In Wasanyi v. Rite Aid Corp., (W.Va. Supreme Ct. Oct. 20, 2015) (memorandum decision), the West Virginia Supreme Court of Appeals upheld a judgment in favor of Rite Aid against its former employee, David Wasanyi, to recover a signing bonus that paid to him.
The terms of Wasanyi’s employment were set forth in an offer letter, and included a $10,000 signing bonus. The offer letter stated that it did not constitute a contract; however, attached to the letter was a promissory note that characterized the $10,000.00 signing bonus as a loan, and provided that the loan would be forgiven upon the completion of two years’ service. Unlike the offer letter, the promissory was a contract, and was signed by Wasanyi. The loan became repayable if Wasanyi separated from employment “for any reason.”
Less than two years after his hire date, Rite Aid fired Wasanyi, and he failed to repay the note within 30 days, as required. Rite Aid sued to recover the $10,000 (plus 6 percent interest required by the note) and the circuit court entered summary judgment for Rite Aid.
On appeal, the state supreme court affirmed, agreeing with Rite Aid that, although the offer letter was not a contract, the promissory note was.
Moral to the story: Any time you are expecting an employee to repay anything that looks like wages, it’s a good idea to obtain a note signed separately by the employee. Don’t rely on a document such as an offer letter or handbook policy that states it is “not a contract.”