Is this Employment contract legal?

[ThomasR]

Opt for a jury trial.

 

[RichardFitzwell]

What if a company has employed the pilot for a year and now the employer wants a contract? Would that change the enforceability of the contract?

I have worked for my current employer for a year now. They recently purchased a jet and now want me to sign an 18-month employment contract for training costs. The contract is reduced by 1/18th for every month I stay. The cost of the recurrent will be rolled into the total contract amount at the 12-month mark. Recurrent will increase the amount I owe if I should leave at say 13 months.



I am the only full time pilot currently and feel like I have no choice but to sign this bullsh!t contract. This company makes other employees sign employment contracts as well. They have sued three former employees so far. Two settled for half the amount owed and the third got his new employer to payoff the contract.



Any advice? Thanks.

 

[Publishers]

position

There are a number of factors at play here. They bought a jet so I assume that this may be an opportunity for you to get type rated.

What that also tells me is that you are not qualified to work there if what you were flying is now gone. Is that correct?

The fact seems to be that you did not neet this kind of trainng before and hence did not have an existing contract.

Your position is difficult because of all the reasons discussed on this thread. On the other hand, if it is a type rating, and, you want the job, why would you be so reluctant. Your market value will go up and they want protection that if they pay the money, you will not type rate and skip.

Do what you think is right. If you want the type and to leave, then do not do it.

 

[TonyC]

I have worked for my current employer for a year now. They recently purchased a jet and now want me to sign an 18-month employment contract for training costs. The contract is reduced by 1/18th for every month I stay. The cost of the recurrent will be rolled into the total contract amount at the 12-month mark. Recurrent will increase the amount I owe if I should leave at say 13 months.

I'm wondering what would happen if you accepted the initial training with the 18-month contract, but then declined to pay for your own recurrent training.

It seems to me that recurrent training is a cost of doing business, and it will always be incurred unless there is turnover... and a training contract is supposed to reduce turnover?

I'm confused.

 

[midlifeflyer]

What if a company has employed the pilot for a year and now the employer wants a contract? Would that change the enforceability of the contract? I have worked for my current employer for a year now. They recently purchased a jet and now want me to sign an 18-month employment contract for training costs. The contract is reduced by 1/18th for every month I stay. The cost of the recurrent will be rolled into the total contract amount at the 12-month mark. Recurrent will increase the amount I owe if I should leave at say 13 months. I am the only full time pilot currently and feel like I have no choice but to sign this bullsh!t contract. This company makes other employees sign employment contracts as well. They have sued three former employees so far. Two settled for half the amount owed and the third got his new employer to payoff the contract. Any advice? Thanks.

Like most other questions of this type, the answer is "maybe."

In the absence of an agreement, employment in most states is what is called "at will." That means that either the employer or the employee can call it quits at any time.

One of the results of the "at will" doctrine is that many state courts will enforce a change in the terms of employment on the theory that the employer could tell you to just leave. The new terms are in exchange for your continued employment. It's the reverse of you saying that you want a raise or you'll leave.

Is it a reasonable contract? Well, if you look at it from the employer's side for a moment, how much would you say it costs to train someone in that airplane to PIC quality? Now suppose every single pilot left as soon as they reached that stage of competence?

As others have said throughout the thread, at bottom there is nothing wrong with a company recouping it's training costs by requiring that you reimburse it in part if you leave early.

BTW does it say that you only have to pay them back if you leave or are fired for cause, or do you also have to pay them back if you are simply laid off?

 

[Publishers]

Tony

Tony

This is not jsut a case of recurrent if I am reading him correctly. It is a new aircraft type.

 

[flyifrvfr]

There are a number of factors at play here. They bought a jet so I assume that this may be an opportunity for you to get type rated.

What that also tells me is that you are not qualified to work there if what you were flying is now gone. Is that correct?


If you look at the guys profile, it indicates he has 6500 hours and has flown heavy iron. Going by the profile, I would say hour wise, he is qualified to fly there.

 

[Publishers]

reading

Was not trying to question that but it sounded like they had not had a jet before. That is why I framed the question about the type rating.

