Ask Me Help Desk - Wording about repayment of Sign-on bonus

Hello,

I started working for a company on June 25th 2012. Before that, I received a sign on bonus check in mail for $10,350 (supposed to be $15k, so this is after taxes) on or around 20th March 2012 (so before my start date).

Now, my offer letter states:

'The Supplemental Bonus is being paid to encourage you to accept our offer and to remain employed with the Company for at least a year. The Supplemental Bonus payment must be repaid to the Company within thirty (30) days should you voluntarily terminate your employment within twelve (12) months of your receipt of payment, or in the event you are terminated for "Cause" '

Furthermore, the offer letter also states that: '3. Notwithstanding the foregoing, in the event Employee voluntarily terminates his / her employment with the Company or is terminated for Cause before the twelve month anniversary of his / her receipt of the Supplemental Payment and / or Signing Bonus, then in that event Employee shall repay to the Company the entire amount of the Supplemental Payment and / or Signing Bonus within thirty (30) days of the date of termination'

Thys, my question is, will I have to repay even if I leave by end of April this year (it is more than a year after the supplemental bonus was paid but less than a year from my start-date)? Or will I be okay as I am clearly abiding by what the offer letter says?

Kindly look into this. I am looking to start with a different company as soon as I can as the job profile and prospects are much better there and the job satisfaction too.

Thank you!

You will have to pay it back... they would use your start date as the date the clock starts ticking. See if you can't delay a start date at the new company until after that anniversary.

Reason for this is its contingent on your actually starting to work for them... thus day one.. is the beginning of the one year period.

Quote:

Originally Posted by smoothy

You will have to pay it back....they would use your start date as the date the clock starts ticking. See if you can't delay a start date at the new company until after that anniversary.

Reason for this is its contingent on your actually starting to work for them...thus day one..is the beginning of the one year period.

Hey smoothy,

Thanks for your reply! Yes it makes sense.. but I am struggling to understand why did they specifically mention twice in the offer letter that *within 1 year of receipt of payment/supplemental bonus* ? Does that change anything? And as I mentioned, they paid the bonus prior to my start date.

Thanks!

Quote:

Originally Posted by sssane

Hey smoothy,

Thanks for your reply! Yes it makes sense.. but I am struggling to understand why did they specifically mention twice in the offer letter that *within 1 year of receipt of payment/supplemental bonus* ? Does that change anything? And as I mentioned, they paid the bonus prior to my start date.

Thanks!

Look at it from this perspective... do you have the money to pay a lawyer to fight with their lawyer over it? Like most of us... I'm going to guess not. It's a lose - lose situation.

Paying it before doesn't really matter... because if you cashed the check and didn't actually start they would have been after you in a heartbeat.

The date they cut it really doesn't matter since everything is contingent upon your actual employment. Because of that your start date is when the clock starts running.

Had you not cashed the check for 4 months... that would not have changed anything either.

Almost everything employment related is based on your dates of service (first day and last day)... not date of offer or anything else...

The second clause that you included in your post is number 3.
Something is not flowing correctly here.
What does "not withstanding the foregoing" refer to, the first clause you cited or to something else? Just to the first clause you cited, or to a 1. and a 2?
Maybe I am misreading something, but it appears to me that the two clauses say the same thing, just worded a little differently. And I can't see any reason for the '3. Clause' unless there is a 1 or 2 that makes it necessary.
Smoothy may be correct that these types of bonuses start on the actual date of starting work, but that is not what the clauses that you included-say.

Quote:

Originally Posted by smearcase

The second clause that you included in your post is number 3.
Something is not flowing correctly here.
What does "not withstanding the foregoing" refer to, the first clause you cited or to something else? Just to the first clause you cited, or to a 1. and a 2?
Maybe I am misreading something, but it appears to me that the two clauses say the same thing, just worded a little differently. And I can't see any reason for the '3. clause' unless there is a 1 or 2 that makes it necessary.
Smoothy may be correct that these types of bonuses start on the actual date of starting work, but that is not what the clauses that you included-say.

Hi smearcase,

Apologies for not giving the full context. Below is the reimbursement agreement for the supplemental bonus/sign-on bonus. The point 3. was from this agreement and the initial quote was from the first page of the offer letter, which just mentioned that.

