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I'm negotiating my updated contract at work and my boss, in an attempt to get me to comply, told me I could owe him up to $20,000 if I were to quit.

His argument was that he invested a lot of money in me to help build my skill set, like paying for me to take web development classes. He said that all the mistakes I've made that have cost the company money were learning experiences for me and therefore if I took the knowledge I gained elsewhere I would have to pay him back for those learning experiences.

My argument is that he should have hired someone who knew what they were doing, like I recommended, as I never pretended to know anything I didn't know. I believe that even with the mistakes I have made + cost of education + salary I have still been less expensive than a proper web developer/project manager/manager.

I don't think he can do that, as I don't even have a contract with the company I work for at the moment. Is that accurate?

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    I've been with him for a year and a half. We switched the incorporation so my old contract is no longer valid. Even if it was valid it doesn't have anything like that in it. – mightQuit Apr 19 '16 at 19:28
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    If he is serious about this, I would consult a lawyer. IANAL, but if it was not specified in a contract, then you owe him nothing. – David K Apr 19 '16 at 19:28
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    Is he proposing a retention clause in your new contract or saying that this is outlined in your existing one? If it's a clause in the new contract, don't sign any contract unless you agree to all of the terms. – Myles Apr 19 '16 at 19:28
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    @mightQuit What country? – Myles Apr 19 '16 at 19:33
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    Think of this: if you cost the company "up to" 20k and you're a "screw up" why would they want to discuss extending your contract? Why would someone keep someone on board who can cost upwards of 20k but they hope you learn? That makes zero sense. So it's obvious he's just trying to keep you by threatening you because you actually do good enough work but he doesn't want to say it because it'll mean more money. – Dan Apr 20 '16 at 14:10
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Is that accurate?

Unless it's in writing on your contract and you agreed to it, then he's just blowing hot air. You don't owe him anything.

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  • Even if he did sign something, I can't imagine it would hold up in court. How can they measure how much money they lost because you made an error? Perhaps education, etc might have conditions to work for X amount of time, but I can't imagine they would have a legal way to measure how much money they lost. – Dan Apr 20 '16 at 13:57
  • If mightQuit tracked his time on some time-tracking software as is common, he or other employees may have put in the number of hours they spent spent on fixing errors. Multiply that by their hourly wage and there you go. – colmde Apr 21 '16 at 8:32
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    @colmde That would prove nothing. Everyone knows fixing errors (debugging) is a big part of the job. – Brandin Apr 21 '16 at 8:43
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    @Brandin I agree completely, just addressing how they might measure how much money was lost because of errors... – colmde Apr 21 '16 at 10:25
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Check your contract or the terms of your employment agreement.

Typically any mistakes that you make are not considered paid learning opportunities - they are part of the work and the cost is absorbed by the employer. There are types of piece work jobs where delivering a flawed item can result in lower payment, but that would happen during the delivery process.

Education can be trickier - many corporations DO have a clause in large cost education funding where the employee must pay back the employer for the cost of the education on a prorated basis if the employee leaves within a certain time frame. This is usually for big stuff - like college credits and never (in my experience) for small stuff - like books, tools, or cheap courses. OR time spent learning on the job.

Typically when the situation is one where the employee is obligated to stay employed by the company or they must pay back tuition, this is abundantly clear - you would have signed many forms to this effect and had to do some level of application to get the funding in the first place.

At least in the US, never underrate someone's litigiousness, but I would not think that this is normal. When in doubt - check with a lawyer and HR.

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  • HR is there to protect the company. It's a complete fallacy to think they are there to protect the employee. In a large company once they heard about this story they might start thinking about getting rid of the boss, but it wouldn't save the OP. But it seems to me this is a smal company and the boss is the owner - nobody but an owner would demand such a payment. Therefore HR will be completely in his pocket. – Level River St Apr 19 '16 at 21:45
  • In any company, my question to HR would NOT be "hey, can my boss do this?" but - "can you tell me about your policies for educational reimbursment obligations upon resignation?" - there should be a written down policy that clarifies the obligations on both sides. If I were particularly paranoid - I would print a copy, get the HR to sign and date it, and take it to my lawyer. – bethlakshmi Apr 21 '16 at 19:22
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Personally if someone did this to me, I would consult a lawyer to get him to review my old contract and the proposed new one. If he agrees that you will not have to pay back money, I would ask him to write a letter stating that, in his legal opinion, you have no obligation to pay any money on resignation and then turn in a copy of that letter with my resignation rather than signing the new contract. That money spent for legal advice will be some of the best money you ever spend. He is relying on you to not know your legal rights or not be willing to pay to defend yourself or that the threat will scare you into staying.

If he knows you have consulted legal counsel, he is less likely to try anything when you quit. Bullies look for easy targets. They will push far harder on people without legal representation. They don't actually want to spend a lot of money on a suit they will lose.

One thing I would not do is sign a new contract with this person unless I would starve to death without this job. If someone descends to this level of threat, then there is no way I would consider continuing to work for him if I had the skill set to get another job.

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If you are in the USA, which I am guessing due to the "$20,000", unless you signed a really stupid contract, you owe your boss nothing. Absolutely nothing. It may be in your contract that you owe him two weeks notice, that's it. You work, he pays, you're quits.

Did you learn things in your job? Good for you. Good for your boss, because you did a better job. How DARE he complain about that. Did you make mistakes? Good for you if you learned from them. Tough for your boss. Not your problem, and after what he said to you, he deserved it.

I recommend looking for a new position at a company run by a sane person. Obviously without telling anyone about it. And when you found something better, you sign the contract with your new company, and give him your two weeks notice.

If at that point he tries to tell you that you owe him money, don't argue with him. It's pointless. If you put in your notice, you might say "we both know that this is nonsense. But if you insist, write me an invoice and I'll hand it to my lawyer".

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  • Yes, its the USA – mightQuit Apr 19 '16 at 21:29

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