FSBO Midwest

FSBO Midwest

Relocation expenses are sometimes paid by employers. If they are, does a departing employee (that is, one who is quitting or resigning) have to repay them? The answer is, it depends on whether there was a written employment contract or relocation agreement requiring their repayment and, if so, what the contract or agreement says.

If there was no contractual agreement to repay, you would not have to reimburse the employer for the relocation costs. Only if you contractually agreed to repay these expenses would you be required to (This is a very slight oversimplification: if it can be shown that the employee never intended to work for the employer but only took the job and/or transfer as the way to get them to pay for a move, then the employee may have committed fraud and may be liable to repay, even without a written agreement. But this is a very rare circumstance, and would require compelling evidence, such as employee quitting almost right away after the move was made.)

If there was a contract requiring reimbursement of relocation expense, such an agreement is valid and enforceable. They have been repeatedly upheld by courts. Like any other contract, it is governed by its plain terms; so, if an employee agreed to repay if he or she left employment before, say, one year, then if the employee does leave employment before one year, he or she will have to repay. If he or she gave notice at one year and one week, he or she would not. Whatever the contract says, goes.

Some people believe that if they have a good reason for quitting—a medical issue, a family emergency, quality of life, a job that turned out other than what they thought or were told it would be, work stress (even stress to the point of causing health issues)—then they can resign early without repaying. However, that is not the case.

First, under contract law, you can only terminate or get out of an agreement for fraud or if the other side breaches or violates the agreement in some material, or important, way. (Again, a slight oversimplification, but this will cover 99%+ of situations.) You cannot use your own concerns or issues to get out of an agreement since if you could, no contract would ever be binding. Anyone could get out of a contract at will by citing whatever personal, health, financial, family, etc. reasons exist that make the contract a bad idea for them. Since allowing someone to escape a contract due to their own issues or problems would make contracts unenforceable, the law does not allow this. Your own issues are your issues or concerns, not the other party’s (i.e., not your employer’s) and will not let you out of your repayment obligations.

Second, under “employment at will”—which is the law of the land in regards to employment—there is no right to a job. Your employer does not have to employ you or make your job a reasonable or worthwhile one. Rather, they can treat you however they like, and the job can be excessively stressful and destructive of your quality of life, and that is perfectly legal. Since it is legal, it is not a basis or ground to get out of the relocation agreement.

Therefore, the stated reasons—work stress and quality of life—have no bearing on the repayment obligation(s). If you have a relocation expenses repayment agreement, all you can do is stick it out until you can safely resign or quit.

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