Luther, Collier, Hodges & Cash, LLP – Attorneys at Law

ALABAMA – Employment – Contract Enforcement

The Supreme Court of Alabama has been asked to decide on the enforcement of an employment contract granting relocation expenses, but requiring the reimbursement of those expenses for voluntary termination of that employment, when the employee claims a hostile work environment. The Court decided for the employer, requiring the returning of relocation funds, plus prejudgment interest and attorney’s fees.

When Arnold began working for Hyundai, he signed an employment agreement that granted him relocation fees to move to the area where he would be working, which also contained a provision that Arnold would be required to repay the relocation fees if he voluntarily terminated his employment within 24 months. Arnold began working, and developed personal issues with one of the managers. Arnold claimed this manager created a hostile work environment, berating him in front of coworkers, publicly humiliating him, and giving him extra work to the point where he worked several 24-hour days. Arnold claimed that, unable to cope with these work pressures, he resigned his employment.

After Arnold’s resignation, Hyundai sought recovery of the moving expenses they had paid him, totally over $60,000. Hyundai received summary judgment on its claim. Thereafter, Arnold appealed the summary judgment, whereas Hyundai cross-appealed the award, claiming that it was entitled to interest and attorney’s fees per the contract, in addition to the figure representing moving fees.

The Court ruled in favor of Hyundai, leading to a final judgment in its favor for almost $100,000. The Court heard Arnold’s arguments about his mistreatment, and determined that his equitable arguments did not change the fact that he had contracted to reimburse his relocation funds if he voluntarily terminated his employment within the two years, and that he had so voluntarily terminated his employment.

The Court’s decision reinforces a strict construction of contractual terms, and signals to employers that they can have success pursuing such claims. Crucially, the employment contract did not have a “good cause provision,” which might have lent support to his equitable arguments about mistreatment. On the other hand, the Court’s holding provides an odd incentive to employees apprised of the law for them to circumvent this rule by intentionally inducing their employer to terminate them.

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Arnold v. Hyundai Motor Manufacturing Alabama, LLC (July 12, 2019).

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