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I specifically refer to this example:

You will receive a $***** relocation bonus. In the event that you leave within 12 months of your hire date, you will be responsible for reimbursing the company for the entire bonus.

Let's say the employee took the money, moved and quit right after he moved. Then he's obligated to pay the employer back. This makes sense.

However say if he came worked for 9 or 10 months then was fired by the employer, based off of the language above is the employee obligated to pay?. Morally it looks like the employee was screwed over as he moved over for no reason and now has to pay for the move.

That clause doesn't look like it should apply to employees getting fired. Should it? How are such matters interpreted by the court?

This clause can allow employers to easily screw over employees after a week right? The employee moves, the employer decides to outsource his job to China then fires him within a week and then demands the relocation bonus back AFTER the person screwed himself over and moved. Who would sign such a contract like that? The intention of the clause is suppose to be there for protection of the company, but the technical language is being specifically interpreted to screw over the employee.

Anyway are there examples of cases similar to this?

The specific location of this is California.

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    You might want to specify a particular jurisdiction, if you care about one. (Though answers from others will be provided also)
    – Alan
    Commented Jan 31, 2023 at 6:49
  • Simpler, you might ask them what it means and put that in the contract. I had a contract including life insurance while I work for the company, I asked, and the life insurance was 24/7.
    – gnasher729
    Commented Jan 31, 2023 at 7:07
  • @gnasher729. Let's say this contract is already signed and the situation already occurred and the employer is currently demanding money based off of the contract. I'm looking for the outcome of the legal case, strategies for defense and interpretation of the word "leave" in this context.
    – Bernard Smith
    Commented Jan 31, 2023 at 7:14
  • Being fired for cause is very different than getting laid off because your job was outsourced. I would expect the contract would differentiate between these terms, and you probably should too...
    – Michael Hall
    Commented Feb 1, 2023 at 20:58

3 Answers 3

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Like most states in the US, there is in California no extra-contractual legal distinction between "for cause" and "for the heck of it" termination. It is possible that your contract has a specific term or tenure clause ("cannot be fired without cause after such-and-such period"), but in lieu of that, you can be fired at any time for any and no reason. The ordinary meaning of "leave a job" is that you quit, and the bonus is an incentive to you to stick with the job – it encourages you to make certain choices, like, not quitting. Since firing for cause (bad behavior of employee) is legally the same as firing to save money, the courts will not reward cynical misuse of the concept of retention bonus by allowing a company to fire you and claw back the bonus.

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  • Shouldn't the word "since" be "although"? Coming from a jurisdiction with stronger employee rights, it seems obvious that "you leave" does not include "we fired you without cause," but if it was legal to fire without cause, I wouldn't be so sure.
    – sjy
    Commented Feb 1, 2023 at 11:25
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"You leave" requires that you leave

That is, it requires your volition in the leaving. If you were dismissed or the company went bankrupt then that would cause your employment to end but you wouldn't have left your employment.

Notwithstanding, there is a general principle of contract law that a party to a contract is not permitted to take advantage of its own wrong. If they dismiss you for cause, or you resign then that's your breach and you would be required to pay it back. However, if they choose to dismiss you for other reasons, then that's their "wrong" and they can't take advantage of it.

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  • All the answers are consistent and make sense. But I don't understand the negative downvotes. Is there controversy in this area?
    – Bernard Smith
    Commented Feb 1, 2023 at 5:21
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    @BernardSmith in the words of Kent Brockman ”democracy simply doesn’t work”
    – Dale M ♦
    Commented Feb 1, 2023 at 9:42
  • I wonder what would happen if you are harrassed at work, you complain but nobody does anything about it, and you leave as a result. And there have been posts about someone's company demanding that they quit.
    – gnasher729
    Commented Feb 1, 2023 at 12:15
  • @gnasher729 "what would happen if you are harrassed at work, you complain but nobody does anything about it, and you leave as a result." That sounds in [employer's] constructive breach of contract, which forfeits employer's recovery of relocation bonus.
    – Iñaki Viggers
    Commented Feb 1, 2023 at 12:58
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You should have asked much earlier, but if you were laid off you can claim that this is not “leaving” and the contract is unclear and an unclear contract is held against whoever wrote it.

If you left voluntarily then you most likely lost. If there is a constructive dismissal you might say that you were forced to leave.

Comments: Kfk, are you seriously saying that “if you leave” unambiguously means “if you leave or get laid off”? Unambiguously? Most people will say it unambiguously does NOT mean that. And some will say that it is ambiguous, in which case a decision goes against the employer. If you say it might be unambiguous then it is ambiguous.

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    Contra proferentem usually applies to consumer contracts, EULAs etc. and other situations where contracts are offered on a "take it or leave it" basis. On the other hand, work contracts are routinely negotiated before signing (most notably the salary part, but other benefits / non-compete clauses etc. too). Do you have any citation that says it applies to California employment contracts?
    – KFK
    Commented Jan 31, 2023 at 14:17
  • @KFK, I found an example here: lexology.com/library/… I think my case Contra Proferentem applies because the intent of the contract is truly ambiguous. Additionally no employee would reasonably sign a contract that allows an employer to take back wages after getting fired. I'm not an expert though. KFK, given this information, what do you think?
    – Bernard Smith
    Commented Jan 31, 2023 at 16:54
  • OP said that he didn’t look at this clause and therefore it was not negotiated.
    – gnasher729
    Commented Feb 1, 2023 at 9:19
  • I think "leave" is indeed ambiguous in the OP’s context, but I do not know whether that ambiguity would be necessarily resolved against the employer. (I did not downvote.) I imagine there is case law on how to apply contra proferentem to work contracts ("work contract says ambiguous thing X, it ends up in court" seems common enough), but I am not a California lawyer (nor am I an employment lawyer in my own country), so I genuinely do not know.
    – KFK
    Commented Feb 1, 2023 at 9:32
  • That being said, "I did not look at the clause before signing lol" is unlikely to be the right approach. Contra proferentem is not about how wrote the final language of the clause, it’s about whether both parties had the opportunity to propose changes and clarify unclear language. For instance, if the contract says X, Y and Z, and you asked and obtained changes to X and Y before signing, one could infer that you were OK with Z. On the other hand, if Z was never discussed before it was added to the final draft, it might count against the employer.
    – KFK
    Commented Feb 1, 2023 at 9:39

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