Are Training Contracts Enforceable?

[I Hate Freight]

Some friends and I were discussing training contracts. Just how enforceable are these things? Specifically, a training contract that says you must repay training costs if you leave or are terminated for "ANY reason whatsoever." Can you really be legally held to that? Is a judge really going to find an "any reason whatsoever" clause reasonbale and attainable? What if you're job is being eliminated for downsizing? What if your company was sold to another and you were not offered a job with the new company because you could not afford to relocate. What if someone is doing the best they can and loses his job through no fault of his/her own? What if, what if, what if.

I've heard some say these contracts are really unenforceable but some say otherwise. Anyone have any experience in this matter?

Just curious.

IHF

 

[icefr8dawg]

In talking to pilots most of the ones that have wiggled out of training contracts have gotten away without having to pay, an airnet pilot or two included. On the cargo side, what business person would spend several thousand dollars to enforce an agreement when the training itself costs less than the cost of legally enforcing the agreement? My feeling is that it is used as an instrument of intimidation (sp) to discourage pilots from leaving before the operator can recap training costs through revenue. I'm not a lawyer however and haven't yet broken an agreement so these are just my speculations.

I am thinking about doing some work for an operator as a 1099 Independant contractor, I wonder how my 1099 status would effect the enforcability of such an agreement?

Rob

 

[FN FAL]

I've heard some say these contracts are really unenforceable but some say otherwise. Anyone have any experience in this matter?

Just curious.

Enforcing them might be one thing. Getting a job after breaking one, might be another thing.

 

[b747dogg]

During the late 90's I worked at a national carrier that had a 2 year $10,000 training contract. When I quit, the chief pilot asked me if I was going to pay the $10,000 and I said NO. He said, "ok, i had to ask, thanks for working here, good luck." I quit after 8 months, never paid a dime and now I work for a major. So, I think they are a bunch of B.S. Have fun!!

 

[starchkr]

I agree that they are "usually" unenforceable.

BUUUUUUTTTT......... I got to thinking while reading this about how someone mentioned that it would cost the company more to take it to court to get you to enforce it than it is worth. Well, not so now, one day these companies are going to realize that if they pay a whopping $40 they can take the contract to small claims court and they WILL get their money out of you. A signed contract is just that, a legally binding contract. Now maybe the claim will be limited by state statutes, but they will get something out of ya. It's all good business.

Man i hope no management sees this... that would suck if they really started to do it after i mentioned it...HEY !!!!!!! I WANT A CUT OF THE PROCEEDS!!!!!

 

[I Hate Freight]

Star, a contract has to be "reasonable" to be enforced as do the circumstances under which it was signed. It cannot be misrepresented, difficult to understand or signed under duress. So not all contracts are "legally binding." If I signed a contract saying that if I quit I would have to come to my bosses house every weekend and mow his lawn, do you think a judge will enforce that? Not a chance.

In the contract I mentioned, the "terminated for any reason whatsoever," clause I believe is unreasonable. If you are doing the best you can and find your job "terminated" through no fault of your own then what judge will enforce it? Also, this company tells prospective pilots about the contract ahead of time but they say "if you QUIT you must repay." Then after the training and checkride you sit down to sign the contract and there is the clause, "terminated for ANY reason whatsoever."

Well at that point what are you going to do if you don't like that clause? You've already quit your last job, completed the training and checkride and need to work! And as far as small claims court, the costs can be a lot more than $40. If a subpoenaed witness, defendant, etc is unable to travel to court the plaintiff must pay for travel in most states. There is no guarantee that they "WILL get their money." Just because a signed contract is "legally binding" that does not mean a judge cannot throw it out or rule it unreasonable. It happens all the time.

IHF

 

[icefr8dawg]

I've been on the Employer side of enforcing these things after we've paid tens of thousands of dollars to Microsoft, Citrix, ORCL, etc, to train our engineers. Our lawyers tell us "don't bother" when the employee runs out on us. The only time I exercised the agreement was when an employee was let go for cause and defamed our firm. It was worth the $300/hour lawer in that case.

Aviation is a small world. Unless you are leaving to go to a sure thing or leaving flying as an occoupation don't discount the fact that future employers WILL call the operation that you broke your agreement with. It related to the background and career checks that airlines perform. A good reason to leave under good terms.

And small claims just that, "small claims." I have no desire to spend my time in court and there is nothign "small" about my lawyer's invoices for going in my place. Not to mention, even after a judgement is made nothing guarentees that the nomadic pilot will pay up.

my .02

 

[starchkr]

You are right in some cases...

My view is this...If you cannot sit down and read the contract or do not understand some of the language then DON'T sign it. That is just common sense. Would you buy a car agreeing to pay x amount every month but not know the term of the payments because you were in too much of a hurry to get that new car. Right, and that is just a car, not your career (which will pay for that car) we are talking about. If you complete your training without seeing the contract you are just , for lack of better words, ignorant. The first thing a REPUTABLE company will do is sit down and explain the contract and give you the opportunity to back out before things get started. If they don't, move on. As far as quitting your job before you take the new one, you should have done enough research to establish a good idea of what that new contract will be...most likely you will not be the first one to have to sign it, and others will be able to give you the details. It all falls squarely on the shoulders of the applicant/ trainee to find out what the heck their new employer is expecting...and why would you break a contract anyway? Usually they are a whole whopping year...WOO HOO, 365 days, 52 weeks, 12 months...big deal, anyone can hang on for that lenght of time. OK, ok, so back to the topic of if they are enforceable...

