If I work for a Fortune 500 company that relocated me to a new position in another state, does it putting me on furlough exempt me from repayment of my relocation expenses?

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If I work for a Fortune 500 company that relocated me to a new position in another state, does it putting me on furlough exempt me from repayment of my relocation expenses?

The company required that I sign a 2 year contract because of the relocation costs that they covered. Recently, the company put me on a week furlough; this included several hundred employees. The contract between the company and I didn’t really state anything detailed, just that if I left before the 2 year contract is up, then I’d be responsible for total repayment. Can it expect me not to look for other work?

Asked on January 6, 2016 under Employment Labor Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

There is no hard and fast answer, because it depends on how long you are furloughed and the expectation of reinstatement.
A week furlough--would definitely NOT let you out of the contract. One week out of at least 2 years employment, especially when the company also paid relocation for you, would not be seen as "material," or important-enough, disruption of employment or breach as to justify you in treating your obligations (the repayment obligation) terminated.
A three-month+ furlough--in my experience a court would consider that ample justification to treat the relocation obligation as terminated; it is unreasonable to expect someone to be unemployed for 1/8 or more of the contract and to have no income coming for a quarter of the month, and that would be a material breach.
Between those two extremes, courts would (if the company tried to enforce the agreement against you) use their judgment as to whether, under the circumstances, the breach were sufficiently material or not.


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