[Hammer]

I’ll try and make this quick. I work for a small firm in my hometown. About 7 months ago I agreed to take a very large raise instead of pursing another opportunity. Stupidly, I signed an agreement that said I would pay back $7,500 to the firm if I left within the first 12 months of signing the agreement.

Fast forward to today and sure enough I have a mega offer from a fortune 500. I want the job. I live in a pretty small town, and opportunities like this one without having to relocate are almost unheard of. I’ll be able to travel both domestically and internationally, receive a 15% pay bump (already doing well for myself), and huge increase in 401k match, and undoubtedly better insurance premiums. Additionally, I don’t want to work for rinky dink clients anymore and I don’t want to work tax seasons. More importantly I’m going to grow personally and professionally and gain a true understanding of the global business environment. Needless to say, I want the job.

The separation is going to be very, very, very ugly. The partners at my firm think I’m “all in” want me to become partner someday and are not expecting this AT ALL. But, I’m fed up. In my 3 years with the firm I’ve seen 36! people either leave voluntarily or due to termination. That is once a month and I think that is insane. It’s not coincidence, it’s culture. We are so behind on our work, our clients are screaming at us to get there work done. We have a junior staff who, I’m not sure even went to college. Don’t get me wrong I have a lot of respect for the business the partners built, but, they are not fostering growth at all.

I don’t want to pay them $7,500. Within the agreement, there are things they did not hold up to on their end. For example, it reads “Upon passing the CPA exam your title will be senior accountant” I passed the CPA exam and I am not a senior accountant. “We will reimburse you for your cell phone policy” They do not pay for my cell phone. Do I have any recourse here? What would you guys do? Keep in mind the separation is going to be so ugly. We are already sooooooooo understaffed and behind on our work. Take me out of the equation and I don’t know what they are going to do.

Help please! Can’t stand the idea of losing this incredible opportunity or having to pay 5 partners $7,500 just because I don’t want to work here anymore.

FAR - 70, 81
AUD - 83
BEC - 77
REG - 70, 78

Licensed in Ohio.

Now what the hell do I do?

[Andyred04]

Take it as you want but here is an excerpt from my Gleim REG textbook for Contract Law:
b. A material breach is an unjustified failure to perform obligations arising from a contract, such that one party is deprived of what (s)he bargained for.
1) A material breach discharges the nonbreaching party from any obligation to perform under the contract and entitles that party to seek remedies.
c. A nonmaterial breach does not deprive the nonbreaching party of the benefit of the bargain and does not discharge that party. However, the nonbreaching party may sue for damages.
1) A breach generally is considered nonmaterial if the injured party receives substantially all of the benefits reasonably anticipated.

Like I said take it as you want, if you feel the breach by the firm is material, you are not required to perform. However, if you feel it is nonmaterial, you could still sue for damages. I would hire an attorney if you’re serious about this.

FAR: 80 (Gleim, Ninja Notes, Ninja MCQs)
REG: 87 (Gleim, Ninja Notes, Ninja MCQs)
BEC: 87 (Gleim, Ninja Notes, Ninja MCQs)
AUD: 8/27/16

PA Candidate

[Hammer]

I'm not trying to sue, I'm trying to not be sued…for not paying back the $7,500 that I agreed to because I plan on leaving before 12 months…

FAR - 70, 81
AUD - 83
BEC - 77
REG - 70, 78

Licensed in Ohio.

Now what the hell do I do?

[Anonymous]

I get it, nobody wants to pay that amount of money if they don't have to, but if you really want this other job and you signed the agreement saying you’d pay if this situation came up – why not make it easy on yourself and just pay the money? I guess at the end of the day, even if they end up being jerks about it, you can still walk away knowing you weren't the weasel and held up your end up the deal.

Other option, when I left my old job I actually had it put into my agreement with my new job that they would cover the costs of education that I would need to reimburse my old employer.

Don't stay at the current job because of $7,500 – sounds like you'll quickly recover that cost (if the new job won't help you cover it).

[Missy]

Talk to a labor law attorney you may even get a free consultation. I would not take any opinions here on legal matters, I'm sure everyone here means well but most of their legal/hr knowledge comes from “a friend of mine said” or “I read on google”.

Before you do consult though make sure you've got documentation to support all of the areas you feel the contract was already broken. That's not legal advice, thats just time and money advice.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Anonymous]

Like mla said, get an attorney that will give a free or low cost consultation. If the new job is so great, you should consider paying the fee and getting out hassle free or ultimately settle for less than the 7,500 because the reasons you mentioned. You think it's going to be ugly but most companies don't want the legal hassle of these situations. Usually it's the employee leaving or termed that brings up the biggest problems, not the other way around.

[Anonymous]

Yes, of course you should legal advice.

That said, I will give my opinion anyway. You don't want to take money out of your pocket. Very understandable, nobody does. You are rationalizing your argument by mentioning the title & the cell phone charges. Again, very understandable, we all do that kind of thinking. You don't like your job, your bosses, it would suck to give them money – yes it would. Looking at all of this, I still think you should pay them back. That is what you agreed to do.

[leglock]

If I were your brother, I would advise you stick to the agreement you signed. I would also advise that if you felt like they weren't holding to what they stated they would do, then you should have brought that up to them.

If they sue you, that will be in the public domain. Plus, there are fees associat4ed with a lawsuit even if you win.

[Nessie]

I have known a few who successfully sued employers and one of my family members is a labor lawyer, so let me give you something to think about….