There was no statement that this was recurrent so I was asking if the aircraft he had been flying was a piston twin or say a King Air 90, was he rated in what he would now be flying.

This is a question that comes up often. Not in this case but in others, pilots have talked the boss into a bigger aircraft. The problem is that then the insurance company says that he is not qualified to fly it (sometimes even if he gets a type). He is then terminated. Is that fair?

The type question goes to the training being offered adding to his value and being something he will take with him. If it is, then he has to make a decision. The job he was supposed to do is gone along with the King Air. In effect, he is being offered a new job for which the company is willing to invest in him if he states he will stay or pay them back. A fair proposal, a decision to be made.

Forgetting that he already was working there, how many would take the deal if you were offered it?

 

[TonyC]

Tony

This is not jsut a case of recurrent if I am reading him correctly. It is a new aircraft type.

He said the cost of recurrent would be rolled into his obligation at the 13-month point. That sounds like recurrent training 1 year after the Initial Training.

The cost of the recurrent will be rolled into the total contract amount at the 12-month mark. Recurrent will increase the amount I owe if I should leave at say 13 months.

There was no statement that this was recurrent ...

Read more carefully. I've quoted the pertinent sentences above.

 

[RichardFitzwell]

Maybe I should have made myself clearer.

The turboprop I was hired to fly is still here. They are adding a jet, which requires a type rating. I will now be flying the turboprop, the jet and doing office work when not in the air. I have several other type ratings and I am qualified to fly this aircraft as PIC for the insurance company and our Ops Manual.

One thing that appealed to me about this job was there was no training contract in the beginning. The turboprop initial training was very inexpensive as I had a lot of time in the same model with another company.

Not flying the jet is not an option. I am expected to go to jet training very soon. I am also expected to sign a contract for the type rating (which I really don't care if I have or not). The contract outlines the terms, which clearly state the recurrent training (an FAA requirement at the 12 month mark) will be added to the contract amount once completed. My problem is with the 18-month contract term and recurrent being added later. To me, like T.C. said, recurrent is the cost of doing business. I can understand a 6 or even a 12-month contract to “recoup” costly training, but not 18 with recurrent added.

It seems to me that because I took the job to fly the turboprop, and have done so for a year, it should be clear I had no intentions to get training just for the experience and then leave. That still isn't my intention but I am furloughed from the airlines and I had this crazy idea they might recall one day. Then again, they may not. Who knows?

Mark, it doesn't address a lay-off.

Is this contract enforceable?

 

[Publishers]

Ok

Now you have cleared up the missing points.

1. There should definitely be a clause dealing with termination or layoff which absolves any obligation that you would have.

2. I am much more empathetic to the type situation than the recurrent part of the contract.

3. Your airline situation is probably part of this and sure is from their point of view. That experience level is why you do not really care about the type as is the airline part.


4. While not sympathtic to the recurrent, both do have some outside value, one much less than the other.

I think it really boils down to how you feel about the job and the people you work with.

 

[TonyC]

If I couldn't avoid the Training contract altogether, I'd push to have the Initial Training Contract amortized over 6 months instead of 18, and I would refuse to pay for my own Recurrent. Pretty soon they'll be having you pay for the gas because it's the landing that keeps YOU current, and the landing fees because it's YOU that needs the ILS, not the company.


Otherwise, the scheme you've described could keep you owing them forever. Everytime you go to reccurent, you incur another debt. That sounds like indentured servitude to me.

 

[Publishers]

unique

the airline part of this makes it unique in business. Where else do you have a bunch of professionals laid off in substantial numbers who then get professional jobs where they almost all say they will go back when called.

Not many like that I know of. "Look Mr. Employer, I know it is going to cost you $ to keep me typed and trained, but, do not worry I am leaving if called back and do not really want this job.

 

[RichardFitzwell]

the airline part of this makes it unique in business. Where else do you have a bunch of professionals laid off in substantial numbers who then get professional jobs where they almost all say they will go back when called.

Not many like that I know of. "Look Mr. Employer, I know it is going to cost you $ to keep me typed and trained, but, do not worry I am leaving if called back and do not really want this job.

