Enforcing "Training Contracts"? Evidently, they are enforcible...

[FN FAL]

...so says the Nebraska Supreme Court.

http://caselaw.findlaw.com/data2/nebraskastatecases/sc/dec14/s00-221.pdf

NATURE OF CASE
Suburban Air Freight, Inc. (Suburban Air), sued Gerald J.
Aust for breach of an agreement for reimbursement of training
costs after Aust left his employment and refused to pay for pilot
training provided by Suburban Air. A jury in the county court for
Douglas County entered a verdict in favor of Suburban Air in the
amount of $2,916. On appeal, the district court affirmed, and
Aust timely appealed.

FACTS
In its amended petition, Suburban Air claimed that it suffered
$3,000 in damages when Aust left his employment with
Suburban Air and did not reimburse the company for pilot training
as required by the training agreement. Aust asserted in a
counterclaim that Suburban Air wrongfully withheld wages
from him although he continued to work for a short time after
informing Suburban Air that he planned to leave its employment.
Aust claimed he was damaged in the amount of $83 or $84
in bank charges.

Suburban Air provides air transportation for freight, and in
1996, it hired Aust as a pilot to be based in North Platte. In May,
Aust signed the first of two agreements in which Suburban Air
agreed to provide general indoctrination training and Aero
Commander 500/680 ground and flight training so that Aust
would be certified to fly the Aero Commander 680FL aircraft. A
pilot must pass oral and written examinations and an inflight
competency check for each type of aircraft flown by the pilot.

The parties agreed that the fair value of the training was $5,000.
This agreement provided that if Aust voluntarily terminated his
employment with Suburban Air at any time prior to or 1 calendar
year from the date of the agreement or if Aust’s employment
was terminated for cause, Aust would reimburse Suburban Air
for the training on a prorated schedule.

In November 1996, Aust requested a transfer to Omaha, and
he and his family moved to Omaha in February 1997 at Aust’s
expense. Aust continued to fly the Aero Commander 680FL and
began training on the Cessna 402.

On June 3, 1997, the parties entered into a second training
agreement which is the basis of this appeal. In the agreement,
Suburban Air agreed to provide training for Aust on a Cessna
402 in return for his agreement to stay in Suburban Air’s employ
for 1 year. The fair value of the training was set at $3,000. The
specifics of the second agreement varied from the original
agreement as to the deadlines and amounts of reimbursement.

Under the second agreement, if the termination occurred within 210 days of the agreement, Aust agreed to repay the entire training
cost of $3,000. If the termination occurred after 210 days or
before 240 days following the signing of the agreement, Aust
agreed to repay five-sixths of the training cost. The amount that
would be reimbursed upon early termination decreased by onesixth
of the training cost for every additional 30 days during
which termination did not occur. If the termination occurred
more than 330 days and on or before 365 days following the
signing of the agreement, Aust agreed to pay one-sixth of the
training cost. Aust was not required to repay any part of the
training cost if the termination occurred more than 365 days
from the date of the agreement.

Initially, Aust refused to sign the second training agreement,
but he eventually signed it in the presence of Louis Kuhn, Jr.,
senior line pilot and director of training for Suburban Air. In
October 1997, Aust quit his job with Suburban Air and took a
position with Silver Hawk Aviation in Lincoln, where he was
employed at the time of trial. Suburban Air sued Aust for
breach of the second agreement, seeking reimbursement of the
training costs.

On February 12, 1999, a county court jury found in favor of
Suburban Air and awarded damages in the amount of $2,916. In
addressing Aust’s motion for directed verdict or, in the alternative,
a new trial, the county court found that the evidence supported
the amount of damages and a finding of proximate cause
and substantial performance by Suburban Air. The county court
found that the purpose of the training agreement was not to
effect an assignment of wages but, instead, was to ensure that
Suburban Air would be reimbursed for its investment in Aust’s
training. The county court concluded that the provision of the
agreement alleged to be a wage assignment was severable from
the rest of the agreement and that the agreement should be
enforced even if it contained a wage assignment provision which
would not be enforced. The county court denied Aust’s motion
for directed verdict and/or a new trial.

