Communicating to employer that commitment-/retention-agreement is legally void

Question

Background:

I´m located in Germany. Four years ago, I started a master program next to work which ended two years ago. The cost for the program was $50k of which I paid half, and the other half was paid by my employer. For this support, I had to sign a commitment-agreement or retention-agreement (not sure of the right English word) which states that I must pay back the money my employer paid if I leave the company earlier than four years after finishing the education.

Issue:

While I was and am grateful for the support, I do have the feeling that this agreement is used over its original purpose. Before I started the education, several possibilities of what I could do after it were discussed of which none then actually happened. There were some other smaller issues but probably most important for me, there weren´t any improvements in salary, which was already low before I started the education. I feel that the company might think that I don´t need salary increases since I´m not going to leave because of the agreement.

This has made me unhappy to the point where I had a lawyer look into the agreement coming to the clear conclusion that it is legally void due to several legal issues/mistakes in the agreement. Legally I wouldn´t have to pay back anything if I left. I want to communicate this information to my employer.

Question:

How do I say this without being offensive? I do want to communicate that I am not forced to stay under any conditions (due to the fear of having to pay back thousands of dollars) and that I can leave the company at any point in time just as other employees and therefore expect an appropriate salary.

On the other hand, as currently I just want to push for better (normal) conditions and do not want to leave the company, I would like to avoid a reaction where the company understands that I do want to leave with not paying anything which would quickly result in a bad situation.

Thank you for reading!

Answer 1

I've had a somewhat similar experience with a non-compete clause.

I worked for a consultancy business (company A) for two years. During those two years, I only worked at one client (company B). I wasn't paid market rate at company A, and the training that was promised to me never came through. When I asked for a raise at my one year review, I was given a minimal amount, I was still paid 15% below market rate. Months later I had another meeting to talk about this (many employees left, mentioned being underpaid as a reason), it didn't change much. I also learned during my time there that the only way to get what you want/deserve/were promised, is to threaten to quit. That's not my style, I decided to job hunt. The client, company B, asked me to work for them directly. I had a non-compete clause in my contract but knew from my colleagues (and later a lawyer) it wasn't valid. Because of other circumstances, I ended up taking the job at company B.

So here are a few things I learned :

• Be ready for legal action. They tried to scare me with it, sending me a mail from a lawyer, I went to a lawyer who wrote them back (and confirmed there the clause was void).
• Be ready to burn that bridge. Some people there supported me (and were outraged he threatened me with legal action), but the big boss was very unhappy. Thankfully he has a reputation in my field to be a bit of a stingy bully, so I don't think this will affect me when I'll be job searching again.
• Don't humor them. Give your notice like you would any other job. I accepted an exit interview and was questioned for hours. I should have left after 30 minutes, but I wanted to try and save the relationship. It was not worth it.

They did make a counter offer. It was very good, if they had offered me half of that at my yearly review or the second time we talked about my salary, I wouldn't have left. I would have made more money had I stayed, but decided to leave. By threatening to leave, my relationship with company A was already on the rocks. The same issues would also continue later on (I probably wouldn't get a raise or anything for the next years). And I had already signed a contract with company B, if I canceled it I would have ruined that relationship also.

So don't threaten them. Don't go to them saying "I know I can leave when I want, so pay up". There's no non-offensive or elegant way to say this. If you'd really like to stay, try one last meeting with your manager, explaining that you're really unhappy with your salary and/or benefits. Also, make your case for it, explain why you deserve a raise. If they still don't and you're not worried about burning a bridge, start job searching.

Answer 2

I would not indicate to them that I think this is void. This should only be tested during a legal escalation.

I recommend: Point out to your boss that you also invested money in being of more service to them, and indicate that on the current course your will only have the option to leave at the first point where it is economically feasible for you.

If that does not work out, look for a new job, if you have one, resign, wait for the invoice and let your lawyer draft the response. Chances are that they may reconsider their path before they write the invoice and make you a counter offer. 25000/4years/(12month/year) = 520 Euro salary difference per month, so even if that doesn't end well, you are probably better off with a new job.

Answer 3

I wouldn't say anything about the contract being illegal. The thing is, you know it's illegal, they don't. They think they have leverage over you, and you know they don't, and that's an advantage for you. Knowledge, as they say, is power.

You should kindly (kindly) explain to them that you have come to understand that your salary is below market rate, and that you would like a raise to have your salary be competitive with the market. Explain to them, as you explained here, that you like the company, you want to stay there, but you just can't stay for such a low salary. The company is likely to decline your request, and if they do, then IMO it's a point of respect: The company is disrespecting you by paying you a fraction of your value because they think they hold power over you. At this point, you have a choice to make: Do you like the company enough to stay there at your current salary and be disrespected, or do you want to change your company for a higher salary and respect?

Here's the thing: There are lots of companies out there that you will like. You're not married to the company, and they're not your "soulmate". Find another company you think you would like, and try to get a job there. Then, once you have an offer, you should quit your current job. The company will likely come after you for the money you "owe" them. At this point, I would make a statement something like this:

Dear [whoever you are talking to],

It has come to my attention by speaking with legal counsel that your contract requiring me to pay this balance is not a legal contract. I feel as though you have disrespected me on multiple occasions, and I do not feel welcome in this company. The first time you disrespected me was by giving me this faulty contract, expecting that I was stupid enough to not check the facts. The second time is when I was hired full-time, but paid only a fraction of a full-time salary, despite raising the issue with you on multiple occasions. You have three choices now:

1) You can let me go in peace and not raise this issue again

2) You can make a counteroffer to try to retain me. My other company is willing to pay me a salary of $XXX (give them a round number, close to the actual number, but don't give them the actual number, because that could cause legal issues in some places)

3) You can attempt to take me to court; however, as previously described, I have already checked my legal standing in this matter and I will win.

Pending further action, my resignation stands as previously submitted. Please contact me to advise me of your decision. If I don't hear from you again, I will assume you have chosen the first option. Sincerely,

MlleMei

Then you let them do as they like and see where the chips fall.

Answer 4

How do I say this without being offensive?

You sound a little naive there. You are offensive. Why do you think they gave you 25.000 in the first place? They don't act out of the goodness of their hearts. They made a deal with you. You got 25.000 in advance and they will get their money back with interest, by paying you below market rate for 4 years. That is the contract you signed. Willingly.

Now that you got what you wanted, you feel like paying them back is not in your best interest, because you are losing money. Well, guess what, that is what "paying them back" means. You lose money.

Your lawyer might find a legal loophole in that contract, but you don't hold the moral high ground here. You are not looking for justice. You have not been wronged. You hired a mercenary to strong-arm you out of a contract you willingly signed and which advantages you willingly took. But you don't want to pay back.

So whatever you say, will be offensive.

I see two ways here.

One is you go full rogue. To hell with it and your reputation. Break the contract, either on your own or with a lot of legalese, leave the company and burn that bridge. Do not expect them to give you any references and you do not want any "qualifiziertes Arbeitszeugnis" from them. Showing that to your next employer would be the end of that interview. If your current employer is not that important, doesn't have a network or does not exist in a city or country you move to, it might even be the preferred way of action.

Option two is to sit it out. It's what you agreed to. Yes, it sucks. But every time you have to make a payment for a new car, or house or wedding ring, it will suck. You lose money. You cannot just walk out of contracts you signed. Make the best out of it. Enjoy life. Don't do overtime or more work than necessary and go find a better employment the minute your contract ends. Smile, say "thank you for the opportunity" and take your efforts elsewhere, wherever they may be appreciated. Get a good reference and make sure next time you actually want what you sign up for before signing it.