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Repayment of sign-on bonus after breach of contract by employer

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  • Repayment of sign-on bonus after breach of contract by employer


    I was recruited to a rural location in part with a very high sign on "bonus" (>100k). This was structured as a loan, which was to be forgiven gradually over a period of 5 years. The other way in which I was recruited is that I was promised a 4 day work week. I showed up and immediately they wanted me to work 5 days because they did not have someone to cover my day off (despite having plenty of time). So this was a bait and switch. I made a stink and eventually they agreed to give me 52 extra days of PTO as they could arrange for locums for a week or two at a time but for a single day. However, this was never done as an addendum to the contract, as the contract requires. After about a year of this nonsense, I realized that (1) It's extremely difficult to take off an extra 52 days a year, (2) I end up doing more work this way getting everything wrapped up to leave and straightened out when I return, and (3) it was impossible to make a production bonus because the locums got all the wRVU credit despite me doing all of the work (typically there would be no work done on my day off as I can get everything done in 4 days).

    So, I quit and told them I was resigning for cause due to breach of contract. They replied that they accepted my resignation but declined to see how it was for cause as I verbally agreed to their alternative arrangement (which is not what I signed up for). I replied back with the contract language saying that all contract modifications must be in writing as a signed addendum ("no verbal agreements"), and they never replied, but interestingly they suddenly produced a locums who could be there on the 5th day and forced me to only work 4 days a week after submitting my resignation (worried they may have some legal liability now?)

    Anyway, I am now no longer employed and they are trying to send me a "letter," which is undoubtedly a demand for payment for the remainder of the sign-on loan that was not forgiven (probably about $90k).

    What will happen if I refuse to pay it back? I am assuming they will eventually serve me with court papers. Do I have an argument for damages in that they used a bad-faith contract and a large signing bonus that was DOA to recruit me to a rural area? I could make an argument that their alternative arrangement I was basically tricked into cost me production bonus, but the wRVU numbers that went to the locums instead aren't quite high enough to justify $90k. Is this something I should try and fight, and if so how? I am furious at the way they treated me and lied to me during my time there. Really nasty organization and I would love to fight them on principle alone.

    In other words, they recruited me under false pretenses, failed to fully honor the contract immediately, which resulted in my resignation for cause. How do I quantify damages for their breach of contract? I can prove breach of contract, but so what does that mean if I can't collect any damages from them for the breach? My penalty for breaking the contract early with my 90 day notice, which I did give even though they were in breach, was having to pay back the unforgiven portion of the sign on loan, which I did not anticipate having to do as I did not anticipate their breach of contract. So I would consider that to be my "damages" I would be entitled to collect.


  • #2
    A lawyer would be of help to you.


    • #3
      While this forum has a lot of good advice on a variety of topics, you will likely need legal representation from an attorney in the state with expertise in health care employment issues. The good thing is your former employer has apparently breached the contract and you have the cash from the loan giving you a stronger negotiating position (better than trying to get them pay for work done but not yet compensated). They can sue you, threaten to sue you, or negotiate an acceptable outcome. Get a good attorney and let them obtain the best outcome for you.


      • #4
        Originally posted by CordMcNally View Post
        A lawyer would be of help to you.
        ...before you actually left the position.


        • #5
          You said ‘this was never addended in the contract, as the contract requires’. Why didn’t you push for this to be in writing?


          • #6
            You could both lawyer up and let the lawyers make money.

            Or settle somewhere in the middle.

            Damages need to be quantifiable. Hurt feelings don't count. If you have moving and/or relocation expenses to and from the area that would count IMO.


            • #7
              Who's got the money right now? That's probably going to affect your strategy.


              • #8
                How long did you actually work there, and did they pay you otherwise per your contract?


                • #9
                  I agree they screwed you.

                  However, likely the language in the contract regarding the signing bonus is that if you leave for any reason you will have to pay it back. I assume 20K forgiven yearly over the course of 5 years so if you worked a year, likely they want 80K back. Also, since it sounds like you got the money already and paid taxes on it, you can't get that back either if you return it.

                  Big organizations have their own employed lawyers, so doesn't cost them extra to sue someone.


                  • #10
                    Does the sign on bonus language or any section if your agreement say how repayment is handled? Specifically, does it say that you don’t owe them the money if they breach the contract? Is there a curing period whereby you have to notify them in writing and they have X days to fix the matter? I agree with getting a lawyer. Better late than never.


                    • #11
                      Lawyer up. My guess is they have a claim on the bonus money, that it is if you leave for any reason. On the other hand you have a claim against them for breach of contract which you could argue cost you money both directly (relocation) and indirectly (lost time in establishing a practice or partnership). Sounds like a settlement.