Is the restriction in labor agreement between the old employee and me still valid?

hi ,
I signed a offer letter half year ago, which indicated that I need to pay back the relocation benefit package(around 25K) if I left company within one year since onboard. but now the busines unit I am working for will be sold to another company. My question is that if the restrictions in the agreement between the old employee and me is still valid? that is , Do I need to pay back the benefit package if I resigned at this time?

1 answer  |  asked Apr 6, 2012 2:45 PM [EST]  |  applies to California

Answers (1)

Marilynn Mika Spencer
No one can answer your question without looking at the exact language of the provision in the offer letter, as well as the entire agreement. Given the amount of money involved, it makes sense to spend $1,000 or so and find out your obligations. It's likely the offer letter was not written with this situation in mind, in which case legal principles of contract construction will apply, as well as case law. Also, you may have information that will show the employer included that provision in bad faith, perhaps knowing the possibility the business will be sold. If so, there may be a way around the contract provision, and you may have a claim for detrimental reliance/promissory estoppel as well.

Promissory estoppel allows a court to enforce a promise in the interest of justice if all of the following elements are present:

-- one party makes a gratuitous promise to another (that is, a promise it was not required to make); AND

-- a second party changes its position, circumstances or actions in reliance on that promise; AND

-- that reliance was reasonable; AND

-- the second party was harmed due to its changed position, circumstances or actions.

Note this in this case, the court is enforcing a promise, not enforcing a contract. This is because one element of a contract is that all parties give up or offer to the other something the party is not already required to provide. In the promissory estoppel situation, the promise was gratuitous, so it did not form the basis of a contract.

Employment law is complicated and fact specific. You may wish to speak with an experienced plaintiffs employment attorney. To find a plaintiffs employment attorney in California, please go to the web site of the California Employment Lawyers Association (CELA). CELA is the largest and most influential bar association in the state for attorneys who represent working people. The web site is, and you can search for attorneys by location and practice area.

I hope you can resolve your situation and wish you the best.

posted by Marilynn Mika Spencer  |  Apr 6, 2012 6:42 PM [EST]

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