Tuition Reimbursement w/ a Twist!!!!

[glawson07]

What is the name of your state (only U.S. law)? California

Situation:
Currently pro per, involved in lawsuit for breach of contract regarding tuition reimbursement. Employer seeks repayment of entire amount per contract due to unjust enrichment, I contend that I owe nothing despite breach of contract and any repayment to employer would be unjust enrichment to the company. Approaching mediation where things should heat up a bit.

Contract:
"I understand and acknowledge that (a) if I receive tuition assistance through XXXX's Educational Assistance Program for courses related to a Masters of Business Administration degree, (b) if I complete the degree requirements, and (c) if I should voluntarily terminate employment with XXXX within 12 months of completing degree requirements, I will be responsible for paying back to XXXX 50% of total amount that was previously paid to me under the Educational Assistance Program."

Argument:
I remained employed with the company for six months following my degree completion. Company completed is obligation to pay for training; however I did complete partial employment service and am encouraging company to pro-rate the balance as such. Originally, I thought that the contract could be interpreted more as a penalty arrangement, which would be more difficult to enfore in court (so I thought). I felt that my former employer would have to demonstrate the damages that they incurred and how they were worse off due to my premature departure. The twist is that the company actually received reimbursement for my FULL salary and FULL educational benefit resulting from some grey area in a management agreement with one of our clients (extremely unethically IMO). The company actually received reimbursement from multiple clients for which I provided services while employeed with the company (not speculation, I actually made copies of the documents before I left the organization). My whole contention has been that my former employer is seeking repayment for damages that they simply have not incurred (or a benefit that, at the end of the day, they did not provide, but merely facilitated).

Do I have a legitimate case to argue repayment? Or, am I setting myself up for a bad time in court?

[tranquility]

The problem lies with the measure of damages. While more complex, the basic difference between tort and contract damages is in tort it is to be made whole and in contract it is the benefit of the bargain. You seem to be trying to measure by the tort standard and not the contract one.

These "expectation" damages can sometimes be very hard to measure. To deal with this, many contracts list the amount the parties would feel they expect in case of breach. This is called liquidated damages. Sometimes liquidated damages are way out of proportion to the reality of the contract. If so, the courts often find they are a penalty and not a reflection of contractual damages and reduce them.

In your case, if the penalty was twice the amount they paid for classes, then I suspect the courts would reduce or deny it as a valid liquidated damages clause. Here it seems like they are asking for half. Since I've seen full repayment for tuition for leaving too soon after completion contracts enforced by the courts, I suspect this 50% measure would be enforced.

Finally, I've not seen the pro rata argument work. It doesn't seem like it should, but I can't think of the principle of why it shouldn't off the top of my head. I just know I havene't seen a case of this type use it successfully. However, I don't read a lot of cases here regularly and could be wrong.

[glawson07]

Thanks for the feedback.

So the fact that my former employer passed my educational cost on directly to its clients resulting in no out-of-pocket expense to my former employer has no bearing on its ability to recover damages from the employment contract? This would mean that my former employer would actually profit from my departure, since 100% of the cost was recovered through other means. Are there no laws that prohibit double-recovery?

Again, thanks!

[SIN EATER]

If the contract you signed said 'pay back $___ of the costs incurred by the company for your tuition', I think your argument would win.

However, the wording you state is to reimburse the amount you received, not the amt of expense they incurred.
Ergo, it probably won't matter to the court whether they were reimbursed from other sources (if you could even get that in. File a Motion in Limine with that info just to get it before the court).

File for discovery regarding other employees to ensure they are not discriminatory in enforcing the tuition reimbursement. (google superior court of california & check out the forms - there are Interrogatories and Requests For Admission, etc. - don't go to a particular county sup crt website)

I'm surprised they didn't try to settle this.
Are they making your tuition reimbursement an example to all other employees ?

[glawson07]

