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You are bound by a contract freely signed with your employer, even if the terms are unfair to you.

The question

I read an article a few weeks back and thought you may be able to provide insight regarding my situation. I live and work in the Northwest Territories and resigned by giving my two weeks' notice back in August of 2011. The company I was working for held back two of my paycheques since I signed an aviation training bond. They valued the bond at $10,000, even though, by my calculations, the bond was worth under $2,000. The reason they made me sign the bond was to either hold me back in my career or try to prevent me from leaving and flying for an airline. At any rate, they kept my last two paycheques and thus more than what was left on my prorated bond. I have contacted the company and sent three e-mails to date, and they have never responded to my inquiries.

I am wondering if what they are doing is legal and I'm also wondering how to proceed.

The answer

Your enquiry demonstrates one of the criticisms with the legal doctrine of "freedom of contract" in the employment law context. This doctrine provides that, as long as a contract was entered into freely and voluntarily, a court will not intervene to set it aside, even if the deal was ultimately unfair to one side or the other.

The criticism of this doctrine in the workplace is that, aside from senior executives, employees are rarely on equal footing with their employers in any type of negotiations. This is because continued employment, or the potential loss of a job, is a factor that usually persuades employees to just sign whatever documents they are given to sign. This is unlike any other type of negotiation outside of the workplace, where one side or the other can simply walk away from the negotiation if it is not a good deal for them.

In your case, you signed a training bond, which is an agreement that required you to repay your employer for the costs of your training if you voluntarily left your job within a certain period of time. The theory behind these types of agreements is that there is a significant value to learning your trade and gaining experience, especially in the airline industry, so instead of asking you for an upfront training fee, your former employer had you commit to staying for a period of time by forcing you to repay them if you elected to leave. These types of agreements are very common in some industries. The problem, however, is that the value assigned to the training, in your case $10,000, is often arbitrary and extremely high.

Despite the high costs of leaving, and your view that the value of the bond was worth much less than $10,000, according to the principle of freedom of contract, you were obligated to pay that amount to your employer pursuant to the terms of the bond. Although I have not seen a copy of what you signed, if it was drafted properly, it likely gave your employer the right to repay itself from any outstanding money owed to you, including your last two paycheques. No surprise there.

Therefore, your only claim against the company would be for the difference between what you owed it under the training bond and the value of your last two paycheques – and in my view, your former employer was clearly not permitted to withhold that additional money. It is unfortunate that they have. Since you have written to the company to request payment, without any response, it's time for you to decide whether you want to escalate the matter through legal action, in which case a small-claims court lawsuit may be your best option.

Daniel Lublin is a workplace law expert and a partner at Whitten & Lublin. He writes on legal issues for Globe Careers.

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