"
REIMBURSEMENT AGREEMENT
For Supplemental Payments and / or Signing Bonuses
The undersigned, <company> its affiliates, subsidiaries, predecessors and successors (collectively, the "Company") and the ("Employee"), hereby agree as follows:

1. In consideration of Employee's agreement to become an employee of the Company, and to induce Employee to remain employed in good standing, the Company does hereby agree to pay to Employee the Supplemental Payment and / or Signing Bonus as described and authorized in the Company's offer letter dated May 11, 2012, a copy of which is attached hereto, and incorporated herein by reference, subject to the further terms and conditions contained in this Agreement.

2. To the extent that the offer letter dated May 11, 2012, specifies more than a single, lump sum payment and additional payments have not yet been delivered / tendered to Employee, in the event of Employee's termination of employment with the Company regardless of "Cause", all obligations of the Company under the terms of this Agreement shall cease as of the Employee's date of termination, which termination date shall not be extended by virtue of payments for unused vacation time or other reasons, and the Company shall have no further obligations to Employee hereunder.

3. Notwithstanding the foregoing, in the event Employee voluntarily terminates his / her
employment with the Company or is terminated for Cause before the twelve month
anniversary of his / her receipt of the Supplemental Payment and / or Signing Bonus, then in that event Employee shall repay to the Company the entire amount of the Supplemental Payment and / or Signing Bonus within thirty (30) days of the date of termination.

4. The Company's promise to pay, and payment of, the Supplemental Payment, and / or the Signing Bonus is specifically conditioned upon Employee's agreement to the terms set forth herein.

5. Nothing in this Agreement should be construed as a promise of employment for a
specified period of time. Employee remains employed at will and may terminate the
employment relationship at any time, with or without Cause or notice and the Company
reserves for itself an equal right.

6. This Agreement (including any documents specifically incorporated by reference) is the complete understanding of the Parties regarding the Supplemental Payment, and / or the Signing Bonus, and Employee's re−payment obligations. This Agreement supersedes any prior oral or written understanding regarding the Supplemental Payment and / or the Signing Bonus and any changes to these terms must be in writing and signed by these Parties.

BY ACCEPTING THE TERMS AND CONDITIONS OF THE SEPARATE OFFICIAL OFFER CONFIRMATION LETTER (EITHER BY SIGNING AND RETURNING THE OFFICIAL OFFER CONFIRMATION LETTER AS DIRECTED, OR BY INDICATING MY ACCEPTANCE OF THE TERMS AND CONDITIONS OF THE OFFICIAL OFFER CONFIRMATION LETTER THROUGH THE ON−BOARDING PORTAL), I SPECIFICALLY ACKNOWLEDGE THAT I HAVE READ, UNDERSTOOD AND AGREED TO THE TERMS AND CONDITIONS OF THIS DOCUMENT AS WELL.
I FURTHER ACKNOWLEDGE THAT I AM BOUND BY AND AGREE TO THE TERMS AND CONDITIONS SPECIFIED IN THIS DOCUMENT.
EXCEPT AS OTHERWISE SPECIFICALLY INDICATED, I UNDERSTAND AND ACKNOWLEDGE THAT NO SEPARATE SIGNATURE ON THIS DOCUMENT OR ELECTRONIC ACKNOWLEDGEMENT OF IS REQUIRED TO CONFIRM BY UNDERSTANDING THAT I AM BOUND BY AND AGREE TO THE TERMS
AND CONDITIONS SPECIFIED IN THIS DOCUMENT BECAUSE ITS TERMS AND CONDITIONS ARE INCORPORATED BY REFERENCE INTO THE OFFICIAL OFFER CONFIRMATION LETTER AS IF FULLY SET FORTH THERE.
"

Quote:

Originally Posted by smoothy

Look at it from this perspective...do you have the money to pay a lawyer to fight with their lawyer over it? Like most of us...I'm going to guess not. Its a lose - lose situation.

Paying it before doesn't really matter...because if you cashed the check and didn't actually start they would have been after you in a heartbeat.

The date they cut it really doesn't matter since everything is contingent upon your actual employment. Because of that your start date is when the clock starts running.

Had you not cashed the check for 4 months...that would not have changed anything either.

Almost everything employment related is based on your dates of service (first day and last day)...not date of offer or anything else....

Hey smoothy thanks! You make some excellent points here. Its hard not to agree with what you are saying. But, in response to smearcase's reply, I have provided the whole reimbursement agreement below.

