If a company overpaid a settlement amount to a previously terminated employee, is the employee under legal obligation to repay?

UPDATED: Oct 1, 2022

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If a company overpaid a settlement amount to a previously terminated employee, is the employee under legal obligation to repay?

The payment was due to an EEOC mediation settlement for wrongful termination. The
amount is over 25K. The terminated employee requested, in writing, a manual
check. The company mailed the check but also inadvertently processed it as a
direct deposit. Basically, it was a double payment – a check and a direct
deposit. Can the company legally force the prior employee to repay?

Asked on January 10, 2019 under Employment Labor Law, Louisiana


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The law disfavors "unjust enrichment" which is what you have here - a double payment mistakenly made. Accordingly, you will have to return the overage to your ex-employer. They can sue you for it if you don't reimburse them. And think about it, has you been accidentally shorted, you would be entitled to the difference since your former employer would be "unjustly enriched" otherwise.

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