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Early resignation ransom clause in employment agreement California

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  • Early resignation ransom clause in employment agreement California

    I’ve signed an employment agreement six months ago due to lack of a better offer. This agency is in the business of "locating and training technical consultants and providing consulting services" for their clients. Of course there was no any training and pay was below market. Today I have significantly better options and asked for a raise. However they refused to review my salary and threaten with legal actions if I quit without paying them $10,000 as compensation for early termination. Is such “early resignation ransom” legal and how I can fight it? BTW, the agreement says that employment is “at will” – how can “at will” work in one direction only? Here is the TERMINATION BY EMPLOYEE clause:

    The term of this agreement shall commence as of the date above set forth and shall terminate on the last date of the contract completion at the client location or one year from the start of the client project whichever is earlier.
    EMPLOYEE may terminate upon two weeks prior written notice to EMPLOYER by certified mail, return receipt requested, or delivered in person and initiated by competent official of EMPLOYER. EMPLOYEE hereby acknowledges that it would be difficult to determine the precise amount of damages that would be caused to EMPLOYER by way of early resignation, which losses would include loss of customer good will, loss of recruiting, sponsoring, training, transporting, housing costs and potential or actual bench time losses, as well as loss of profits during down time necessary for replacing said EMPLOYEE at the customer side, as well as other and further losses. EMPLOYEE accordingly agrees to pay liquidated damages to EMPLOYER in the amount of $10,000 should EMPLOYEE resign or provide grossly negligent or intentionally deficient services so as to cause EMPLOYEE’s termination by EMPLOYER prior to completion of said 12 month term.

  • #2
    See an attorney. Immediately. Since the agreement says that "losses cannot be determined", I find it hard to believe this clause could be enforceable.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


    • #3
      do you think they have a serious chance with this if i just ignore it? thank you for your reply.


      • #4
        I wouldn't want to take that chance.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


        • #5
          They aren't ignoring it. You shouldn't. Should they win, they will get their money from you.
          Last edited by Horatio; 11-20-2006, 06:54 AM.


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