“Can a relocation repayment obligation last forever, if the words suggest that?”

Question: Hi Alan, I’ve been a long-time reader of your blog, and even used a lot of your advice when recently accepting a job that took me from the U.S. to Toronto. Now that I’m here, the job seems to be going well, but I’ve noticed something odd in my relocation agreement.

The company is paying for my relocation from the U.S. which includes legal services for immigration and tax advice. I knew that I’d have to re-pay the relocation if I resigned within two years, but I’ve just read a line in my employment agreement that says that it’s “two years from the date of the last relocation assistance provided.”

Does this mean that every time the immigration lawyers file a form for me and bill the company $100, that resets the two-year clock? The tax assistance alone will take me well into my second year with the company, and immigration can take a few years. Can I essentially be obligated for the relocation costs indefinitely? Thanks in advance, and please keep the great blog posts coming!

Toronto, Ontario, Canada

Answer: Dear Dan: So good to hear that you have been with us for a while now, and that you are finding our information, insights and inspiration helpful. Let’s see if we can help you out with this issue.

1. As I often say, “With any agreement, first read the words.” You are correct, and wise, to carefully review the words of the agreement you have signed. From its wording, I would agree with you that, at the least, you may have something of an issue, or problem, on your hands regarding the possibly-forever relocation repayment obligation.  

2. That said, there is a “rule of legal construction” that “If an interpretation of words leads to an illogical result, that interpretation is viewed as likely incorrect.” Let us think about the implications of the wording of your agreement: (1) Your relocation requires the continued use of immigration and tax assistance. (2) For this reason, your supposedly “two-year” repayment obligation is really “forever.” (3) Said a bit differently, your repayment obligation is absolute, unconditional and “not two-years.” (4) How can something be “two year” and “not two year” at the same time? (5) According to simple logic, it cannot.  

3. The law everywhere is based in common sense; it is much more common-sensible that your use of “continued immigration and tax assistance” were not meant to be included in the concept of repayable “relocation assistance.” While immigration and tax assistance are part of your employer’s “relocation” assistance package, it seems much more likely that when “relocation” was used in this sentence, it referred to “relocation” in the narrower sense of the word, that is, limited to such things as flights to Toronto to find housing, moving your personal goods, and required deposits on utilities such as electric.   

4. To accept any other result would require either a strained and non-sensible interpretation, or, worse: that you were intentionally deceived or defrauded. As an attorney who drafts and reads very carefully, I expect and hope I would have noticed that unusual wording in your relocation package. If I did, I would have said to myself, “Ooh – watch out: this was written by either a sloppy draftsperson or a sneaky lawyer.” I think it was Napolean Bonaparte who said, “Whenever the choice is between deceit and incompetence, it’s almost always incompetence.” If it was incompetence, then it is a mutual mistake, and should be easily fixed. But, if this was intended to trick you, that, too, would not likely be countenanced by any court if it ever got that far.

5. As I often suggest, why don’t you take this up with Human Resources, in a respectful email that lays out the analysis above. You might send an email to your HR representative mentioning what you mentioned to me: you just noticed this strange – and illogical – phrase in your repayment agreement, and you’d like to make sure that the illogical interpretation is not the one HR will take if and when you ever leave the company. Mention that you would like to “put to rest” any and all of these concerns, so that you can focus your thoughts and energies on being the best employee possible, not worrying that someone might have made a costly error. This path is usually successful; even if it is not, it is the best first path to take.

6. If that first suggested path does not lead to resolution, take the same approach with the head of your group or division, and even if necessary, your CEO, as businesspeople can usually tell HR people what to do. Dan, some group or division thought enough of you to both hire you and accept the considerable costs on its P&L of your relocation. It’s unlikely they now want to lose you, or de-motivate you. Be frank, be respectful, but be assertive, too. No one likes being treated illogically or, worse, being duped. I may be wrong, but I have some real confidence that the first or second paths outlined here are likely to get you the result and resolution you seek. At the same time, be careful not to create the impression that you are being adversarial or threatening, which is not your true motivation.

Dan, I sure hope this helps. If it does, great. If it doesn’t, please write again, and we’ll try to think even harder for you.

Thanks, again, for writing in, and too, for your kind compliments. Hope you’ll spread the word!

Al Sklover

If you agreed to repay your former employer (a) tuition reimbursement, (b) relocation expenses, (c) a sign-on bonus, or even (d) a short-term loan, you may be able to have that obligation waived and forgiven. To obtain a copy of our Model Memo entitled “Model Letter for Repayment Obligation Forgiveness – with 18 Great Reasons,” just [click here.] “What to Say, and How to Say It.™” – Delivered by Email – Instantly!

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