What can I do about a Relocation Agreement that I signed with my current employer to move to another state?

I am a government contractor and last year I signed a Relocation Agreement with my current company to move out of state. At the time I was a new employee. The Agreement stipulates that if I leave or am terminated for cause within 12 months of receipt of the Relocation Reimbursement ($20K all said and done) that I will reimburse my company in the full amount. Now, my company recently lost the contract under which I was working. I have asked them to lay me off as my Relocation Agreement states that I understand if I am laid-off that I will have no obligation for repayment. Adding on to this, the winning contractor has offered me my same position and I am unable to jump unless my company lays me off.

Asked on June 24, 2014 under Employment Labor Law, Hawaii


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

An agreement like the one you signed is a contract: it  is enforceable as per its plain terms. Your employer is under no obligation to lay you off because it would be better for you (e.g. it would let you take the other position); therefore, unless the relocation agreement has some term or claus stating that it is void if the contract under which you were working is terminated, they would seem to be able to hold you to the agreement and require you to reimburse them if you leave voluntarily; and as stated, they are under no legal obligation whatsoever to lay you off--they can keep you on payroll even if the contract you worked on is over.

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