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Apparently, some employers are requiring new employees to sign a contract that says, “We will provide training. You must work here for at least N months. If you leave before that, you will have to pay us back $XXXX for the training.

Are these contracts enforceable? Some people claim that they are a form of indentured servitude and that this is illegal in the US.

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    It would be indentured servitude if the contract required specific performance; if damages are limited to money it is just a business contract. Commented Jun 16, 2023 at 19:50

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There is a reason these are commonly called "TRAP"s (Training Repayment Agreement Provision). These agreements don't just protect the employer from paying for training that an employee can use elsewhere. These agreements frequently act to "trap" the employee in difficult employment circumstances where the employer can demand long hours and excessive dedication in difficult jobs for little pay, knowing that if the employee tries to leave, they could face a substantial financial burden.

These agreements are generally legal, provided they are executed in good faith. However, certain circumstances have been used to void the agreements.

In particular:

  • If the cost or value of the the training is vastly overstated, so the training actually provides minimal value to the employee, but has a disproportionately large repayment cost that only benefit the employer.

  • If the term of the agreement is excessively long (typically, more than 1 year). Training is unlikely to be so valuable and specialized that the employee would need years to repay the benefits. (Certain exceptions apply, such as for advanced engineering work or specialized skills like airline pilots)

  • If the "training" doesn't actually have much value; if the training is just company propaganda and policies, rather than job specific skills, repayment costs are unlikely to hold up in a dispute.

  • If the employee already has demonstrated skills before the training, then forcing them into unnecessary training just for a TRAP contract is unlikely to be supported. For example, someone with years of skilled electrical design work probably cannot be forced to repay thousands of dollars of "training" for a few weeks of basic electrical refresher courses.

Basically, if the training isn't valuable to the employee and the cost isn't reasonable for the training, the TRAP line can frequently be voided. Yet doing so almost always requires mediation or a suit, which are also expensive, time consuming, and have uncertain outcomes.

Its best for a prospective employee to call out a TRAP provision as a red flag before accepting an offer, and avoid it if at all possible unless they truly believe they'll benefit from the training, intend to stay the full term, and understand the employer might use the cost as a way to expect more from them or hold back their professional advancement.

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