View Full Version : Employment Agreement with Liquidated damage clause - need advice

02-07-2013, 08:22 PM
Hello folks, I am about to take up a new job in Georgia, USA and the employment agreement contains the below clause,

In the event that Employee voluntarily terminate his employment with
Company or Company terminates your employment for cause (such as misconduct, insubordination, substandard performance, excessive absences, breach of this agreement etc.) within one (1) year of the commencement of your employment with Company, Employee agrees to pay Company, as lawful liquidated damages and not as a penalty, the sum of $ 7,500.00. You acknowledge that this liquidated damages sum is a reasonable and good faith amount in light of (1) the anticipated or actual harm to Company caused by Employee’s termination or breach, including but not limited to the substantial effort, time and expense that Company will incur in, employing , relocating and training Employee during his employment, and replacing Employee’s services upon such termination and (2) the difficulty of proving the exact amount of such harm to Company and the non-feasibiltiy of otherwise obtaining an adequate remedy. The liquidated damages do not include outstanding loans or advances owed by Employee to Company, and such sums will be owed in addition to the liquidated damages upon termination.Employee expressly authorizes Company to deduct and withhold all such amounts to be paid by Employee from any compensation or other amount otherwise payable to Employee.

Is this contract legally binding and am I obligated to pay the liquidated damages in case I resign before 12 months? Please advice.