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Abstract
Agreements requiring employees to repay training costs to their employers, if they separate from employment before a specified period, have become increasingly familiar in the American workplace. The types of training that are potentially subject to repayment commitments can vary significantly. One source of potential constraints on repayment agreements is the law of restrictive covenants. Typically, such covenants temporarily prohibit employees from competing, post-termination, with their former employers. Another question frequently arising in litigation concerning repayment agreements, is whether the stipulated recoupment amount qualifies as an appropriate measure of damages under contract law for the breach of the service requirement. In cases involving mandatory training and assumption of repayment obligations, employees predictably have raised defenses on the basis of duress and unconscionability. One of the thorniest issues in the law of repayment agreements concerns whether the repayment obligation has any impact on the employee's entitlement to ongoing employment.