A Particularly Nasty Clawback

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If the misfortune of selecting Lehman Brothers as your employer straight out of an expensive MBA course weren't enough to deal with, some members of Lehman's associate class of 2008 say they're now being stung for the $40,000 sign-on bonus the bank paid them when they arrived.

The requests are allegedly coming from PricewaterhouseCoopers, which is administering Lehman's estate in the UK. "More than 60 percent of my class received this letter around two weeks ago," says one former Lehman associate. "We're seeking legal opinions on whether we have to pay it back."

Another member of Lehman's 2008 associate class alleges that the claims aren't simply for the sign-on itself, but include interest payments and an increment for the depreciation of the pound.

PWC was unable to immediately comment on the veracity of the claims.

Payments Were Forgiveable Loans

One associate admits that the structure of the payment left open the possibility of claiming it back in certain circumstances. "It was structured as a forgiveable loan - if we worked at Lehman for more than a year and didn't quit or weren't fired, we could keep it. If not, we'd have to pay it back."

Given they only worked at Lehman for six weeks before the bank went under, and were then cast adrift with no income and a large MBA loan to support, the decision to retrieve the cash seems a little harsh.

Elaine Aarons, a partner who acts for senior executives at law firm Withers, says PWC might be able to extract the money from the unfortunate associates if the contracts were worded so that the loans were repayable if they simply weren't in employment with Lehman 12 months on.

"Whilst it may seem unreasonable on a common sense basis to have to repay something that you've probably already spent when you have done nothing wrong, it's not impossible that on a strict reading of the contract events have triggered the conditions in which a repayment would occur."

If the wording in the contract is vague, Aarons says the benefit of the doubt will probably lie with the associates: "Any ambiguity is usually construed in the individual's favour."

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