Refunding Tuition Reimbursement Upon Resignation?

[mikedhmsu]

What is the name of your state? Live in IL, work in WI.

I want to review the validity of the contract for tuition reimbursement.

The Company will provide assistance to employees who take courses at an outside educational institution leading towards a degree, certification or license.

There are 7 points, and it is the seventh which stipulates:

"If your employment with the Company terminates, voluntarily or involuntarily, within two years after completion of a course, you must repay the Company for any amount paid for tuition and books."​

The remainder of the point states a repayment policy of 100% repayment if employment terminates within one year of completion of course; 50% if within two years. The last line is underlined and says: "...you agree that any sum due the Company upon your departure may be withheld from your last paycheck." No place does this document state what actions, if any, will be taken to recover any remaining after withholding final pay check. I would propose a repayment plan where, due to the tiered system, where by the company withholding my final paycheck and keeping my unused vacation is considered a refund of tuition reimbursement.

One of the reasons for my resignation is that when I inquired about using the knowledge gained from my reimbursed education, I was told that such an opportunity is not available. I receive an offer from another company where I will use this education plus my previous skills and training.

Since I have submitted my resignation last Friday, what legal responsibility do I have for repayment? Does the fact that the employer submitted a counteroffer, which I declined, affect this outcome? What action does the Company have to recover costs?

 

[moburkes]

You have 100% legal responsibility for repayment. Your unused vacation time does not factor into the equation.

 

[mikedhmsu]

You have 100% legal responsibility for repayment. Your unused vacation time does not factor into the equation.

Thank you for the quick feedback. I had a previous employer on the East Coast where I was provided tuition reimbursement, but the company never attempted to collect since the contract would not hold up in court. And pursuing legal action to attempt to recover would prove quite costly.

That contract was structured and worded the same as my current employer. I believe that a counteroffer was presented not so much because I am suddenly more valuable, but because the company understands it would be very costly to recruit and replace. Further, attempts to recover any balance on tuition reimbursement by legal action would quickly escalate beyond the remaining balance.

Since the contact does not explictly state the means by which any remaining balance would be collected, I fail to see how this would hold up in court.

 

[moburkes]

No contract is required to say that you will be subject to a lawsuit if it is not paid.

 

[mikedhmsu]

No contract is required to say that you will be subject to a lawsuit if it is not paid.

Are you aware if any of these cases have been tested in the courts and what the outcomes were? I am just trying to develop a more thorough understanding of past cases.

 

[mikedhmsu]

You have 100% legal responsibility for repayment. Your unused vacation time does not factor into the equation.

I noticed another post by darricksm, where they stated:

some jurisdictions have ruled that such an agreement creates a situation tantamount to involuntary servitude, and thus these contacts are not enforceable.​

I, too, am aware of such statements and am trying to determine how my situation relates.

 

[Ozark_Sophist]

I noticed another post by darricksm, where they stated:

some jurisdictions have ruled that such an agreement creates a situation tantamount to involuntary servitude, and thus these contacts are not enforceable.​

I, too, am aware of such statements and am trying to determine how my situation relates.

I don't think you situation relates. If the courses were required for you position, I can see a link to involuntary servitude. But you chose to take the course and the company was nice enough to reimburse you for the costs, provided if you leave the company, you would reimburse them.

 

[mikedhmsu]

I don't think you situation relates. If the courses were required for you position, I can see a link to involuntary servitude. But you chose to take the course and the company was nice enough to reimburse you for the costs, provided if you leave the company, you would reimburse them.

Ozark,

Thanks for the post. I'm not sure I could say definitively the courses were required for my position, but I was already enrolled in the programs when I was recruited to join this company. It was said during my interviews that the additional education was attractive to an employer. Not sure an offer would have been made by my current employer if I was not already enrolled in the courses.

By the company approving the remainder of the courses implies to me that they saw the value that could be added to my current position, as well as future positions.

 

[ecmst12]

It would be wise to consult a contract lawyer in your area before deciding to try to break this contract. If they sue you and win, it is likely that you will be required to pay their legal fees in addition to the money they paid towards your tuition.