Aust timely appealed to the district court, which found no
error appearing on the record and affirmed the judgment of the
county court. Aust timely appealed to the Nebraska Court of
Appeals, and the case was moved to this court’s docket pursuant to our authority to regulate the caseloads of this court and the
Court of Appeals.

CONCLUSION
The district court did not err in affirming the county court’s
judgment. Thus, the judgment of the district court is affirmed.

 

[English]

The law is different state by state.

 

[Crimson03]

FN FAL
Ha ha Big rock candy mountain ... I love it. It is sad we have a couple of different 'modern' versions of that song on kids cds and they have all been politcally corrected in different ways. And that the NIH supports a webpage with the lyrics geez, I don't think the dept of labor has 'Hey, coal miner' I guess you can harm yourself at work just don't be a bum.

 

[Ace-of-the-Base]

The law is different state by state.

I've heard of several states that will uphold these agreements. The bigger question is, why would a professional pilot, with a long career ahead of them, not abide by something they signed? Unless, of course, they were coerced into signing something through fraud. Back in my day, your word was gold, and if you SIGNED something, well, you understand.

I've never walked on any deal of made, even if I ended up feeling it was unfair. My company has no training contract, and two years ago we had a new pilot get typed and leave after 4 months. He had a good reason (his mother got very ill back where he was from), but it still cost the company a pretty penny. I don't know how many of those they'd take before they instituted a different policy. Again, no easy answer to that one.

Ace

 

[ksu_aviator]

These are always enforceable. Think of yourself as a contractor. You sign a contract for one year of work, if you leave then you should have to pay the penalty. It isn't even close to being slavery as some have suggested in the past.

 

[Mr. Irrelevant]

For those of you that haven't worked in other industries, I have rarely heard of a training contract anywhere else. In many other industries, training is provided that is just as costly and yet there are no training contracts. People up and leave after a short period of time in many jobs after receiving training. There are so many options for an accountant, attorney or investment analyst for example, that if they don't like the job, they leave! And they make a hell of a lot more cash than a cargo pilot. Just the cost of doing business.

Sad that this goes on. Simply taking advantage of pilots needing experience.

Mr. I.

 

[jimpilot]

At least in the New England area doctors are often asked to sign similar agreements to cover the cost of training they may be sent to (after becoming doctors, this is additional training)

 

[mjs]

For those of you that haven't worked in other industries, I have rarely heard of a training contract anywhere else. In many other industries, training is provided that is just as costly and yet there are no training contracts. People up and leave after a short period of time in many jobs after receiving training. There are so many options for an accountant, attorney or investment analyst for example, that if they don't like the job, they leave! And they make a hell of a lot more cash than a cargo pilot. Just the cost of doing business.

Sad that this goes on. Simply taking advantage of pilots needing experience.
Mr. I.

It is just like a doctor must have a medical license in the state he wants to work in or a pharmacist or a lawyer or the list could go on and on. A doctor repays his training in residency by working 100+ hours each week and making $30,000---less than minimum wage. If I go into Walgreen's and want to be a pharmacist, they are NOT going to pay for me to get the training I need along with the license. That is my responsibility. They do offer scholarships ($3,000 per year) to workers (who continue to work for them while in school) to go to school and become a pharmacist, but then that person is obligated to work for the company for 3 years after licensure. Many people enter into contracts of employment, sometimes for training and sometimes as a sign on bonus, but regardless, most contracts have a specified amount of time that must be worked or money must be paid back.

I do not see this as taking advantage of the pilot needing experience. He only had to stay a year to fulfill his contract. If a company trains you, they have the right to want to not be used and taken advantage of. They made an investment in him and only asked that he stay with them one year. They upheld their end of the agreement. He did not have to sign the agreement and his reluctance to sign it shows that he was probably planning on getting the rating and then moving on. I would imagine that the training he got helped him get the new position.

