Company Tuition Reimbursement--- Any lawyers recommendations?

[mcmanutm]

So my husband received his MBA last May (12 months ago). His company paid 100% of the tuition. Company policy says that Employees receiving tuition reimbursement coursework approval payments on or after the effective date of this policy and who voluntarily terminate employment from the Company within 24 months will be required to repay 100% of all company tuition reimbursements received during the previous 48 months. This policy was not put into place until Summer of 2012.

Anyway, DH's position at work was recently changed (which he was upset about) and he decided to leave the company and accepted a new job offer. Now this tuition reimbursement policy is coming up (which we were aware it probably would). :( They want to go back to 2010 and say we owe XXX amount of money because he is voluntarily leaving before 24 months. Can they retroactively do this....even though the policy wasn't put into place and signed until 2012. We were thinking they would go back to 2012, but not to 2010. I guess we will have to consult a lawyer. Any recommendations though?

[westwoodmom04]

So my husband received his MBA last May (12 months ago). His company paid 100% of the tuition. Company policy says that Employees receiving tuition reimbursement coursework approval payments on or after the effective date of this policy and who voluntarily terminate employment from the Company within 24 months will be required to repay 100% of all company tuition reimbursements received during the previous 48 months. This policy was not put into place until Summer of 2012.

Anyway, DH's position at work was recently changed (which he was upset about) and he decided to leave the company and accepted a new job offer. Now this tuition reimbursement policy is coming up (which we were aware it probably would). :( They want to go back to 2010 and say we owe XXX amount of money because he is voluntarily leaving before 24 months. Can they retroactively do this....even though the policy wasn't put into place and signed until 2012. We were thinking they would go back to 2012, but not to 2010. I guess we will have to consult a lawyer. Any recommendations though?

It's hard to tell without seeing the language verbatim. The factor that goes most strongly against your husband is that he knew of the policy change and continued to accept tuition money. He also knew of the policy when he decided to seek new employment. Definitely consult with an employment law attorney in your state.

[minnie-zb]

But it seems like what you wrote would include your husband as the policy is retroactive for the previous 48 months when the policy was signed in 2012. I'm interpreting it to mean it would be retroactive back to 2008 (2012 minus 4 years). Since your husband just finished his MBA in 2013, it looks to me like he would be included in this. I'm assuming he signed the policy?

[lhafer]

I agree with Minnie, without reading the contract. It sounds like even though the policy started in 2012, the company is covering their investment (because that's what paying tuition is for them) for 4 years prior to that. So if the policy started in 2012, it goes back to 2008. At least that's how I read it.

[BunnyBee]

I would consult an employment lawyer in your state. The legality of the retroactive portion is questionable. It's not as if he could hop in his time machine once the new policy came out; he had accepted that bonus and the company had given it based on the stated considerations at the time. Once he accepted under the new terms though... It's possible the company's change to his job duties is material enough to get him out of the policy. Lots of possibles! Get to an attorney ASAP. Ideally he would have consulted one prior to departing, but that ship has sailed. Good luck!

[div_0305]

I think the company is right. What did your DH think the 48 months was referring to? He accepted money AFTER the effective date, so yeah, he's accepting the terms for the retroactive investment protection the company was looking for. Think it's quite stupid of the company to have only had that policy effective in 2012. I've never heard of a company offering any tuition reimbursement without promising to work for a certain number of years (with a good or better performance evaluation mind you) as consideration.

[wellyes]

Might be worth hiring a lawyer, but, the language to me appears to support the company unambiguously.
Employees receiving tuition reimbursement coursework approval payments on or after the effective date of this policy and who voluntarily terminate employment from the Company within 24 months will be required to repay 100% of all company tuition reimbursements received during the previous 48 months.
1. He received reimbursement after the date of the policy
2. He's voluntarily terminating employment
3. Therefore he is required to repay 100% of reimbursements from the past 48 months

It seems like a reasonable policy, honestly. Why would they pay for education that will be used to get him a job elsewhere, and then used at that competitor's workplace?

ETA - I hope he enjoys the new job. It stinks that he did this in good faith.... is leaving based on changes in the company, not trying to take advantage of the program. I bet if he knew the changes were coming, he might have delayed committing to the MBA and staying there. But, that's corporate life, sometimes you win, sometimes no.

[BunnyBee]

You also may want to consult a CPA--if the tuition reimbursement was untaxed at the time, it might be looked at as a bonus now. I don't know the specific regs, but a friend's DH got a very unwelcome tax bill when his graduate tuition reimbursement was found to be of the bonus-taxable sort.

[Binkandabee]

Impossible to tell without reading the contract word for word.

But, I think the fact that he knew about the new policy and then continued receiving benefits poses a problem for him. If he had refused to accept the new policy and didn't take any additional reimbursements, they certainly couldn't apply the policy retroactively. But, that's not what these facts are.

This isn't something I would just roll over and give up on, though. Definitely get the advice of an employment law attorney!

[ckso]

Might be worth hiring a lawyer, but, the language to me appears to support the company unambiguously.
1. He received reimbursement after the date of the policy
2. He's voluntarily terminating employment
3. Therefore he is required to repay 100% of reimbursements from the past 48 months

It seems like a reasonable policy, honestly. Why would they pay for education that will be used to get him a job elsewhere, and then used at that competitor's workplace?.

I agree. He probably signed the change in policy accepting the change that indicated he is required to pay 100% back to 48 months and I would also guess that there's verbage in there indicating that the new policy replaces the previous policy not just moving forward.


You also may want to consult a CPA--if the tuition reimbursement was untaxed at the time, it might be looked at as a bonus now. I don't know the specific regs, but a friend's DH got a very unwelcome tax bill when his graduate tuition reimbursement was found to be of the bonus-taxable sort.

It's technically considered a taxable fringe benefit and part of income. For example, in my previous company the salesmen have a company vehicle that they may be used for personal reasons (ie driving to/from work, weekends) and we calculated a percentage of the lease cost of the vehicle and added it as taxable fringe benefit in their yearend W2.

[cuca_]

Definitely talk to a lawyer. If the changes to your DH's position were substantial, enough, it could be seen as a constructive dismissal, rather than a resignation. So he could argue, that even if the terms of the tuition reimbursement agreement apply to him, he was essentially fired from his job when the terms of his position were modified. Of course, I don't know the details, so I am not sure if that is the case.

[mcmanutm]

Thank you all for your help. My DH was able to thankfully settle it. We owe the company money, but it is a manageable amount. Feeling relieved! Thanks for your expertise!