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ScottyMacEsq
ScottyMacEsq, Lawyer
Category: Employment Law
Satisfied Customers: 11319
Experience:  Licensed Texas General Practice Attorney
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I accepted a job in March of this year. At start of assignment,

Resolved Question:

I accepted a job in March of this year. At start of assignment, accepted $10K signing bonus. Terminated last week. They have stated they are keeping my final check (nearly $6K) and will be sending invoice for remaining balance. Is this legal?
Submitted: 10 months ago.
Category: Employment Law
Expert:  ScottyMacEsq replied 10 months ago.

ScottyMacEsq :

Thank you for using JustAnswer. I am researching your issue and will respond shortly.

ScottyMacEsq :

I'm sorry to hear about your situation. Did you sign any agreement regarding repayment if you were to quit or if they were to terminate you?

Customer:

no repayment terms defined or detailed in employee agreement

ScottyMacEsq :

In the event that there was not a repayment provision in any of the documentation, they could not hold you to a "nonexistent" clause. In that absence, there's no presumption that a bonus has to be repaid. There would need to be a clause in a contract that would say that you would have to repay this if you were to quit or be terminated.

ScottyMacEsq :

In that absence, that would be a "bonus" that they could not rescind at a later point, because the action that they gave it for (you signing on) would have already commenced.

ScottyMacEsq :

As such, I would send them a letter notifying them that you never agreed to any repayment terms, and as such, the bonus would be nonrecoverable. Send a demand letter demanding payment within 30 days, otherwise you will pursue legal action against him, seeking that amount plus any additional damages as allowed by law. Send this letter certified, return receipt requested, as well as a copy sent regular mail. Keep a copy for yourself, as well as the return receipt number so that you can show the court that you made a demand for the unpaid wages.

ScottyMacEsq :

(because it's wages that are being withheld, not the bonus, since the bonus was already paid).

ScottyMacEsq :

You can file a wage claim in PA here: http://www.portal.state.pa.us/portal/server.pt?open=514&objID=553573&mode=2

ScottyMacEsq :

You can also bring this in small claims court, if you so choose: Do a search on the web for your county and "small claims court." You should find either a website or phone number to the small claims clerk. Ask them what you need to do to bring such a lawsuit. The small claims clerk will give you guidance on how to file this suit and how to get the other party served with notice. You will receive a hearing date, at which you should present your evidence and ask for a judgment for the amount that you should be paid.

Customer:

Correction, this is a paragraph in another agreement I located:

ScottyMacEsq :

As part of any action, they would need to show some documentation that you agreed to repayment, and if they can't, they could not get repaid for that bonus, and could not retain your wages. That would be illegal.

Customer:

In the event that the Employee is terminated from his or her Employment by reason of the Employee's breach of terms of Employment (for cause) or the Employee shall elect to voluntarily terminate his or her Employment prior to the completion of the initial twelve months of Employment, the Employee agrees to repay to the company 100% of any travel and relocation costs and expenses incurred by the Company, 100% of training and scholarship costs incurred by the Company, 100% of any immigration admin costs and expenses, 100% of any sign in bonus and further to pay the Company Damages and Liquidated sum as decided by Federal court of Law. The Employee agrees and authorizes the Company to deduct and withhold all or part of the amount of such liquidated damages from any and all compensations or other payments that are otherwise due and owing to the Employee by reason of or upon Employee's termination. Any remainder not so withheld or paid to Company, the Employee shall owe to the Company, and the Company shall have all rights and remedies available in law or in equity as to enforcement of the terms of this Agreement, including injunctive relief, temporary and/or permanent and the right to reimbursement for all costs and expenses incurred in or by reason of collection of sums due and/or enforcement, including attorneys fees and court costs.

ScottyMacEsq :

And did you sign this agreement?

Customer:

In addition, I have not signed any termination papers. Got an email last Tuesday that it was my last day and to turn in my laptop and company property.

Customer:

Yes

ScottyMacEsq :

What was the reason that you were terminated for?

Customer:

I was not terminated "for cause". I was hired as a Regional Sales Director to build and develop an entirely new territory. In less than six months, Company didn't not have realistic sales expectations and terminated me.

Customer:

They placed a performance sales goal over a 30 day period, if not met possibility of termination. Was not written or formalized performance plan. Conversation with immediate report over coffee.

ScottyMacEsq :

The fact that you signed the agreement changes everything. The information that I posted above would apply if you had not signed an agreement to repay. This is pretty clear that you have agreed to repay,and that is completely enforceable. The repayment of the sign on bonus is a very common provision in employment agreements. In fact, I have never seen a sign on bonus that did not provide for repayment in the event of resignation or termination for cause (which was why I was a bit surprised that you said you never signed such a clause, and it makes sense now that you said that you did). So, it is enforceable. You can negotiate repayment and stretch it out over as long a period of time as you can get them to agree with. Any modification you can work out is to your advantage and an offer of proration is reasonable. Now this is still subject to the terms of your contract. They would have to terminate you for cause. And that might be something that you argue about in court as to whether your performance really did amount to a for cause firing. But if you were to develop and there were no reasonable targets, then it probably would not be for cause, and you could still do the things that I said above.

ScottyMacEsq :

Now you would want to bring this in small claims court, as it's not necessarily clear that they wrongfully withheld the wages. If it was clear that the wages were wrongfully withheld, that would be a wage claim.

ScottyMacEsq :

But to actually have a case about whether or not there was a breach and hence a requirement to repay, that would be something that a jury would have to determine.

ScottyMacEsq :

I would still send the demand letter and still file the claim in small claims court. Again, this clause says that you have to have been terminated "for cause" and if it's clear that it was not for cause, then they would still have to pay you.

ScottyMacEsq :

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!

Customer:

Thanks.

ScottyMacEsq, Lawyer
Category: Employment Law
Satisfied Customers: 11319
Experience: Licensed Texas General Practice Attorney
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