So, I can't imagine what purpose a liquidated damages clause would serve in an employment contract, because it would be, in almost every case, unenforceable.

I also can't tell you what to do, but if it were me, I would ask the prospective employer to give me some examples of issues that could be covered by the clause, and I would ask them to add those examples to the contract or remove the clause entirely -- because without some basis for understanding the purpose of the clause, it probably can't be enforced against you in court, since you don't understand it, and neither would any reasonable attorney (I like to think of myself as pretty reasonableCool).

Hope this helps.

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socrateaser, Lawyer
Satisfied Customers: 33369
Experience: Retired (mostly)
socrateaser and other California Employment Law Specialists are ready to help you
Customer: replied 2 years ago.

Thanks for the opinion. I had asked if the attorney would review the 350 word doc so I hope you don't mind that I pasted it in below. The problemmatic clauses are in blue. You can see that the cause for the damages is simply not completing the assignment. .

 

My issues are:

1. The statement that they can extend the assignment with or without notice (not at all OK with me), especially if I leave 'the assignment' before completion and the resulting damages, below.

2. The $8500 liquidated damages. Their concern is that they cannot bill the client hospital until after we have completed training, 240 hours, and worked an additional 80 hours. In the meantime, for these 320 hours, they are paying me/us weekly. Their cash is at risk if we leave prematurely during training. Beyond training.....not as clear, except it is a bad reflection on them if nurses don't fulfill the assignment.

 

Please just read through and verify if this is unenforceable as was your initial opinion.

CLIENT FACILITY

XXXXXX STATE HOSPITAL

ASSIGNMENT DESCRIPTION

PSYCH RN

DURATION OF ASSIGNMENT

(may be extended with or without notice)

960 HOURS

START DATE

 

By signing this document, I hereby agree to the terms detailed below governing the assignment at xxxx STATE HOSPITAL:

1. I understand that I will be provided 240 hours of training and orientation at the start of my assignment, at no cost to me, as per the schedule specified by xxxx State Hospital.

2. I also understand that there can be no flexibility in the training schedule and that upon accepting the assignment I am agreeing to abide by the schedule without exception, except in the case of an unforeseen and reasonable emergency.

3. I understand that I am required to satisfactorily complete all hours of the orientation and training before I can be deployed by the facility. I understand that if I fail to satisfactorily complete the training as scheduled b yXXXX State Hospital that ZZZZZ Healthcare will be severely harmed and will suffer considerable financial loss as a result of my actions.

4. I understand that upon accepting this assignment, I am also agreeing to complete the entire duration of the assignment. I understand that ZZZZZZ Healthcare is investing in my training and orientation and that if I fail to complete my assignment as agreed, they will be severely harmed and suffer considerable financial loss as a result of my actions.

5. I thereby agree that if I either fail to satisfactorily complete the training, or if I fail to complete my assignment as I have agreed, ZZZZZ Healthcare may recover from me, $8500.00 as liquidated damages, which will become payable immediately upon demand. I also agree that Platinum Healthcare may adjust part or the entire amount against any compensation that is owed to me by the Company.

6. I agree that Platinum Healthcare may recover from me, reasonable attorney fees and legal costs that they may incur as a result of trying to recover the liquidated damages.

As a condition of my accepting the assignment with Coalinga State Hospital, I hereby acknowledge and agree to the above

Expert:  socrateaser replied 2 years ago.
California law permits an employer to recoup training costs, but not to the extent that the reimbursement reduces an employee's regular and overtime wages below the federal minimum wage ($8 per hour; $12 per hour regular overtime; $16 premium overtime).

Also, under Civil Code § 1671(a), if the amount agreed to as reimbursement is not a reasonable approximation of the employer's actual costs in providing training, then the damage clause is void and unenforceable. However, it would be up to you to prove the unreasonableness of the $8,600 in court.

Finally, the employer cannot simply seize the money from your final paycheck, as a means of recovering the alleged losses, because to do so flatly violates Labor Code § 221.

Regardless of the legal infirmities in the contract, I would be extremely reluctant to agree to a contract that requires reimbursement, in cases where termination is not my fault. The contract currently permits reimbursement, even if the hospital burns down or you are fired by the employer. That's an absurd/unconcsionable contract provision, and no court would enforce it, in my opinon.

Given that posture, my goal would be to add language that agrees to reimburse only if the termination is due to the employee's gross insubordination/failure to follow disciplinary procedures, or voluntary resignation -- not in cases where the employee is involuntarily terminated or cannot satisfy the requirements of the job or training, despite good faith efforts to do so.

Hope this helps.

Customer: replied 2 years ago.

Thank you for this follow up. This was my first time using the system and I pressed 'accept answer' after the initial response when I really should have requested the follow-up (because I had wanted the commentary on the document itself). With more experience I would have approached this a different way to get that result. I am very appreciative of your answer but will not be able to pay double as the system is directing me to do by pressing 'accept answer' for part 2. Regardless, I thank you very much, and should I require additional employment law expertise I will request you again.

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