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Employers invest significant amounts of time and money in specialized training for prospective and existing employees. When the employee uses their newly acquired knowledge, skill, or credentials for the benefit of the company, the in-vestment pays off. But, if the employee leaves shortly after the training, or never joins the company, the investment is lost. This article provides some insight and suggestions that will help employers avoid losing the value of their investment in specialized training. It is written assuming that the training provided is a program that will allow students to become a properly licensed, certified, and approved school bus driver in Pennsylvania – hopefully working for you!

What is the Employer’s Basis of Recovery?

A court will only award damages based on either a tort (a civil wrong resulting in damages), a contract (offer, acceptance, consideration), or some statute or case law. While it may feel “unfair” that the student/employee you trained goes to work for someone else right after your CDL training, a court will not award damages without a recognized cause of action. “Unfairness” by itself is not a recognized cause of action. Generally, the training provider will only recover damages if the training provider can prove that the student breached an agreement to pay for the training services received. However, this is where most recovery attempts fail.

Frequently, there is either no agreement with the employee/student or only an informal oral agreement regarding what happens if the employee/student does not work for the employer who provided the training. As you know, the terms of oral agreements are always very difficult to prove. After a dispute arises, each party usually has a different recollection of exactly what was agreed to. Informal written agreements such as an e-mail or an unsigned document ex-plaining the terms are only margin-ally better. Often after a dispute arises, the parties quibble over what documents they did or did not receive, what documents are included in the “agreement”, and how the agreement may have been modified by oral statements or by other documents, e-mails, letters, notes, or communications. So, you need a written training agreement. But, what should it say?

Training Agreements

Since a credentialed school bus driver would not need CDL training, let’s assume we are talking about prehire CDL training for a potential employee. Ideally, the student will not be “hired” until after CDL training is successfully completed. While you may be able to create a probationary employment period that will cover the training time, that process can be complicated and is subject to many local, state, and federal employment laws and regulations.

Delaying hiring until after the successful completion of training will not prevent you from “paying” the student/potential employee during training if desired. But, the payment should be documented as a loan that will be forgiven upon successful completion of the training program or ideally, after some successful period of employment (one year?).

Your training agreement will need to have all of the elements of a contract – offer, acceptance, and consideration. It should also be in writing and be signed by all parties before training begins in order to document the offer and acceptance. Ideally, there will also be some fee paid by the student which is the consideration element of the contract. Even a small “registration fee” would be sufficient to establish consideration in the eyes of the law. While the student will not actually be paying for the training, you will want to be sure the training agreement sets a specific figure as the value of the training. That figure can then be used as a liquidated damages amount that would be owed if the student breaches the agreement to work for you for some period of time after CDL training is completed. But, what should the liquidated damages amount be?

What is the Value of the Training Provided?

Generally, an employer who provides training is expecting that the employee will work for them using their new found skills and credentials for many, many years and that the financial benefit received by the company over the course of many years will far outweigh the cost of the actual time and expense of hosting a training class for a period of days or weeks and the  cost of paying for testing fees and related expenses. However, a court would consider the anticipated” value over the course of years to be too speculative and would not normally award damages calculated in that manner. Instead, the court would look at either the actual cost of the service provided or the fair market value.

The actual cost would be simple “expense reimbursement”, that is, the cost of the instructor’s time, room rental (if any), training materials, testing fees, and perhaps food and beverages provided to students. The fair market value would be what a willing buyer would pay for the services received. This could be established by a survey of readily available pricing from local commercial driving schools or by placing a reasonable markup on your actual costs, as long as the resulting price is in line with the price generally available for similar services provided by others.

What Should a Contractor Do?

Contractors should make great efforts to assure that they secure written training agreements that define the expectations of the parties and define the costs that will be charged if the student does not complete the training program or if the student does not work for the  sponsoring employer for some period of time after CDL training. Ideally, the sponsoring employer will also charge a registration fee that will confirm the existence of a valid contract for repayment of training costs. There are many contract variations that will work. But, your agreement should be right for the needs of your organization. We are available if you have  questions or if you need help.

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