It’s really no different. I know many pilots (professionals) looking to make more money, fly bigger equipment, and advance somehow. I have been furloughed for three years now. The difference for me is I am only waiting for one airline. You maybe waiting for ANY airline. What's the difference?



Publishers, if you were offered your dream flying job tomorrow, would you go or would you stay where you are because your current employer has spent money to train you for the job you are currently doing? Be honest. My wife works in insurance. Her company just switched over to new software and she spent a week learning the new system. I'm sure this cost her company money. Should she have to sign a training contract now? She doesn't.



Pilots are trained to make money for their employers. I agree pilots should stay long enough for the employer to get their training cost back but how long is that? Like I said, 6-12 months is reasonable. Paying for recurrent is not.

 

[Publishers]

VAlid Question

That is a valid question but not related to the situation to which I referred where you are already there, let go, and fully state you will go back.

In the case you propose, first I would not have taken the job had I thought a better or dream job was just around the corner. Secondly, maybe I am different, but I would feel pretty bad if I had the company invest in me and left.

As I pointed out, this industry is unique. Pilots by their nature are just not very loyal kind of professionals -- at least until they are flying 747's or some large jet. It is one reason they often do not fit well into companies culture as in corporate flight departments. Not saying this is terrible, just different. I suppose that it may be a situation where the company may never need a bigger quicker faster aircraft yet that is the objective of the pilot. Therefore they are not headed in the same direction.

 

[Jedi_Cheese]

Publishers, I would agree that having a contract for repayment of the initial type (or first recurrent session) if you leave before X time is a fair contract. Getting stuck with penalties after every recurrent isn't fair for the pilots (like life has to be fair...).

Recurrent training is the companies responsibility because you are looking to (essentially) sign on again. After the initial 12 months (or whatever time frame the training contract is for), both you and the company owe each other nothing BUT you now have an extra 800 hours and a new type to add to your resume (and for the amount pilots bitch about having to keep finding jobs, there are jobs out there if you are willing to look). What can the company offer you to keep you around?

 

[Publishers]

equipment

Without the contract, the next company can afford to pay more as you already have the experience and type/

If you have good people, others will always be trying to hire them away. That is a given. The problem in aviation is the constancy of retraining or typing individuals. In a way, none of these things have permanent value to the aircraft owner. With the escalation of training costs, I am not sure you could benefit with anything less than indentured servitude.

Now do not write next about safety and training benefits operation, that is not the point. When type training costs $20k or more --just look into the future and see where these costs are going to go.

 

[RichardFitzwell]

In the case you propose, first I would not have taken the job had I thought a better or dream job was just around the corner.

If you can tell me when (if) the airlines will recall, you are a lot smarter than me. A couple bad decisions by airline execs or another attack on U.S. soil and I am quite certain the airline that furloughed me will never recall. Should I never be compensated for flying again because I'd like to return to the airlines?



As for you feeling bad for leaving a company that has spent money on you, I hope you love your current job and plan on retiring from it. I guarantee they have spent money on you.

 

[midlifeflyer]

Mark, it doesn't address a lay-off.

Is this contract enforceable?

Still can't give you more than an "it depends".

Frankly, like others I think that recouping recurrent training requirements is unfair. It may be reasonable to recoup a training outlay if someone leaves before or just when they are starting to become productive, but maintaining currency requirements of a flight staff seems to me to be a cost of business that should be picked up by the company.

And I have a little trouble with the lay off situation. Recouping your training costs when you are perfectly willing to do the job and stay, but doing that if they let you go without fault is something I would definitely try to negotiate away.

Unfortunately, what you or I think is "fair" has nothing to do with whether it's enforceable.

Sounds like the opportunity is one that you don't just want to "walk away" from. Faced with being asked to sign the contract, I'd find it worth my while to sit down with a lawyer to review it. Notice that some of my comments are geared toward very specific parts of the agreement, like whether there is a difference between whether you or they are the party that "quits". That's the kind of detail that =your= lawyer would go into - to explain what some of this stuff means in varous contexts - and add her knowledge of state law, local practice, and maybe even the industry (if she's an aviation business lawyer) to figure out where the contract may and can be negotiated so that it becomes a little less slanted to one side.

