Law Firm sues former Associate for educational expenses.
When employees elect to leave an employer, they often fail to consider whether they have obligations to their employer. Although I don’t know if that was the case in a matter involving an associate at the Perkins Coie law firm but according to a recent article (click here to read), Perkins Coie is suing one of its associates for approximately $36,000 in educational expenses paid by the firm. That employee left for a rival law firm. According to the article, Perkins advanced educational expenses that the employee could then work off over time. When the associate left, he had not worked off his expenses and Perkins must have decided its time to pay up. I haven’t seen anything other than the article linked above so I won’t address the merits of the claim or any potential defenses.
Why write about it? Well for a couple of reasons. Employees sometimes get the impression when they take a new job that they can leave without any obligations to their current employer. That is not always the case. Unfortunately, most employers offer to help with things like educational assistance but don’t think about what will happen if the employee decides to leave shortly after they have received the benefit. To be fair, the employee does not give thought to this either. Typically, these agreements are made between the employee and employer during what I refer to as the honeymoon period. It’s just human nature that we don’t want to think about what will happen if things sour. That’s a mistake. These things need to be discussed and memorialized (that’s a lawyer term for get it in writing). Please be a little more detailed than reciting, “Joe agrees to repay our company for educational expenses if he leaves.” Consider including the following:
1. How will it be repaid? In lump sum or over time? 2. Can the employee discharge all or a portion of the obligation by meeting performance goals and/or through length of service? 3. If a law suit becomes necessary will it be heard in court or in an arbitration proceeding? 4. In what jurisdiction will the dispute be heard? 5. Will the prevailing party be entitled to recoup their attorney’s fees and court costs?
Finally, if you are an employee and are concerned about having to repay your employer for a job benefit, raise that issue before you leave. By being transparent with your employer, more often than not, you will find that these issues can be worked out.