Paying back money to employer?

[perpetstudent]

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

This is a little bit complicated for me to explain, but I'll try my best! My fiance was working as a personal trainer for several years at Gym A. The way that pay works there is that the gym pays their trainers a percentage of their monthly sales, typically a 60% commission. So, say that a member signs up with him for 3 months of training and pays $1000. At the end of the month that he made the actual sale, the gym would pay him his 60%, which would be $600. So basically they gave him his whole cut of the sale the first month, rather than splitting it up over the 3 months the member signed up for.

This has now become a problem because at the beginning of the month, my fiance accepted a position that is a better career opportunity for him at another gym, Gym B. He put in his letter of resignation at Gym A and has agreed to still work part-time at Gym A until the end of the month so that he could finish off whatever remaining sessions he has with clients there. However, one of his clients paid for six months of training, and at the end of the month when my fiance leaves Gym A for good, she will have three months of training left that she paid for. My fiance has offered to her that he can finish up those three months of sessions with her at Gym B, which is nearby. The client is totally okay with that and willing to do that because she really wants to stay with him as her trainer. However, the manager at Gym A is having a hissy fit about that and is saying that it's not okay. He is now demanding that my fiance pay back the money that he was already paid for the sale that he made a couple months ago, which amounts to $1400, and has threatened to sue my fiance if he does not pay the money.

The thing is that that has never been the policy there. The policy has never been that if a trainer leaves or is fired, that they have to give money back to the gym that they were already paid for the sales they made months ago. In fact, my fiance has asked about what would happen in that scenario many times. Since they pay their trainers the commission on their sale upfront, then what happens if a trainer leaves and hasn't completed all the sessions a client paid for? And he has repeatedly been told that if that happens and a trainer leaves, then the gym just needs to swallow those costs and have another trainer finish the remaining sessions for free. Actually in the past, a situation like that did occur. A trainer disappeared and never came back but had a client with three months of paid sessions left. So the manager begged my fiance to finish off those 3 months with the client for free, which my fiance agreed to and did.

But now all of a sudden the manager is changing his tune and demanding that my fiance pay back $1400 to the gym. Legally do we have to do that? We're planning a wedding and I'm a full time grad student, so to us that is a substantial amount of money right now. It also doesn't really make sense to us since it's not like my fiance would be leaving his client high and dry. He will be honoring and completing those sessions left with her, just at a different location, which she has absolutely no problem with at all.

 

[swalsh411]

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[perpetstudent]

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Ah, didn't realize that.. thank you!

 

[swalsh411]

So you're asking if it's OK for him to cancel a service he has already been paid to provide AND keep the money?

I think you know the answer to that.

edit: The whole thing about doing it at another gym is irrelevant. The gym he works at now is the one that paid him.

 

[perpetstudent]

So you're asking if it's OK for him to cancel a service he has already been paid to perform AND keep the money?

I think you know the answer to that.

No, he would NOT be canceling the service, that's what I'm saying. He would be completing the sessions that were paid for, just in a different location.

 

[LdiJ]

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

This is a little bit complicated for me to explain, but I'll try my best! My fiance was working as a personal trainer for several years at Gym A. The way that pay works there is that the gym pays their trainers a percentage of their monthly sales, typically a 60% commission. So, say that a member signs up with him for 3 months of training and pays $1000. At the end of the month that he made the actual sale, the gym would pay him his 60%, which would be $600. So basically they gave him his whole cut of the sale the first month, rather than splitting it up over the 3 months the member signed up for.

This has now become a problem because at the beginning of the month, my fiance accepted a position that is a better career opportunity for him at another gym, Gym B. He put in his letter of resignation at Gym A and has agreed to still work part-time at Gym A until the end of the month so that he could finish off whatever remaining sessions he has with clients there. However, one of his clients paid for six months of training, and at the end of the month when my fiance leaves Gym A for good, she will have three months of training left that she paid for. My fiance has offered to her that he can finish up those three months of sessions with her at Gym B, which is nearby. The client is totally okay with that and willing to do that because she really wants to stay with him as her trainer. However, the manager at Gym A is having a hissy fit about that and is saying that it's not okay. He is now demanding that my fiance pay back the money that he was already paid for the sale that he made a couple months ago, which amounts to $1400, and has threatened to sue my fiance if he does not pay the money.

The thing is that that has never been the policy there. The policy has never been that if a trainer leaves or is fired, that they have to give money back to the gym that they were already paid for the sales they made months ago. In fact, my fiance has asked about what would happen in that scenario many times. Since they pay their trainers the commission on their sale upfront, then what happens if a trainer leaves and hasn't completed all the sessions a client paid for? And he has repeatedly been told that if that happens and a trainer leaves, then the gym just needs to swallow those costs and have another trainer finish the remaining sessions for free. Actually in the past, a situation like that did occur. A trainer disappeared and never came back but had a client with three months of paid sessions left. So the manager begged my fiance to finish off those 3 months with the client for free, which my fiance agreed to and did.

But now all of a sudden the manager is changing his tune and demanding that my fiance pay back $1400 to the gym. Legally do we have to do that? We're planning a wedding and I'm a full time grad student, so to us that is a substantial amount of money right now. It also doesn't really make sense to us since it's not like my fiance would be leaving his client high and dry. He will be honoring and completing those sessions left with her, just at a different location, which she has absolutely no problem with at all.

Unless the Gym has to pay the client back or the Gym isn't going to get paid by the client, I don't see where they have grounds to ask for any money back.

