Discontinuation of services before end of job contract.
I am having a contract agreement of 2 years minimum with my employer which mentions that in the event I quit my job before 2 years I will have to pay a penalty of 3 Months Salary.
The Scenario now is
- I have completed 7 months of service.
- My job involves frequent relocation.
- I have my wife who is pregnant and with her current health condition I cannot move from one place to another.
I wish to QUIT this job. Can my employer enforce the agreement laws on me.
Answers (1)
A three month salary forfeiture may be an unenforcable penalty
Good question. The answer lies in contract law. First, the courts generally will not disturb the parties' bargain, even if it turns out to be a bad deal for one of the parties later on. Therefore, if your contract says that you have to pay back three months of salary, the burden is on you to prove that a court should not enforce that obligation.
Courts do not enforce certain types of promises if they violate public policy. A court will not, for example, enforce a promise to commit a crime. In your case, you may be able to argue that a three month penalty provision violates the public policy of allowing a spouse and parent the freedom to care for his wife and newborn child if, for example, you qualify for FMLA. Also, the courts do not like penalty provisions that bear no relationship to the cost that the employer will bear from the breach of the agreement. That is, if your employer can hire your replacement with short notice at little cost, the three month forfeiture will be a penalty, which courts do not like.
Finally, you can try to renegotiate your contract. Your employer cannot force you to keep working and will incur costs to try to collect three months of salary from you. Therefore, consider approaching your boss, explain why you feel you need to leave and ask if you can give three months of notice rather than three months of salary. If you run into resistance, then consider calling me at 330.665.5445 to schedule a consultation. There are other strategies that may be available.
Regards,
Neil Klingshirn.
posted by Neil Klingshirn | Mar 17, 2004 09:57 AM [EST]
Good question. The answer lies in contract law. First, the courts generally will not disturb the parties' bargain, even if it turns out to be a bad deal for one of the parties later on. Therefore, if your contract says that you have to pay back three months of salary, the burden is on you to prove that a court should not enforce that obligation.
Courts do not enforce certain types of promises if they violate public policy. A court will not, for example, enforce a promise to commit a crime. In your case, you may be able to argue that a three month penalty provision violates the public policy of allowing a spouse and parent the freedom to care for his wife and newborn child if, for example, you qualify for FMLA. Also, the courts do not like penalty provisions that bear no relationship to the cost that the employer will bear from the breach of the agreement. That is, if your employer can hire your replacement with short notice at little cost, the three month forfeiture will be a penalty, which courts do not like.
Finally, you can try to renegotiate your contract. Your employer cannot force you to keep working and will incur costs to try to collect three months of salary from you. Therefore, consider approaching your boss, explain why you feel you need to leave and ask if you can give three months of notice rather than three months of salary. If you run into resistance, then consider calling me at 330.665.5445 to schedule a consultation. There are other strategies that may be available.
Regards,
Neil Klingshirn.
posted by Neil Klingshirn | Mar 17, 2004 09:57 AM [EST]
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