Thanks!

[Now, my offer letter states:
'The Supplemental Bonus is being paid to encourage you to accept our offer and to remain employed with the Company for at least a year. The Supplemental Bonus payment must be repaid to the Company within thirty (30) days should you voluntarily terminate your employment within twelve (12) months of your receipt of payment, or in the event you are terminated for "Cause" ' ]
The foregoing (you said in your first post) is from the offer letter, and the offer letter says: "The Supplemental Bonus is being paid to encourage you to accept our offer and----- to remain employed------- with the Company for at least a year. "
The agreement indicates that the offer letter is incorporated as part of the agreement (and vice versa).
They have used some conflicting language in my opinion and the final interpretation would be hard to predict. Is the new job worth a gamble of how it would come out? Could you have to pay them back the full $ 15K, then try to get back the tax paid by them? And if they pursued it- lawyer fees as smoothy indicated. Also, if you try to use the date of receipt of the bonus, is that the date the money went into your bank account, or date of receipt of a letter. Good luck,

Hey smearcase,

Thank you for your reply! Yes, it is very confusing isn't it! Does it then look like indirectly they have said that I will have to repay if I terminate employment within 1 year of my start date itself?

Also, yes, I deposited the check in bank mid-april of year 2012, so yes, I was considering this as my 1 year anniversary of the receipt of payment.

With regards to the worthiness of the new job, it is certainly nowhere as huge company as this is (about 150 employees).

So in your opinion, I should stick it out with the current employeruntil June of this year is it? Oh and by the way, I am on a H-1B visa, sponsored by this current company, which I got approved last year. So not sure if that will play a role or not either!

Thanks again!

You are aware the H1-B is valid only through the sponsoring company... paperwork is going to have to change or it will be revoked. You can't simply job hop at will with that type VISA.

If you do nothing.. the VISA will be evoked when you employment at the other company sponsoring it ends. So... if you haven't already... you need to look into that aspect as well, ASAP.

They were very clear in stating their intent upfront in the offer letter (I missed that the first time I read your post) and their intent was that you be EMPLOYED by them for one year. They did a bad job of wording the clause about the bonus. If they demand repayment and sue you, you will have to go to court and prove that the clause about the bonus takes precedence over the statement of intent (as well as what you may have been told orally, assuming there was discussion prior to the offer letter). You may be able to get a free opinion from an attorney but I doubt that he/she will know for certain- how a judge would rule. When we had direct conflicts of this nature where I worked, we usually found a way to compromise with the other party.
I realize that you can't talk to your present employer but does the potential employer want you badly enough to take care of your problems (bonus repayment if it is demanded and visa situation).
I am not saying that you should do one or the other. Only you know your financial situation and now the added visa situation. I just know that I personally wouldn't make any moves until I knew solid answers to all the questions, especially-- can I afford to pay out $ 15K in a month or two (plus possibly attorney fees) and how will I be impacted by the visa matter.

Quote:

Originally Posted by smearcase

They were very clear in stating their intent upfront in the offer letter (I missed that the first time I read your post) and their intent was that you be EMPLOYED by them for one year. They did a bad job of wording the clause about the bonus. If they demand repayment and sue you, you will have to go to court and prove that the clause about the bonus takes precedence over the statement of intent (as well as what you may have been told orally, assuming there was discussion prior to the offer letter). You may be able to get a free opinion from an attorney but I doubt that he/she will know for certain- how a judge would rule. When we had direct conflicts of this nature where I worked, we usually found a way to compromise with the other party.
I realize that you can't talk to your present employer but does the potential employer want you badly enough to take care of your problems (bonus repayment if it is demanded and visa situation).
I am not saying that you should do one or the other. Only you know your financial situation and now the added visa situation. I just know that I personally wouldn't make any moves until I knew solid answers to all the questions, especially-- can I afford to pay out $ 15K in a month or two (plus possibly attorney fees) and how will I be impacted by the visa matter.

Thank you @smearcase and @smoothy!

Yes, I am aware that my H1b has to be transferred and the new employer is willing to pay for and transfer it to his name.

As with the lawyer costs and repayment.. That's whenre the whole issue is.. So it kind of sounds like if the new company is going to sponsor those 15k dollars, its all fine.. Else, I should just try and make them wait until end of June so that even I can leave and join the new company with clear mind!

Thank you very much both!