Policies, Not Promises

By Martha Frase-Blunt May 1, 2004

May 2004 HR MagazineAlan I. Model, principal at the law firm of Grotta, Glassman & Hoffman PA in Roseland, N.J., points out that airtight relocation policies can protect an employer from charges leveled by disappointed transferees, as well as by those who feel slighted by not being offered a new opportunity elsewhere.

“Employers need to clearly define who will be relocated, based on objective criteria laid out in their policies,” he says.

Companies that tend to offer relocation opportunities only to staff who are single or to those who have weathered previous transfers, “may be open to charges of discrimination,” Model says. “You have to test your policies on several levels to ensure they are not having a discriminatory impact by eliminating categories of employees due to marital status, age, etc. It’s called a ‘disparate impact,’ and you have to think through all the possible biases that people could claim.”

Model also suggests putting a provision in the relocation agreement itself stating that any disputes will be subject to arbitration. “This can keep you out of court in most states,” he says. Even in places like California, which is hostile to arbitration, “It is possible to draft good language, with certain buzz phrases, that can make arbitration binding.”

It’s also a good idea to include language that defines which jurisdiction’s laws will be applied in case of problems.

Employers might consider adding a “payback” clause to a relocation agreement, in which the employee agrees to reimburse some of the moving costs if she or he leaves the employer within a specified period of time. Conversely, an employer could offer the transferee an employment contract for the same period of time.

“HR people are sometimes hesitant to require employees to sign agreements, but in this area it’s especially prudent to do so,” says Model. “It reduces the potential for legal exposure, and also makes the relocation smoother for the employee. There’s no question about expectations, and nothing for the employer to hide. You can handle these things in a nice, well-drafted agreement that will serve neatly as your defense, if necessary.”


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