My former employer is a large company and the HR department had no knowledge that the investment unit was allocating tuition to the clients. HR department sees a large sum paid to me for education and they immediately involve inside counsel. I attempted to speak on subject when I submitted my resignation, anticipating that I would owe the difference to make them whole again. Made very little progress and the issue was given to outside counsel. Shocking that a 90,000-plus employee company could not handle this from within. Nonetheless, the Plaintiff's attorney continues to ask me if I have a settlement position, which I have made it abundantly clear it is nowhere close to what they are requesting. I am considering drafting a formal settlement offer to see their reaction and get this thing past me. In all honesty, my pro per status does not bode well for me and I believe only encourages their pursuit. In addition, I have made it extremely easy for my former employer, as I have not had to make their attorney work to hard (i.e. no request for discovery, etc.). Yes, I believe it is discriminatory. I know of two other individuals that were not pursued. However, the difference between our circumstances is those individuals, although it is still technically a breachof contract, wait until their final quarter/semester and leave the company before the company can verify internally that degree requirements have been met. Since I stayed, it was relatively easy for them to confirm. The remaining vaste difference between my case and that of other employees at our firm, is that I worked for clients that could absorb the educational cost that my former employer passed on to them; whereas, other employees' tuition costs were paid and incurred by my former employer. I am struggling with what is actually FAIR and what the court of law will support. My feelings recently suggest that I should be leaning towards a settlement offer, as the courts may not be sympathetic to the circumstances and may allow for the company to double-recovery.

Thanks for the input and any more that you may have.

[SIN EATER]

Did you exhaust your administrative remedies ?

Did you grieve this, internally ?

Is there anyone in your chain of command to whom you can appeal ?

You are supposed to make a formal written offer in settlement; if the case settles for more to the plaintiff than your offer, you may be on the hook for their expenses.

If it is resolved for less than your offer, you shouldn't be charged for the other side's costs.

How much money is at issue ??

[SIN EATER]

Read about a 998 offer:

CODE OF CIVIL PROCEDURE
SECTION 998

998. (a) The costs allowed under Sections 1031 and 1032 shall be
withheld or augmented as provided in this section.
(b) Not less than 10 days prior to commencement of trial or
arbitration (as provided in Section 1281 or 1295) of a dispute to be
resolved by arbitration, any party may serve an offer in writing upon
any other party to the action to allow judgment to be taken or an
award to be entered in accordance with the terms and conditions
stated at that time. The written offer shall include a statement of
the offer, containing the terms and conditions of the judgment or
award, and a provision that allows the accepting party to indicate
acceptance of the offer by signing a statement that the offer is
accepted. Any acceptance of the offer, whether made on the document
containing the offer or on a separate document of acceptance, shall
be in writing and shall be signed by counsel for the accepting party
or, if not represented by counsel, by the accepting party.
(1) If the offer is accepted, the offer with proof of acceptance
shall be filed and the clerk or the judge shall enter judgment
accordingly. In the case of an arbitration, the offer with proof of
acceptance shall be filed with the arbitrator or arbitrators who
shall promptly render an award accordingly.
(2) If the offer is not accepted prior to trial or arbitration or
within 30 days after it is made, whichever occurs first, it shall be
deemed withdrawn, and cannot be given in evidence upon the trial or
arbitration.
(3) For purposes of this subdivision, a trial or arbitration shall
be deemed to be actually commenced at the beginning of the opening
statement of the plaintiff or counsel, and if there is no opening
statement, then at the time of the administering of the oath or
affirmation to the first witness, or the introduction of any
evidence.
(c) (1) If an offer made by a defendant is not accepted and the
plaintiff fails to obtain a more favorable judgment or award, the
plaintiff shall not recover his or her postoffer costs and shall pay
the defendant's costs from the time of the offer. In addition, in any
action or proceeding other than an eminent domain action, the court
or arbitrator, in its discretion, may require the plaintiff to pay a
reasonable sum to cover costs of the services of expert witnesses,
who are not regular employees of any party, actually incurred and
reasonably necessary in either, or both, preparation for trial or
arbitration, or during trial or arbitration, of the case by the
defendant.
(2) (A) In determining whether the plaintiff obtains a more
favorable judgment, the court or arbitrator shall exclude the
postoffer costs.
(B) It is the intent of the Legislature in enacting subparagraph
(A) to supersede the holding in Encinitas Plaza Real v. Knight, 209
Cal.App.3d 996, that attorney's fees awarded to the prevailing party
were not costs for purposes of this section but were part of the
judgment.
(d) If an offer made by a plaintiff is not accepted and the
defendant fails to obtain a more favorable judgment or award in any
action or proceeding other than an eminent domain action, the court
or arbitrator, in its discretion, may require the defendant to pay a
reasonable sum to cover postoffer costs of the services of expert
witnesses, who are not regular employees of any party, actually
incurred and reasonably necessary in either, or both, preparation for
trial or arbitration, or during trial or arbitration, of the case by
the plaintiff, in addition to plaintiff's costs.
(e) If an offer made by a defendant is not accepted and the
plaintiff fails to obtain a more favorable judgment or award, the
costs under this section, from the time of the offer, shall be
deducted from any damages awarded in favor of the plaintiff. If the
costs awarded under this section exceed the amount of the damages
awarded to the plaintiff the net amount shall be awarded to the
defendant and judgment or award shall be entered accordingly.
(f) Police officers shall be deemed to be expert witnesses for the
purposes of this section. For purposes of this section, "plaintiff"
includes a cross-complainant and "defendant" includes a
cross-defendant. Any judgment or award entered pursuant to this
section shall be deemed to be a compromise settlement.
(g) This chapter does not apply to either of the following:
(1) An offer that is made by a plaintiff in an eminent domain
action.
(2) Any enforcement action brought in the name of the people of
the State of California by the Attorney General, a district attorney,
or a city attorney, acting as a public prosecutor.
(h) The costs for services of expert witnesses for trial under
subdivisions (c) and (d) shall not exceed those specified in Section
68092.5 of the Government Code.
(i) This section shall not apply to labor arbitrations filed
pursuant to memoranda of understanding under the Ralph C. Dills Act
(Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1
of the Government Code).

