Reimbursement of Relocation Assitance and Lease Breakage to Employer

[boomjosh2007]

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

Hi,

My past employer wants me to reimburse the pro-rated part of relocation assistance and lease breakage provided to me when I joined the company. Following are details of the case:

I was working with employer A in X city, CA. I went through the interview selection process for employer B and got selected for work at location Y, CA. I negotiated with the employer B for relocation assistance from city X to Y and lease breakage for my apt in city X. Employer detailed the salary, relocation assistance and lease breakage details as follows on my offer letter (actual excerpts, figures not stated):

• An annual gross salary of $xxxxx (US Dollars xxxxxx)
• Relocation Assistance of up to $xxx (US Dollar xxx) in accordance to Company's relocation policy.
• Lease breakage cost of up to $xxx (US Dollar xxx) as per company's policy

The employment agreement states the following with respect to relocation (actual excerpts):

3.1 If employee terminates his/her employment with employer prior to completing twelve (12) months of service, Employee agrees to reimburse Employer a pro-rata portion for Employer's actual costs of any relocation expenses advanced by Employer to Employee for the last relocation during that period. Employee's relocation obligation shall be reduced by one-twelfth (1/12) for each month that employee remained in service following the last relocation during the twelve (12) month period.

3.2 By using this Employment Agreement, Employee expressly agrees to these reimbursement obligations and expressly authorizes Employer to deduct the maximum amounts allowed by law from Employee's final paycheck to be credited against Employees obligations to employer under section 3.1

I worked with the employer for 6 months, having said that what I understand as per the employment agreement is that I am liable for pro rated reimbursement of relocation assistance i.e. $1500/2 = $750.

But the employer has sent me a letter asking for me to reimburse $2750. When I checked with the employer how come I owe so much he told me that I am even liable for pro-rated reimbursement of lease breakage amount also.

I have already paid $1421 and employer is demanding the remaining $1329. At this point I sincerely feel that I have overpaid as to what I owe (as per my understanding). The reason I paid over and above what I owe ($750) was due to their constant threats of legal actions.

I am trying to contend them on this and asked them to show me that part of the agreement which states that I am liable for lease breakage or where it is stated that lease breakage is part of relocation assistance and they are not answering this question straight. Also they are asking my current address though my old address is forwarded to my new address.

Can any gurus on this forum please advice me what should I do..?? Do I really owe them the amount they claim...?? What does the law says in this respect.

Regards
BoomJosh

 

[ecmst12]

"Employers actual cost of any and all relocation expenses" seems pretty clear to me. But you have to show the entire document to a lawyer in your area to find out for sure.

 

[boomjosh2007]

Do you mean to say that I am liable for lease breakage? Please clarify.

"Employers actual cost of any and all relocation expenses" seems pretty clear to me. But you have to show the entire document to a lawyer in your area to find out for sure.

 

[ecmst12]

I think so, yes. That was part of the entire cost paid by the company for your relocation.

 

[boomjosh2007]

Thanks for taking time to read my case and responding back.
What I am trying to argue with them here is that is there any mention of lease breakage in relocation costs, it cannot be implied that lease breakage is a part of lease breakage.?
Though once you move from one place to another place when already with the employer, employer makes you sign another agreement which states lease breakage clause but not the employment agreement which I signed while joining the company. I think I will wait for some more comments and then contact a lawyer to clarify this.

I think so, yes. That was part of the entire cost paid by the company for your relocation.

 

[jsmith416]

It's pretty clear to me that them paying for your lease breaking penalty is a relocation expense, although the policy should be a little clearer on that point. What kind of expense do you think it is other than one they paid to relocate you?

Assuming they have deducted as much as possible out of your final check, they would have to sue you to get the rest. Whether or not they think it's worth it is up to them. They may just be blowing smoke.

 

[boomjosh2007]

Thanks for the response.
In fact the lease breakage was negotiated in lieu of no increase in salary but I know that negotiations are not made on paper. The company I am dealing with normally pays lease breakage only when a individual is already a employee and not for those who join new.
Nothing was deducted of my final pay check nor did they deduct anything out of my overtime pay checks which came at much later time after my final paycheck. They realized this much later and as soon as they demanded I paid the pro-rated amount ($800+) and then again paid ($600).

Assuming that the relocation expenses implies lease breakage if any, what are the odds that the company might sue me for $1200...?

It's pretty clear to me that them paying for your lease breaking penalty is a relocation expense, although the policy should be a little clearer on that point. What kind of expense do you think it is other than one they paid to relocate you?

Assuming they have deducted as much as possible out of your final check, they would have to sue you to get the rest. Whether or not they think it's worth it is up to them. They may just be blowing smoke.