You never know. There may even be an incentive to the company to negotiate with you. For example, if you are the only squeaky wheel and they make concessions, it actually could strengthen their position with the others who just sign (some evidence that it =wasn't= just a "take-it-or-leave-it" contract).

 

[Publishers]

Not saying that

Really just saying that this industry has some unusual situations.

Should you be deprived because of it --No, but it helps understand why companies are leary of airline pilots from major carriers.

When I recently looked at some potential pilots, we did make the best assessment we could as to when they would be recalled before we offered them anything. First guys out the door being likely the last recalled.

 

[legaleagle]

Two cents of legal expertise.

This may be the most classic Bar Exam question and scenario in Contract Law.


Two cents:

For what it's worth, unlike Cynic, who I agree with to some degree, I did go to law school, and am taking the California Bar in 20 days with a desire to work for you all and defend you guys. I am not perfect, but here is my off the cuff assessment. Biggest problem with this K, is that it was not negotiated and it is not supported by consideration. It was offered too late in the Bargain (employment), the terms within which were not bargained for. It could be argued that it was signed under duress, and the terms are perhaps unconsionable (legal term of art) because the pilot had moved, spent money, and relied on K, and had performed under the prior contract. He was forced to sign, and he likely feared that his livelihood was at stake.

Furthermore, every agreement needs some consideration. There is no new consideration to support the new training contract, thus it is void ab initio, or from the beginning. Had it been presented at the beginning, it would likely be valid, as long as it is not construed as a penalty. The courts will not uphold liquidation damages clauses, (clauses that specify damages in the case of a future breach), if it appears that it is not tied to reasonable costs anticipated were a breach to occur. If the damages appear to "penalize" the pilot, again, reasonable damages may be awarded, but not the entire amount, or the clause will be struck by the court in its entirety.

As for the lack of consideration, the pilot had a preexisting duty to work, and the company had a preexisting duty to pay a salary under the first express or implied agreement. The pilot cannot promise to do under the 2nd K, exactly what he is already legally obligated to do under the 1st K, in return for additional burdens. This fails the test for consideration. He would have to agree to do something else, like fly extra time, take a new uniform, etc. In order for it to be valid, he needs to merely promise to do something else that he is not already obligated to do under the 1st K. Thus both parties experience a detriment or a benefit in return for their promise or performance in the 1st K. When the pilot signed the 2nd contract and promised to pay them back, he is suffering a further detriment, but the company is not gaining or losing anything additional in return for that promise. The pilot already had a duty to fly for the company. If he fails to fly, he loses his salary and will be fired. That breach would solve the first contract. But, to incur further losses, for the time that he has already flown, as well as future time, would not stand up. He could be liable for costs from that point on (but he won't because the 2nd contract was void the instant it was signed), but we are then thrown back to the original problem, that he has promised to fly, the co has promised to pay. By signing the 2nd contract, he has to fly, and the co has to pay, but the company has not promised to do anything additional for him, when the pilot took on the additional burden. Thus, there has been no consideration to support the 2nd K.
I intend on practicing aviation law, either for all of my practice, or some, depending on if I can make a living doing just the former. If I pass the California Bar in July, I look forward to representing you guys for reasonable fees and providing defense to ridiculous tort claims that I see, like the Carnahan case. Hope to work with you all in the future. Happy Flying!

CB

 

[BLUE_MAX]

Legeleagle, you sure do have the lingo down as a lawyer. You should go far!

 

[legaleagle]

Thanks BlueMax, hopefully I can put it in the proper order to that I can earn a buck...

 

[midlifeflyer]

Furthermore, every agreement needs some consideration. There is no new consideration to support the new training contract, thus it is void ab initio, or from the beginning.

Do some more studying. Take a look at the numerous cases that deal with restrictive covenants (non-competes) in employment contracts. Look at states which don't frown on them altogether (California is one of a small group of states that almost always find employment restructions improper). You'll discover that in most states, when we start with an at-will situation, continued employment supplies the consideration when these covenants are imposed or changed after employment has started.