 

[Mr. Irrelevant]

Do the majors or top corporate departments require training contracts? I don't believe so although some may of course. Maybe because their jobs don't suck?? The pay and benefits are good possibly??

Doctors have to go thru residency. It's not as if the doc is saying to himself, "Hey, I'll be a resident at 30k in order to make 100k+, what a great idea I've come up with". He/She has no choice in the matter.

The only pharamacists I've known, few I'll admit, were hired out of college at d-a-m-n good $$$ with no contracts. I admit that this may go on however. Maybe someone doesn't want to sign a training contract because they don't want to be locked into a job where there isn't much to learn after the first few months and 12-18 months seems a bit excessive to them for flying a piston powered aircraft.

Just one man's opinion.

Mr. I.

 

[Corona]

At least in the New England area doctors are often asked to sign similar agreements to cover the cost of training they may be sent to (after becoming doctors, this is additional training)

There have been suits by rural communities who have sued doctors who refused to serve said communities after they paid for the doctor's school. It was quite an issue years ago.

Ironically, this company is the exact same one posting the B1900 job just a couple threads up. Co-inky-dink? I think not!

(I have no idea what my last comments meant, BTW.)

C

 

[Ace-of-the-Base]

OK folks, I'll sum up my opinion:

1. Don't sign something your going to try to get out of later.
2. If you don't want to work for a company that has contracts, don't. It doesn't mean they're a bad company, it's just the way they do business.
3. Don't put down anyone for how they run their career. They're not doing anything to hurt your future.

It's a free country folks. And BTW, pilots make more than doctors. There are a lot of people who work much longer hours than us and get paid alot less.

Ace

 

[Ty Webb]

These are always enforceable. Think of yourself as a contractor. You sign a contract for one year of work, if you leave then you should have to pay the penalty. It isn't even close to being slavery as some have suggested in the past.

You are not correct. These are NOT always enforceable. It depends on the state law where they are signed, and the way the agreement is structured.

This may come as a surprise to you, with your "mega" experience in this industry, but there are many shady operators out there . . . . some are little better than "battered Pilot shelters". Many of them make promises to pilots regarding training, maintenance, schedule, pay, and advancement that turn out to be very far from the reality.

While I have always abided by any agreement I have entered into, an agreement is a two-way street, and I have seen more employers crap on the pilots than vice versa, especially at the entry-level position, as flying freight in a twin commander or a CE402 definitely is.

Do you have any idea what the operating costs were for training in a CE402 in 1996, when this poor slob signed this agreement? Probably less than $200./hour. How many hours do you think they gave him in the airplane? 10? How many of them were empty legs, or post-maintenance inspection flights? How much do you think the training was really worth? Maybe $2,000. tops?

Any chance they told him the (unpaid) training would take a week or two, during which time he would be spending his own time studying and waiting around for someone to be available to train him, but ended up spending a month waiting (unpaid) and on his own dime? That would be pretty common. What about HIS time, HIS expectations of being treated fairly? What is that worth?

Now, I don't know anything about the operator named in this lawsuit, nor the pilot, but in many cases, companies that have to rely on training contracts have abnormally high turnover because they aren't taking care of their employees, and for you to blindly state that "these agreements are always enforceable" is not only incorrect, but also naive and insulting to your fellow pilots.

Sheesh!

 

[qmaster3]

thanks for the insight guys. Any employer outside of Uncle Sam who puts a contract in my face will have it respectfully shoved up their a$$

 

[User546]

OK folks, I'll sum up my opinion:
3. Don't put down anyone for how they run their career. They're not doing anything to hurt your future.

Not according to Gulfstream 2000, he'll sure delight in telling you different!

 

[midlifeflyer]

In many other industries, training is provided that is just as costly and yet there are no training contracts.

