A commuter airline, Southern Airways Express, has taken legal action against 19 pilots who recently quit their jobs by filing lawsuits against them. The company claims that these pilots owe thousands of dollars in training costs, and it is enforcing a controversial employment clause called a “training repayment agreement provision.” This clause requires workers to pay a specified amount if they resign before completing a certain period of employment.
Proponents of these agreements argue that they prevent workers from leaving for higher-paying jobs immediately after receiving valuable training. However, critics, including the Federal Trade Commission under President Joe Biden, argue that these agreements can unfairly restrict workers’ mobility and keep wages low in the labor market.
Southern Airways filed complaints against the former pilots in small-claims and county court in Florida’s Palm Beach County. The airline alleges that each pilot signed a promissory note committing to fly for at least 12 months as a captain. If the pilots voluntarily resigned, were fired for cause, or became unable to fulfill their duties before completing the required time, they could be liable for up to $20,000 in training costs. Most of the promissory notes were for $16,000, but the amount owed could be reduced based on the pilots’ captain hours.
Southern Airways CEO Stan Little stated that the company decided to enforce the agreements for pilots who had quit, claiming that signing bonuses and offers from competitors had enticed them to leave. Little emphasized that the company wants their pilots to stay and pass on their knowledge before moving on to better-paying jobs. The starting wage for pilots was $12 per hour, increasing to $18 and then $21 per hour as they accumulated more flight time.
Rachel Dempsey, an attorney with legal aid group Towards Justice, expressed surprise at the number of lawsuits filed by Southern Airways in July. Towards Justice has called for federal agencies to prohibit the use of training repayment agreements, citing their impact on wages and workers’ ability to raise workplace concerns.
Little estimated that over 90% of the company’s pilots stay for at least a year as captains before leaving. Many go on to work for SkyWest, a regional airline that has a minority stake in Southern Airways. In the aviation industry, these agreements are more prevalent as companies try to recoup their training investments before pilots join competitors.
The Federal Trade Commission has proposed a rule to ban noncompete agreements, including training repayment provisions. However, the FTC lacks jurisdiction over aviation firms, which fall under the Department of Transportation. Progressive groups are urging the DOT and other federal agencies to implement their own bans on these agreements.
In times of low unemployment, employers may be more inclined to enforce such agreements as they compete for workers. The aviation industry has been particularly competitive, with carriers offering attractive signing bonuses to attract pilots. Little stated that if there were no pilot shortage, this issue would not arise, and he mentioned that there would be more lawsuits to come.
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