The theory is pretty straight forward. There no question that in the absence of an existing employment contract for a specific term, we have employment at will. So it all boils down to

Company: We're getting a jet. We need all our pilots to be trained in jets. Since you're not trained, I'm sorry but we'll have to let you go.

Pilot: Is there a way I can stay on?

Company: Well, we're wiling to advance the cost of your training, but if you leave before X months, we'll need you to pay it back.

Pilot: Okay.

Pretty basic stuff. And it doesn't have to be that explicit. And remember your Hamer v Sidway - consideration doesn't have to flow from one party to the other anyway. A "legal detriment" suffices. So we have two distinct things supporting consideration here: (1) the pilot keeps the job (a benefit) and (2) the company doesn't fire the pilot (something it's not legally obligated to do)

BTW,

Q: what do you call a lawyer with an IQ under 100?

A: Your Honor

In other words, drop the Latin except in law school tests and cocktail parties. Most judges don't understand it anyway.

Good luck with the Bar exam. That was sincere, not sarcastic.

 

[legaleagle]

Mark,

I agree with you on two points. I assumed that there was an employment contract, but in fact it does appear that it is at will, and I further agree that your hypo introduces a change of circumstances, that is further consideration, as you suggest, and will support the new training contract. However, in your hypo, the situation has changed due to an external circumstance, a factual impossibility that impairs performance, that neither party could foresee or control, and consequently requires both parties to make adjustments, and agree on them, in order to continue onward in the relationship. Going forward, there will only be a jet flown with the company, and no more props, for example. But, this terminates the prior agreement, and requires both to renegotiate. In the current post however, the pilot is being asked to do the same thing before and after, he has not agreed to do anything differently, except suffer additional detriment, but only at the prospect of being fired. If he were allowed to continue in a similar role not requiring training, or in a perfect world, not take the job in the first place (if the training contract were offered at hiring as it should have been), he would have free will, the basis for contracts, and the contract would be valid. The pilot in this post, is being asked to promise that he will do something further, based on past performance, training that he has already recieved. Past performance is not valid consideration. In your situation, the obligations have changed as per a new set of circumstances, after the original agreement, sufficient enough for you to argue that positions have been changed in reliance, hence they both suffer a legal detriment. The pilot is being asked to do something different, fly another jet, or pay back his costs.

Furthermore, aside from the consideration argument, I would argue that the real contract in the post is void, if it is not delivered at a time concurrent to the initial hiring (whether non-compete, or other condition that employment is subject to), and that means usually within days of signing on with the company, if not sooner. That seems to be supported in a majority of states. And finally, I would still assert that this employee had significantly performed in reliance of the original agreeement (that did not require the detriment in the form of reimbursal), and it is likely that he did not freely bargain for the second agreement, hence he signed under duress. He may have been worried that despite good performance with the company, and good standing, his job will be in jeapordy if he does not sign it, hence the only reason that he would sign, is to preserve his job. The failure to sign the agreement is a valid reason for not continuing the hiring process, but not for firing an at will employee, who is otherwise performing congruent to the arrangements at the time of hiring. I fully believe that my argument would suffice, even in light of an at-will arrangement.

To offer a contrary hypo to explain, Scientist X is regularly working in an at-will environment, on projects that don't require a confidentiality agreement. X's boss comes in and says, we are starting work on a new project (that he has never worked on before), and if you choose to partake in it, we must have you sign a confidentiality agreement. If the employee says, I don't want to, the company will keep him on the existing projects, or fire him, but it is likely that they would not have offered him a new project if he were truly a poor employee worthy of firing. So, he can stay, but, remember, he has made the decision prior to the new performance. If this Part 135 training agreement were offered before the training, but the pilot were allowed to continue in a flying role that did not require the new training should he elect not to sign the contract, I think it would be upheld as a valid contract. Otherwise, I would argue that the pilot, if fired, were entitled to at least damages shown in reliance with the first agreement. Back wages, moving expenses (if employment had just started), etc.

So, as I said before, no one is really right, until the trier of fact decides, but I definately think, on the limited facts, that he has a case. Problem is, I don't know all the facts yet. So, this is all conjecture.

