Do the Right Thing
My new hire just quit. Should he return his signing bonus?
By Jeanne Fleming, Ph.D. and Leonard Schwarz

(MONEY Magazine) - Question: I graduated from a business school that prides itself on the emphasis it places on ethics. Last spring I gave Scott, an M.B.A. who was graduating from my old school, a $10,000 signing bonus to work for my small software company. Six months later he quit to take another job. I told Scott he was ethically obligated to return at least a portion of the signing bonus. He disagreed, arguing that his employment contract did not call for it to be returned. I realize I have no legal recourse, but ethically, who's right here?

Answer: No one. When you require an employee to sign an employment contract--when he has to sign an agreement drafted by your lawyer to protect your interests--you forfeit the right to complain about the employee acting in his own self-interest if he's not in violation of that agreement. It would be one thing if you'd hired your fellow alum on a handshake. But crying foul when you believe an unwritten rule has been broken doesn't wash--not when you had every opportunity to put the rule in writing in the first place.

That said, Scott must have slept through those ethics classes. Bailing out so soon on a small firm that invested a lot in him--one that hired him in part because of those classes--is not in the good ethical practices playbook. While Scott may have honored his contract (as we assume you did), it was dishonorable for him to take the money and run. If a prospective employer of his ever contacts you, perhaps you can find a way to illuminate Scott's character.

Questions about money and ethics? Our ethicists are consultants who advise attorneys on people's ethical beliefs. E-mail them at right_thing@moneymail.com. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.