But first, in my opinion, you should just pay back the money to avoid an issue. Maybe ask to pay back $7500 minus the cell bill?? The lack of title (senior accountant) has probably not caused “damages” that has any real monetary measurement. And, the cell phone is probably pretty minor, so maybe you could negotiate that part out if the sum.

One thing for sure, the only certainty when pursuing a legal matter is that the lawyers *will* be paid and you may not like the outcome.

Generally, you will have to pay for a consultation, otherwise lawyers would spend their days giving free advice. At least the good ones charge for an initial consultation and can ask for $10,000 retainer (would not take $5000 in my friend’s case) to pursue the case. If you live in a small town word of you hiring a successful lawyer could scare your employer, however, you really did breach the contract, so not sure it is worth pursuing regardless of whom you hire.

It could likely boil down to who has the better lawyer. Perhaps a great lawyer could find a flaw in your contract, but at the end of the day you will likely spend more than $7500 in legal fees and still have to pay back the $7500 you owe your company.

My prediction is that they will send a collection agency after you if you refuse to pay. So why not just cough up the cash and avoid all the headaches.

REG Aug 20/15: 88
AUD: Feb 29/16: 80
FAR: Jun 10/16: 80
BEC?

Becker self-study, Becker Final Review & NINJA MCQS

[Peterman25]

Is the $7,500 not prorated by the portion of the 12 months that you did stay?

Once you passed the exam did you point out that you passed and, per the contract, A, B, and C need to happen? Do you have email evidence where you asked for their portion of the contract to be upheld and it still didn't happen? Can't you reduce the $7,500 by what they owe you for your cell phone bills?

It just seems like the cell phone bills and the title change are immaterial….but what do I know…I'm no attorney and this would all be for a judge to decide. Both parties could easily spend a few thousand dollars for attorneys on this matter.

If this job is as good as you say then you should negotiate an exit amount (and payment schedule?), pay it, and move on. Just my opinion and 2 cents.

BEC 7/14 - PASS
FAR 10/14 - PASS
AUD 1/15 - PASS
REG 4/15 - PASS

AZ license - Official 8/20/2015

[Hammer]

Thanks for all the feedback, truly appreciated. I really, really don't want to be sued and have the legal system involved in this, so I'm going to try and avoid that at all costs.

My first plan of action is try and negotiate that $7,500 down. I haven't taken a lick of vacation and it's policy to pay that out. So, prorated for the year, that would be roughly $1,000. Also, I assume they would hold my last paycheck, net that would be around $2,000. I can live with $3,500 cash out of pocket and the surrendered paycheck. I understand I signed the agreement, I don't plan on reneging if that what it comes down to. I just want to make sure I can make it as easy on myself as possible, as, I have absolutely no clue how the partners are going to react. But they are businessmen and frankly they are all kind of assholes so I can see it going south quickly given the current state of the firm.

Needless to say, no-one would stay the remaining four months of the agreement and hope a similar opportunity came by in October? Given that the options are:

A) Small/local firm, unheard of by most people/employers. Familyish atmosphere, I'm well liked, good pay, lots of flexibility. But current workload/stress is a nightmare and no guarantee of actually making partner and being able to change anything.

B) Fortune 500 company known by everyone. Better pay, 401k, insurance. Great resume builder, seems like a great place to work. No tax season. Not really much to go off of other than my interview and subsequent phone conversations.

FAR - 70, 81
AUD - 83
BEC - 77
REG - 70, 78

Licensed in Ohio.

Now what the hell do I do?

[MaLoTu]

I think that if you can add up the approximate amount of salary you have not earned because you did not get promoted per the contract and the cell phone bills you have had to pay, that you can get pretty close to the $7500. If they did sue you would likely win a counter suit for equal the cost.

[Anonymous]

It sounds like the new job is the job you want and you said it yourself….”and opportunities like this one without having to relocate are almost unheard of.”

[PurpleK]

I am surprised no one has mentioned that how you act and how professional you are when you switch jobs, regardless of how ugly the other side is, will have an impact on your career.

Once you have worked in the accounting industry for an extended period of time, you will come to realize how small the accounting world really is, especially within the same industry or in the same geographical area. Having worked in a large west coast city for over 6 years, my accounting network is made up of managers, managing directors, partners at all the large accounting firms, regional firms, accounting departments at private firms, tech companies spanning the entire west coast as well as the greater New York metropolitan area. You will see the same people at networking events, at industry events, and everyone talks to each other.

Even if the firm does not handle it well when you leave, you should act professionally and with the highest of integrity. I see no problem with negotiating down the $7,500, but if the firm does not go for it, pay the entire amount and move on. Keeping an untarnished reputation is much more important. You never know who you may meet when switching jobs again, or if a lateral hire at your current job becomes your new boss. Do not get lawyers involved and good luck.

[Ran16]

First, congrats on the offer. If it was me I would take the new job opportunity it sounds like the benefits of the new position out weigh the possibility of having to pay back the $7,500. But like mentioned above I would approach the situation very professionally and talk to your boss face to face and explain that you had hoped to stay but you just can't pass up an opportunity like this. Mention that you've been there for 7 of the 12 months and feel that it should be prorated instead of all or nothing. But if they aren't willing to work with you just pay it (I know that will stink) and just move on. Good luck!

[Missy]

Also after looking at your posting history a very significant part of this situation that wasn't mentioned is that you did leave this firm briefly for greener pastures even moving yourself and your SO for another job then came back to this place at their request. Meaning, while many employers might look the other way and not pursue this contract they have a very good reason to do whatever they can to make your life hell if you walk away again 8 mos later. Traditional wisdom is that employers rarely enforce such agreements but I think in your case they will.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Author]

Replies