PLEASE HELP- penalty for breaking contract??

[mcggrad07]

I started a job as a new grad about a year ago in an UC, signed a TWO year contract that states there is no room for re-negotiation of salary after 1 year, only after 2. I have an RVU bonus but mgt will not share production info with me. Needless to say, I am looking to leave ASAP. There is a clause in the contract saying if I leave before the 2 years, I have to pay a penalty.... anyone ever gotten around this/ is this enforceable? Any help appreciated.

[Guest ERCat]

Can I ask what the penalty is?

[mcggrad07]

8K

[cinntsp]

I doubt this is enforceable. An exception would be if you accepted some sort of bonus that required a prorated repayment if leaving early. Speak to a lawyer to be sure.

 

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[rev ronin]

I started a job as a new grad about a year ago in an UC, signed a TWO year contract that states there is no room for re-negotiation of salary after 1 year, only after 2.

Folks, don't do this--ever! No non-competes, no training periods, never agree to anything of the sort.  The people who want to put these things into place? Those are the ones who will try and use them to keep you working for new grad wages when you're worth more.

[AliB]

I started a job as a new grad about a year ago in an UC, signed a TWO year contract that states there is no room for re-negotiation of salary after 1 year, only after 2. I have an RVU bonus but mgt will not share production info with me. Needless to say, I am looking to leave ASAP. There is a clause in the contract saying if I leave before the 2 years, I have to pay a penalty.... anyone ever gotten around this/ is this enforceable? Any help appreciated.

 

First and foremost, you need to consult legal counsel with some expertise in employment law in your area.  There is some variation from state to state on enforceability of contracts and much depends on the actual terms in the contract itself.  With the existence of a written contract, it is usually considered to be the entire agreement and no verbal or other documents not explicitly incorporated are considered to be relevant.  

 

A penalty clause usually has to be fairly explicitly tied to some compensatory component or to demonstrable damages ... AND it has to be reasonable, i.e., if losing you as an employee is going to 'cost' them $1, but the penalty is $8K, most would consider that punitive and not reasonable.  As cinntsp has already noted, if there was some exceptional expense or compensatory item that they can reasonably argue, a prorated penalty might be considered reasonable, but not an all or nothing.  

 

FWIW, when a contract term is deemed unreasonable, courts rarely 'modify' the term, they just rule that the contract is void.  

[ventana]

you need to review your contract

 

if you have a right to production numbers you should demand them, then verify them with the insurance companies - the company might let you because they don't want you poking around their books...  Are they billing under your pin or are the doing it all under a doc - is this legal??

 

it is a highly complex problem

 

 

NEVER sign contracts like that!

[glikesw]

Just bumping this up to see if anyone else has additional thoughts. I'm kind of going through a similar thing and while I've learned my lesson about signing contracts with penalty clauses I do wonder how do you maintain an amiable relationship with current employer and start a legal dispute. I mean are you just totally writing off your current employer as a future reference?