[glawson07]

Thanks for the suggestions. Nobody really wanted to address the issue when I left, partly due to the different layers of the organization. Plantiff is seeking $32k per the contract. I would be willing to offer $14k, which is what would make them whole again. I really don't want to negotiate any higher, as $14k is what I feel they are actually out-of-pocket as a result of the whole experience. They did not have to replace me, my work was absorbed by current staff (I know because I continued to respond to emails and phone calls to assist w/ the transition even after I left the company). I even tried emailing the CFO to get her involved and weigh in on the decision; however, no such luck. Truely unfortunate how one could be a superstar one day, and then the unwanted step child the next. I don't whether it is pride or principal (or both) that has me resistant to giving in to the contract. I had to forefeit a considerable amount benefits when I left, which really makes the situation even more frustrating.

Do you know if I can still contact individuals within the organization to settle this, despite the Plaintiff retaining representation? If so, I have one other person that I may contact to try and resolve the matter.

[tranquility]

If the other party is represented, you should talk with the representative. Any one with knowledge or power to talk with you from the organization who does talk with you is an idiot who should be fired. And, might be if found out.

You had the benefit of the full amount. That is the amount you will almost assuredly owe. (Plus court costs and, perhaps [If in the contract, which they usually are.], attorney fees for the cost of enforcing the contract in breach.)

If you're thinking of doing this on you own, just pay them what they want as you have no chance. Otherwise, hire an attorney to help you through the minefield without accruing substantial additional costs.

[mistoffolees]

What is the name of your state (only U.S. law)? California

Situation:
Currently pro per, involved in lawsuit for breach of contract regarding tuition reimbursement. Employer seeks repayment of entire amount per contract due to unjust enrichment, I contend that I owe nothing despite breach of contract and any repayment to employer would be unjust enrichment to the company. Approaching mediation where things should heat up a bit.

Contract:
"I understand and acknowledge that (a) if I receive tuition assistance through XXXX's Educational Assistance Program for courses related to a Masters of Business Administration degree, (b) if I complete the degree requirements, and (c) if I should voluntarily terminate employment with XXXX within 12 months of completing degree requirements, I will be responsible for paying back to XXXX 50% of total amount that was previously paid to me under the Educational Assistance Program."

Argument:
I remained employed with the company for six months following my degree completion. Company completed is obligation to pay for training; however I did complete partial employment service and am encouraging company to pro-rate the balance as such. Originally, I thought that the contract could be interpreted more as a penalty arrangement, which would be more difficult to enfore in court (so I thought). I felt that my former employer would have to demonstrate the damages that they incurred and how they were worse off due to my premature departure. The twist is that the company actually received reimbursement for my FULL salary and FULL educational benefit resulting from some grey area in a management agreement with one of our clients (extremely unethically IMO). The company actually received reimbursement from multiple clients for which I provided services while employeed with the company (not speculation, I actually made copies of the documents before I left the organization). My whole contention has been that my former employer is seeking repayment for damages that they simply have not incurred (or a benefit that, at the end of the day, they did not provide, but merely facilitated).

Do I have a legitimate case to argue repayment? Or, am I setting myself up for a bad time in court?

You have to pay what you agreed to pay. Whether you think it's fair or whether the company got money from someone else isn't relevant.

The agreement states that you have to pay 50% of what they paid you. Pay it. (You could ask them nicely if they would reduce the amount, but they have no obligation to do so).

You're likely to spend more than it's worth in legal fees and still lose if you try to pay less than you signed for.