Company asking to pay H1b transfer costs after I decided not to start employment. Offer letter mentions no such clause.

[rahul verma]

I accepted offer from a Startup company and they started the h1b transfer process which got approved subsequently. 
However in the meantime, I got a better offer from another company in terms of work quality and company stability and decided to join the other company. 
I emailed the startup that I would be unable to start. They are asking me to pay $6200 for costs associated with the h1b transfer. There was no clause in the offer letter about paying up h1b costs to the company in such an even where i don't join them. 

Am I still liable to pay? I am in California. They are telling me that if I don't pay they will ask their attorney to reach out to me.

The only clause about Arbitration from the offer letter is verbatim below 

"Arbitration"
You and the Company shall submit to mandatory and exclusive
binding arbitration of any controversy or claim arising out of, or relating to, this Agreement or
any breach hereof, provided, however, that the parties retain their right to, and shall not be
prohibited, limited or in any other way restricted from, seeking or obtaining equitable relief from
a court having jurisdiction over the parties. Such arbitration shall be governed by the Federal
Arbitration Act and conducted through the American Arbitration Association in the State of
California, San Francisco County, before a single neutral arbitrator, in accordance with the
National Rules for the Resolution of Employment Disputes of the American Arbitration
Association in effect at that time. The parties may conduct only essential discovery prior to the
hearing, as defined by the AAA arbitrator. The arbitrator shall issue a written decision that
contains the essential findings and conclusions on which the decision is based. You shall bear
only those costs of arbitration you would otherwise bear had you brought a claim covered by this
Agreement in court. Judgment upon the determination or award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.

[JoeF]

It is illegal for a company to ask for money for an H1. 20 CFR 655.731.

[sdpard]

On 1/12/2017 at 11:12 AM, rahul verma said:

I accepted offer from a Startup company and they started the h1b transfer process which got approved subsequently. 
However in the meantime, I got a better offer from another company in terms of work quality and company stability and decided to join the other company. 
I emailed the startup that I would be unable to start. They are asking me to pay $6200 for costs associated with the h1b transfer. There was no clause in the offer letter about paying up h1b costs to the company in such an even where i don't join them. 

Am I still liable to pay? I am in California. They are telling me that if I don't pay they will ask their attorney to reach out to me.

The only clause about Arbitration from the offer letter is verbatim below 

"Arbitration"
You and the Company shall submit to mandatory and exclusive
binding arbitration of any controversy or claim arising out of, or relating to, this Agreement or
any breach hereof, provided, however, that the parties retain their right to, and shall not be
prohibited, limited or in any other way restricted from, seeking or obtaining equitable relief from
a court having jurisdiction over the parties. Such arbitration shall be governed by the Federal
Arbitration Act and conducted through the American Arbitration Association in the State of
California, San Francisco County, before a single neutral arbitrator, in accordance with the
National Rules for the Resolution of Employment Disputes of the American Arbitration
Association in effect at that time. The parties may conduct only essential discovery prior to the
hearing, as defined by the AAA arbitrator. The arbitrator shall issue a written decision that
contains the essential findings and conclusions on which the decision is based. You shall bear
only those costs of arbitration you would otherwise bear had you brought a claim covered by this
Agreement in court. Judgment upon the determination or award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.

The company cannot ask for money legally. However, on a moral side, did they do you a favor by doing the transfer? If so, you should not penalize them for their kindness! (Of course, you can always rationalize that they were aiming for profit)

 

This is just a friendly discussion. Not a legal opinion.