By Matthew A. Goodin
Many employers find it advantageous to both the company and its workers when offering tuition reimbursement programs. However, one California case provides an illustration of a generous employer and an ungrateful employee—and an outcome that may be surprising.
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USS-POSCO Industries (UPI), a steel fabricator, hired Floyd Case in 2007 into an entry-level position. As a condition of employment, he joined the United Steelworkers union.
UPI faced a shortage of skilled maintenance technical electrical workers (MTEs). To address the shortage, it entered into an agreement with the union that it would train up to 10 current employees—while continuing to pay their wages and benefits—in an effort to qualify them for these skilled positions. UPI and the union agreed that the company would need to retain the trained workers for a reasonable period of time to recoup its investment in the training, which was $46,000 per employee.
The training program required 135 weeks of instruction, 90 weeks of on-the-job training, and 45 weeks of classroom work. Employees who successfully completed the program and passed a test would be assigned to a vacant MTE position. The training was voluntary, and it wasn’t the only way an employee could qualify for an MTE position.
Case volunteered for the program and signed an agreement to reimburse UPI a portion of the tuition costs if he was fired for cause or voluntarily left his employment within 30 months of completing the training. The reimbursement amount was $30,000 prorated over 30 months.
When Case quit UPI only 2 months after completing the training program, it led to a lawsuit. Read more details of the case and its outcome here.