Tips on Dealing with Repaying to Employer for Relocation or Sign-Up Bonus

You moved to San Francisco (or any other city in California) for what was supposed to be an exciting job opportunity. As part of the hiring process, the employer required that you sign an agreement in which you agree to partially or fully repay the relocation package that they provided you in order to cover your expenses or sign up bonus if you don't work for them for at least a year or two years (or any other amount provided in the agreement). Shortly after you start working for the new employer you become really disappointed in the new position either because the nature of your work is not what was promised or because of the unpleasant work environment (hours much longer than expected, office politics, etc). You decide to quit that job way before the period that you expected to work in order to not have to pay back the relocation expenses / relocation bonus expires. The employer then sends you a letter that they expect you to pay a certain amount back. How should you handle this and is there a way to avoid repaying? Every situation and every employer is different, but from our experience there are two ways to handle it: 

• The first option is to ignore the obligation and hope that the company will eventually give up. This really depends on how big the company is. Some companies don't bother to chase their former employees while others, larger companies, have departments and lawyers dedicated to suing former employees for those kinds of failures to repay -  in part because they can afford it and in part because they want to show to all employees that they are serious about their business. The best way to find out whether ignoring the debt is a good idea is to contact any other employees who quit shortly after they started working for the employer and see whether the employer bothered to go after them. Personally, I am not a big fan of this options because of the unnecessary stress it creates and because of the damage to the credit history this kind of bad debt is likely to cause. 
• A second and a far better option is to negotiate a reduction or a waiver of repayment obligation with someone who has the authority to give you a break on the amount to be repaid. You may consider negotiating directly with one of the higher ranked manager or you may consider having an attorney negotiating on your behalf. Depending on the reasons for your early resignation, different negotiations tactics should be used. For instance, if you have been sexually or racially harassed at work or if you were subjected to some other violations, you may take a more aggressive stance in negotiations and use your potential ability to file a claim as a leverage. On the other hand, if no such violations took place, it's best to take a "softer" approach where you would try to evoke some kind of understanding from the decision maker as to why you resigned and how you were hurt by the situation. 

I believe that you should always start with the second option as it simply can't hurt your situation. The absolute worst case scenario is that the employer remains firm about their repayment expectations, while the best case scenario - they significantly reduce your debt as a sign of good will or waive it altogether. I have seen how some of the largest companies waive or significantly reduce large sign-up bonuses ($50k), especially in cases where the employee maintained a good relationship with the management regardless of the issues that lead him to resign, and where he approached the negotiations in a way that didn't rub the management the wrong way (i.e. without telling the management how bad the company is, finger pointing, etc.). 

---