 

[swalsh411]

No, he would NOT be canceling the service, that's what I'm saying. He would be completing the sessions that were paid for, just in a different location.

He was paid by the gym to perform at a service at that gym. He works for the gym, not the customer.

Unless the Gym has to pay the client back or the Gym isn't going to get paid by the client, I don't see where they have grounds to ask for any money back.

I'm pretty sure this customer who paid for X sessions isn't going to be OK with not getting what they paid for. So either the gym would have to pay somebody else to do the training or refund the customer.

 

[LdiJ]

He was paid by the gym to perform at a service at that gym. He works for the gym, not the customer.



I'm pretty sure this customer who paid for X sessions isn't going to be OK with not getting what they paid for. So either the gym would have to pay somebody else to do the training or refund the customer.

Yes, but only for a pro-rated amount of the time...not the entire 6 month period. Also, it appears that the OP's boyfriend offered to provide the services to the client for free at another gym, so that the current gym would not have to refund any money.

 

[perpetstudent]

He was paid by the gym to perform at a service at that gym. He works for the gym, not the customer.



I'm pretty sure this customer who paid for X sessions isn't going to be OK with not getting what they paid for. So either the gym would have to pay somebody else to do the training or refund the customer.

The gym already got their 40% cut of the sale when the client paid, just like my fiance got his 60%. And the client is NOT going to demand her money back from Gym A because she is completely fine with transferring the remainder of the sessions to Gym B. So Gym A is not losing any money on the current sale. The only way that they might lose money is in the future because this client has been working with my fiance for the past two years and has been very loyal to him. If she decides to continue with him and re-up for another six months later down the road at Gym B, then yeah, Gym A would be missing out on that sale. But I would think it's up to the client where she decides to seek services - Gym A cannot control that.

This is the part that I am unsure about. My fiance was paid by Gym A as self-contractor, not as an employee. Nowhere in the gym's policy does it specify that sessions sold are required to take place at the gym. I know in the past my fiance has had to travel to some of his client's homes to do some of their sessions because of transportation issues where they couldn't make it to the gym, and the gym was fine with that. Why is this any different?

 

[swalsh411]

But I would think it's up to the client where she decides to seek services - Gym A cannot control that.

I would agree with you in general that a person can choose any trainer they want and train anywhere they want, but in this case the client paid the gym for the services of one of their employees. (or independent contractors). It's not like the client responded to an independent ad that was up on Craiglist. You involved the gym as the intermediary and they have rights to seek contract performance or recovery of what they paid (pro-rated) if it’s not done.

He's contracted with the gym, not the customer. The gym could agree to this arrangement but doesn't have to. I'm not saying this proposed resolution doesn't make sense for all involved, but you can't force this on the gym. They paid him for a service and if he doesn't perform, they can absolutely sue him for the portion of the service he didn't do.

Are Gym A and Gym B somehow connected? Wouldn't there be a fee due to Gym B for use of their facility?

Why can't your finance just agree to complete the sessions? It would be what, a couple of hours over the next 3 months? Surely he's not working ALL the time at his new job.

 

[perpetstudent]

He's contracted with the gym, not the customer. The gym could agree to this arrangement but doesn't have to. I'm not saying this proposed resolution doesn't make sense for all involved, but you can't force this on the gym. They paid him for a service and if he doesn't perform, they can absolutely sue him for the portion of the service he didn't do.

Are Gym A and Gym B somehow connected? Wouldn't there be a fee due to Gym B for use of their facility?

Why can't your finance just agree to complete the sessions? It would be what, a couple of hours over the next 3 months? Surely he's not working ALL the time at his new job.

I do see what you're saying, and to an extent I agree. But what gets me and makes me think that things may be otherwise is that Gym A never specified where sessions must be conducted. There is no trainer handbook or contract or anything that states that any sessions from sales sold in the gym must be conducted in that particular facility. Like I said, my fiance has done sessions with clients in their homes, outside tracks, parks, etc and it was never a problem. It's also suspicious to me that their "policy" on how to handle situations like this has remarkably changed all of a sudden.

To be honest, I'm very suspicious of Gym A in general. They have some shady business practices going on, and they have been mistreating my fiance for a long time, hence why he began to look for new employment to begin with. My fiance is foreign and pretty new to how some things work in America, so I have seen them try to take advantage of that before. It's actually really disheartening. You know, I'm thisclose to having my PhD, I'm not stupid, and I see what they are doing. I just want to make sure that they're not trying to intimidate or bully my fiance into doing something that's not in his best interests.

And to answer your questions.. no, Gym A and B are not connected to each other at all. Gym B has been really impressed with my fiance and really wants him to work there, so they have been very flexible and willing to work with him during the transition between jobs. They gave him permission to use their facilities to complete any remaining sessions he may have. As for why he wouldn't just finish up the three months left... well, like I said, Gym B has been willing to be flexible with what he works during this month of transition because they're mindful of his prior commitments to his clients. But after this month, they are going to be expecting him to be working there at peak hours, which are the only times that this client can schedule her sessions. Plus, the manager has created such a toxic environment for him there that at this point he just really wants to be out and done.

My fiance talked to his client about all this today, and she told him that if he paid the money back to Gym A, she would then go to the gym and try to get the money that she paid refunded to her. She would then take that money and use it towards buying sessions with him at Gym B. This is an option, but it's not really ideal because: 1) it would still result in a substantial loss of money because then Gym B would be taking their cut of the sale, as well, and 2) it's reliant on the manager of Gym A being willing to refund her money. He has been known to give people a ridiculously hard time and to outright deny refunds. So I'm a little hesitant to rely on that.