If these companies wanted to get ya they would...my small claims court idea would work for them...but usually they are too busy to do anything about it anyway. Wording or not, you mentioned "terminated for any reason whatsoever," well yeah, if you get fired for something the company doesn't like then you breach your contract of time, therefore they can hold you liable for that contract. Now if that meant downsizing or the like then no, it is bogus, but be careful.

(the above was not meant in any way to flame someone for anything stated or represented. the opinions expressed are not those of this board or this community in any way shape or form. the author takes complete responsibility for his opinions, and they are just that, opinions.) -that crazy legal mumbojumbo small type stuff

 

[FN FAL]

Isn't 10,000 dollars a little bit too big of an amount for small claims court?

 

[starchkr]

FN FAL... yes it is, that is why i said that it would be limited to state statutes for claims...ie:3,000 or 5,000.

Also, you do not need lawyers for small claims, and you also do not need subpoenaed witnesses either. So the $300 hr lawyer is just an overpaid wind bag in a case such as that. Also, as far as having the lawyer go to court for you...come on, if you are in management or above, you have plenty of time to go yourself.

And hey, it was just an idea that could prove worthwhile for an employer to at least get some money from a contract that was signed by the employee under their own consent and understanding. Spend the cash to go to court (under $100) and come out with a judgement for 3-5K. Now yeah, the deadbeat who loses might not pay, but now they have a record of a judgement against them that will follow them around. I am sure that will show up nicely on a background check when you apply at that nice cushy major job you have been hoping for. I don't know, just an idea, i know if i was an employer i would do it. Not for the money side of things, but to show that a contract is not something to be taken lightly, and if you don't plan on completing the job/contract then don't sign it and move on.

 

[$$$4nothin]

contract breaking

99 times out of 100 you will not have to pay the $, but like someone else said earlier you are just burning a bridge. It is true that if you are breaking a contract you already have another job, but what happens if you blow it during training or are furloughed. Do you think your old company will say yeah sure you can come back or do you think they will say tough luck. And what will they say to any other employers that call them to ask about you. Is an extra couple of months really worth hindering the rest of your career. Maybe yes, but probably no.

 

[great cornholio]

My old company had one of those and there were some guys that skipped out and didnt pay the money. The company kind of bothered them about it for a few months, but nothing too bad and one guy even set up a payment plan. Like 5 bucks a month and stopped paying after the 1st month. Anyways they never drug these guys into court or anything like that, but from what I hear the company turned them into a collection agency so now their credit is all dicked up. Just somethin else to think about.

 

[TopGun-MAV]

a strong word of advive. some of these contrasts are enforcible. be very very careful you are working for before skipping. if turned over to a collection agency yeas they can destroy your credit. the company has nothing to loose.

just my 2 cents

 

[Country Wild]

The US Supreme Court ruled on a case a few months ago that was over a training contract. Training contracts are not enforceable due to the fact that it violates "indentured servant" status. If you are finacially and legal binded to a job that you can not leave because of this then that contract is illegal an non enforceable. This case also involved a collection agency, the collection agency is being sued now in civil court and some individuals are headed off to criminal court. Seven of the seven judges ruled against the contract.

 

[I Hate Freight]

Collection Agencies

You can fight collection agencies. You can file rebuttals to debts with the credit bureaus and force agencies/creditors to prove you actually owe the debt or it will be removed from your credit report. In the case of training contracts it is hard to say you don't owe the debt but there may very well be extenuating circumstances.

For instance, your company is sold to another and your job is drastically changing. Pay is changing, benefits changing, you're told you must relocate when you cannot and your health insurance premium is more than tripling. So you take another job in order to survive and the company demands you pay your contract. Sorry, but in this case you did not leave your job, your job left you. Do they have the right to demand the training money? You bet.

IHF

 

[icefr8dawg]

here's something to throw in the mix, a lot of operators have us doing illegal things. A free out of the contract could be arranged as a bribe in some cases. Feeling like a scumbag aside though...

 

[English]

The US Supreme Court ruled on a case a few months ago that was over a training contract. Training contracts are not enforceable due to the fact that it violates "indentured servant" status. If you are finacially and legal binded to a job that you can not leave because of this then that contract is illegal an non enforceable. This case also involved a collection agency, the collection agency is being sued now in civil court and some individuals are headed off to criminal court. Seven of the seven judges ruled against the contract.

Do you have a reference for this?

 

[bobbysamd]

Training contracts

a strong word of advive. some of these contrasts are enforcible. be very very careful you are working for before skipping. if turned over to a collection agency yeas they can destroy your credit. the company has nothing to loose.

Disguised in this illiteracy is a point. Among other things, a contract (or "contrast," if you will) must have a legal purpose, and commiting a person to training expenses is not illegal. Therefore, you should assume that the contract is enforceable.

The question then turns on how much effort a company might put forth on enforcing it. It may decide that it's not worth the expense to go after the individual who breached it. On the other hand, the individual could be sued for breach, bad faith and/or other legal theories.

One other point worth considering is your reputation. Mr. P-F-Ter notes, correctly, that a breached training contract can be turned over to collections. If you signed a training contract but have another gig lined up, it very well may be worth it to negotiate a settlement. Doing so will protect your credit, but, more importantly, protect your reputation.

 

[F70pilot]

Some of the "contracts" I have perused did not mention training per se. They were promisory (sp) notes which is a bit different.