Can a recruitment company put a no break clause into a contract and charge the applicant $24,000 if contract is broken or terminated by them?

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Can a recruitment company put a no break clause into a contract and charge the applicant $24,000 if contract is broken or terminated by them?

My son is being recruited by a company that does a coding bootcamp and job

placement. They ask you to commit to 2 years. However, if you quit or are terminated by them for numerous reasons they want to charge the associate a fee of

$24,000. Is this legal and do you recommend signing a contract like this?

Asked on February 16, 2017 under Employment Labor Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Yes, it is legal: the law allows two parties, including an employer and an employee, to contract that one will pay the other a penalty or fee is something occurs, like early termination. Contracts like this--though not nearly as punitive or dangerous--have been upheld by the courts.
No, your son should NOT sign this. You write that if "you ...are terminated by them for numerous reasons they want to charge the associate a fee of $24,000." That means that through no fault of your son's own and not due to anything he chooses to do, he could be terminated for any of "numerous" reasons and owe the employer $24,000. That is extraordinarily dangerous for him; it makes it very likely he will have to pay $24k with no control or recourse over it.


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