Repayment of sign-on bonus following an acquisition

[actuary]

The contract I signed for my current job included a standard sign-on bonus repayment clause - if I voluntarily left company X after working there for less than 1 year, I would have to repay a pro-rated amount of my sign-on bonus. Shortly after I started working there, company X was acquired by another company, and is now company Y. Does this give legal justification for not repaying the bonus?

 

[army judge]

The contract I signed for my current job included a standard sign-on bonus repayment clause - if I voluntarily left company X after working there for less than 1 year, I would have to repay a pro-rated amount of my sign-on bonus. Shortly after I started working there, company X was acquired by another company, and is now company Y. Does this give legal justification for not repaying the bonus?

No.
When company A acquired company X, it acquired all its assets and liabilities.
It also acquired and must honor its contracts.
It could choose to hold you to your end of that contract, should you leave before the year has passed.

 

[actuary]

Oh well, figured it was worth a shot!

Thanks for the response.

 

[army judge]

Oh well, figured it was worth a shot!

Thanks for the response.

Many times companies use that standard language in contracts.
But, they rarely go after people who breach the contract (if the amount is inconsequential).

I've seen folks walk away with $25,000 signing bonuses after four, five months.
In many states, they can't even withhold it from your last paycheck, without specific written authorization on your part.

 

[actuary]

Many times companies use that standard language in contracts.
But, they rarely go after people who breach the contract (if the amount is inconsequential).

I've seen folks walk away with $25,000 signing bonuses after four, five months.
In many states, they can't even withhold it from your last paycheck, without specific written authorization on your part.

Thanks, good to know - I'm hoping they don't hold me too it. I'd be on the hook for about $5K (got $10K about 6 months ago).

 

[cbg]

And I've seen companies sue for the unpaid pro-rated portion. No way to guarantee which way it would go.

 

[army judge]

Thanks, good to know - I'm hoping they don't hold me too it. I'd be on the hook for about $5K (got $10K about 6 months ago).

If you sneak quietly away, you may not be noticed.

It also pays to keep your mouth shut.

But, you also have to be careful about burning bridges.

I hope everything works out well for you.