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Member Benefit

The Problem With Training Repayment Agreements

Published Mon Oct 16 2023

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Training Repayment Agreements (TRAs) and their increasing prevalence in employment contracts could create problems. TRAs require employees to repay the cost of training if they leave their jobs before a certain period. These agreements have become common in various industries, including nursing, trucking, and healthcare. Employees have been sued by their former employers for allegedly owing substantial amounts due to TRA violations. One example involves a physician assistant who was asked to repay more than $138,000, comprising $38,000 for training costs and more than $100,000 for supposed “loss of business” incurred by the employer. TRAs are often presented as take-it-or-leave-it provisions during the hiring process. Regulators and the Biden administration have started taking action against TRAs’ legality, with proposed rules to ban most non-compete clauses, including certain TRAs. Some states, like Connecticut and Colorado, have already banned or limited TRAs. Critics argue that some companies use TRAs not to recover training costs but to discourage employees from leaving within the first few years of employment. There are also ongoing lawsuits in various industries where employees are being pursued for TRA violations.

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