Training Contracts More Common For pilots, there’s no question that training is expensive. Common estimates of the cost to obtain a commercial pilot license are $80,000 to $100,000. Pilots looking for a job with an operator likely already have a commercial license, if not an airline transport pilot (ATP) license, but they also can expect to need a new type rating. Typically, the operator will pay for the necessary type training, which can amount to $10,000 or considerably more, depending on the aircraft (and the operator may also pay for other recurring require- ments). Understandably, the company doesn’t want to see that investment walk out the door to a competitor. Pilot training contracts are not new but do appear to


have become more common in the industry in recent years, possibly because pilots are in demand and thus more likely to switch jobs instead of working their way up a seniority ladder. Nor are such agreements unique to aviation. A 2020 survey by the Cornell Survey Research Institute found that nearly 10% of American workers were covered by a training repayment agreement. Te US Federal Trade Commission (FTC) recently


■ Are there escape clauses in the agreement? For example, if a pilot is terminated or laid off by the operator, does the repayment obligation remain in effect?


■ Does the contract address how disputes over the contract will be handled? For example, if the operator sues a pilot and wins, does the contract provide that the pilot pay the operator’s legal fees? Generally, it may be advisable to seek out an attorney


Pilot training contracts have become more common, possibly because pilots are in demand and thus more likely to switch jobs instead of working their way up a seniority ladder.


who has experience with employment contracts before signing on the dotted line since some of these issues may not be straightforward, even to a legal professional. For example, since the terms of state contracts are typically governed by state, not federal law—and state laws can vary significantly—it may matter which state’s law a contract specifies will govern its interpretation. Te law specified in the contract may not be the same as the state in which the pilot will be based or even the state in which the operator is headquartered. A further issue that


may justify seeking legal advice is exactly how a contract’s reimbursement


expressed concern about the impact of restrictive employ- ment agreements, including reimbursement conditions. Earlier this year, the FTC proposed prohibiting a number of anticompetitive practices in employee contracts, including repayment provisions that are not “reasonably related” to the underlying training costs. But there is no deadline for the FTC to actually adopt a new set of requirements, and it also is not clear what “reasonably related” would mean in practice. In this article, I’ll be describing current employ- ment contract law.


Each Contract Is Unique Tere’s an old saying in aviation: “if you’ve seen one airport, you’ve seen one airport” (meaning, each is unique and must be individually understood). Te same is true for contracts; you should carefully review each one on its own merits. When considering the implications of a training contract,


some of the important factors to check include: ■ What is the required reimbursement? Is it a fixed amount,


or can it increase, for example, if the operator provides additional pilot training at a later date?


■ How long does the requirement remain in effect? Does the amount due remain the same, or does it decrease on a pro rata basis over time?


clause is structured. Historically, the enforcement of a training contract typically has required an employer to go to court, where the employer might have an advantage over an employee but still would have to devote time, effort, and money to proving its case. But it is becoming increasingly common for training contracts to incorporate a promissory note—essentially a financial agreement between the operator and pilot, similar to a bank loan. Tis type of arrangement is much easier for the operator to enforce, making it much harder for the employee to avoid repaying the funds. Another circumstance when it is advisable to seek expert


assistance is when, after joining an operator, a pilot believes it necessary to resign—not because a better job has become available but because of circumstances such as unsafe working conditions or discrimination based on race, sex, or other protected characteristics. Te law usually recognizes the concept of “constructive termination”—that is, when an employee is effectively forced to resign—and in these circumstances does not consider the resignation to be a breach of the employment contract. But it also is important to ensure that any decision to resign for those reasons is properly handled to best manage the reimbursement issue, among other matters. One further question to consider—although unfortunately


not easy to answer—is whether the operator may be a “paper tiger.” Just because a contract states that the company can


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