Name a few. I've never heard of a hospital that paid for someone's medical school or a law firm that paid for someone to go to law school (unless they person has already been with them for years.)

You mentioned "big corporations" that pay for training? Sure. For training that helps them do their current job better. Not for the training that provides them the basic skills to do their job to being with.

 

[midlifeflyer]

You are not correct. These are NOT always enforceable. It depends on the state law where they are signed, and the way the agreement is structured.

Well, my educated guess is that they are usually enforceable. "The way the agreement is structured" is a precondition to whether =any= contract is enforceable.

There may be one or two, but I'm not aware of a state in which a contract of the type being discussed is, for example, void for illegality or unenforceable as being against public policy.

 

[Khirsah]

Your analogy is flawed, midlifeflyer.

I wouldn't expect to walk into a company with my private and have them pay to train me up to legal levels. Just as a person shouldn't expect to walk into a hospital and ask to get hired as a surgeon without going through medical school.

If I were to be hired at a company that operated a certain aircraft I've never flown before and I had 2000/200, I should rightly expect that they would train me on their own equipment at their own cost. Just as if a surgeon were hired at a hospital that performed procedures with specialized equipment that required additional training, he or she should (and would) expect that the hospital would train him on their equipment at their own cost.

Now, both the company and the hospital would be perfectly justified in saying, "We need someone with experience on such and such equipment," while turning down employment. Once they hire you, however, it should be (and in most other industries IS) their responsibility to train you up to their standards.

 

[midlifeflyer]

Maybe. There's training and there's training.

Then there's industry common practice and some of the reasons for it. I picture many 135 operators as being fairly small with budgets that can't absorb a constant flow of people who are understandably interested in receiving the experience they need for the next steppingstone for their careers and then moving on to something better.

The contract comes down to: "Potential employee, I know that this is just a stop on your planned career. We are wiling to train you, but in exchange we'd like you to commit to us for X years. If you leave before then, we'd like to recoup some portion of the training fees that we'll have to spend again."

Whether one thinks it's unfair pretty much depend on the specific terms and one's perspective. I don't think that the 1-year in the Nebraska case was particularly unfair to anyone.

 

[Ty Webb]

Well, my educated guess is that they are usually enforceable. "The way the agreement is structured" is a precondition to whether =any= contract is enforceable.

Your "edumacated guess" contradicts my direct observation.

The "enforceable" agreements are usually structured as a "loan", in other words, as a promissory note.

Otherwise, you start getting into "indentured servitude" issues. What if, for example, a company promises you that you will fly 90 hours a month and be paid $20./hr, or $1800./month. Then, the flying dries up somewhat, and now you are only able to fly 65 hours a month, or $1300. Are you still obligated to stick around, even though you have budgeted your family around the $1800. you were promised? What if they cut your flying back to 20 hours a month, and now you are making $400./month. Are you still obligated to remian there for a year? Well, where do you draw the line?

PArt 135 piston training is not that expensive. It is not like sending a guy to FSI for 3 weeks to get a G-V type. An employer has to make a decision . . . either treat pilots well enough that they stick around for a while, or pay for more training events . . . . it's not rocket science, and most companies manage to do it without a training contract.

One of the problems with this industry is the number of operators trying to do things on a shoestring budget, and another is pilots who are willing to work for next to nothing . . . . .

 

[bobbysamd]

Training contract enforceability

Well, my educated guess is that they are usually enforceable. "The way the agreement is structured" is a precondition to whether =any= contract is enforceable.

There may be one or two, but I'm not aware of a state in which a contract of the type being discussed is, for example, void for illegality or unenforceable as being against public policy.

I second midlife. Unless a contract is for an illegal purpose, there is no reason not to believe that it cannot be enforced or set aside. Training contracts are not for an illegal purpose.

Whether a company opts to enforce a training contract is another matter, but assume that if you breach the contract that it will be enforced.