I Got Laid Off. What Does the Company Owe Me?

Last Updated May 18, 2011 12:17 PM EDT

Dear Evil HR Lady,

I just got laid off. I had a signed agreement that the company reimburses tuition for grades of C or higher, but I'm in the middle of a class. Are they still required to pay it? What about relocation costs? My agreement was that I would have to repay if I quit in less than 2 years, and it's only been 18 months. Are they going to come after me for that? How much severance should I expect?

This is yet another example of why you should read before you sign anything. All contingencies need to be taken into consideration. However, with a layoff, regardless of what you've signed, a company would find it difficult to get any relocation money out of you. Can't get blood from a stone and all that.

First severance: I think companies should offer severance, but in most cases they aren't required to do so. The bigger the company, the more likely they are to offer severance. If you are offered severance, consider yourself lucky. If you're not offered severance, certainly ask about it. I mean, what can they do to you? Fire you?

Next, relocation costs: I'm not a lawyer, nor do I offer legal advice (because I'm not, you know, a lawyer), but I'm guessing that your relocation contract said something along the lines of you must repay costs if you "resign" or are "terminated for cause" in less than 2 years. A layoff, by definition is not a termination for cause, so you are most likely in the clear. Check your paperwork to make sure.

Your tuition reimbursement may also have a similar clause. Many companies require you to work for 2 or 3 years after your last reimbursement check in order to avoid repayment, either in part or full. However, with a layoff, companies are generally compassionate and realistic. They may not pay for a course you haven't finished yet, but they probably won't come after you for your previous courses.

However, just like salaries are negotiable when you're hired, terminations are negotiable when you're fired. If the company is offering you any severance (and even if they are not), they probably handed you a document called a General Release that they asked you to sign. You have a certain amount of time to review this document and the option to do so with a lawyer at your own expense. If you have any questions at all, it's worth the money for a quick legal consultation.

This document will spell out what the company will give you and what you will do in exchange. Typically, you agree not to sue them and they agree to give you money, forgive relocation costs, and nullify non-compete agreements. If your release doesn't contain information about tuition reimbursement ask. If your release don't nullify a previous non-compete, ask. If they won't nullify the non-compete, the severance should be at least as long as the non-compete period, in my non-lawerly opinion. Many courts nullify non-competes if they don't allow you to earn a living and the courts don't generally look fondly on companies that fire you and then forbid you from working.

But, get it in writing. There will be an HR person who will answer your questions and she just might say, "Oh, I know it says x, y, and z, but we don't enforce those." Well, whoop-tee-do. Tell her you want it changed. She is undoubtedly telling the truth, but the courts will look at the signed release as the proof of what the agreement is. (Again, I say this as a non-lawyer, but I have laid off thousands of people.)

Ask straight you, "Can I receive reimbursement for the class I'm taking now. Will I be expected to repay any amounts I've received previously? Will I have to repay any of the money I received for relocation?"

All of these questions are socially acceptable, so don't feel bad asking about them. At the end of the day you don't want to sign a document that you don't agree with.

But, in practical terms, I would expect that 1. you'll get at least a small amount of severance 2. you won't have to repay any relocation, 3. you won't have to repay any tuition reimbursement they've already given you and 4. you have a 50/50 chance of getting your current class paid for. But, you won't know unless you read your documents and ask.

And remember, the goal of a general release is to get you to go away quietly. Let them know you'll be happy to go away quietly once every i is dotted and t is crossed to your liking. And, unless your're a really high level employee, you can probably do the negotiating yourself, but get a lawyer to check over it before you sign. It's worth the peace of mind.

Photo by Chuck "Caveman" Coker, Flickr cc 2.0

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