CB

 

[legaleagle]

Mark, I noticed your site.

I am in Boston. Heading to L.A. in 14 days. Did you ever fly out of Bedford? I noticed that you were from New England. Did you practice in MA?

 

[bobbysamd]

California bar

I intend on practicing aviation law, either for all of my practice, or some, depending on if I can make a living doing just the former. If I pass the California Bar in July, I look forward to representing you guys for reasonable fees and providing defense to ridiculous tort claims that I see, like the Carnahan case. Hope to work with you all in the future. Happy Flying!

Good luck with the California bar exam. It is a SOB. I had a friend who passed it on the first shot - remarkable, especially considering his law school was not ABA-accredited.

I hope your defense practice would not include insurance defense. From my side of the street, we see insurance companies as evildoers who hammer ordinary people for no reason, who do not deal with people in good faith until they are forced into expensive and time-consuming litigation. Defending pilots from the helpful FAA would be a real service to the community.

Interesting discussion on contract theory.

 

[midlifeflyer]

I am in Boston. Heading to L.A. in 14 days. Did you ever fly out of Bedford? I noticed that you were from New England. Did you practice in MA?

I learned how to fly at 7B2 in Northampton. I practiced in the Springfield area. Litigation - mostly business and criminal defense (with a few very interesting cases of other types, like when my client sued the Mass parole board after she was attacked by a parolee). Went in-house when I moved to Colorado.

Bobby brings up a very good point. Remember that if you are going to defend Cessna against those claims, you =will= be doing insurance defense work. And for every Carnahan story (you, of course, did look at what the evidence was before reaching your conclusion that the claim was ridiculous? I didn't, so have no opinion on it) there are plenty equally outrageous stories about some little guy who is not a multi-billion dollar corporation getting screwed over.

BTW, if you are looking into aviation law, have you looked at the Lawyer Pilots Bar Association (www.lpba.org) or the NTSB Bar Association (www.ntsbbar.org)? I'm a member of the LPBS and it's a really great bunch of folks.

 

[legaleagle]

Mark,

Yeah, I agree on the LPBA and NTSB Bar. I am a member of both, as well as the NBAA. Could do with a little less social emphasis on the legal orgs, and more substance, so that I can learn more from their newsletters, etc. But, that's the way it goes. As for the Carnahan trial, I don't know all the specifics, but it seems like they sued everyone, and then let them explain their way out of it, because, as it seems apparent, they could not pin down the exact cause of the accident, as NTSB conclusions (pump failure was not the cause) are inadmissable at trial. Furthermore, they got away with getting 20 prior pump failures over the past couple of decades in, as evidence that there was a propensity of failures. As a trial attorney, you should see the problem in that. It seems that this would be evidence that goes to propensity, which should be inadmissable or, in the alternative, inadmissable under 403 as more prejudicial than probative. But, apparently, it was a highly contested issue at trial. Either way, it sounds like the gyro was the problem, not the pump. But, that's the way it goes. The legal truth is up ot the trier of fact. Only way to get around it now, is to appeal claiming the admission of the pump failures was an error on the part of the judge.

As for defense work, if I have the luxury of deefending who I want, which will likely not be possible, I would simply like to defend the person that is on the other side of a claim that seems way out of wack from a damages perspctive. If a person has been truly wronged, or hurt, than they are entitled to damages. As much as I am entrepreneurial, and want to make money, I happen to believe that a lot of litigation these days is way out of whack in terms of damages. That is my main problem with the Carnahan case, as well as the fact that the prior pump failures should not have come in. But, oh well. The same goes for a pilot. Many do deserve to have their sanctions reduced even in light of a violation that they commit. The FAA goes for the heaviest sanction avialable under sanction guidance, like many prosecutors in a criminal trial, to get something to stick.

Oh well, alright off to study some more per stirpes and easements appurtenant! Mark, do you work for an aviation corp in hours? Don't have to say which one.

 

[legaleagle]

BTW, to save the comments, I do know how stupidly idealistic the idea is that I am going to save the world from excessive damage awards in litigation.