Time’s up! AZ employer waited too long to sue ex-employees over training expenses

It’s not uncommon for employers to provide benefits to new hires, such as signing bonuses or specialized training, on the condition that the employee repay the bonus or expenses or otherwise be responsible for the cost if they leave the company within a certain period. But if the employee leaves and doesn’t comply, the employer must decide whether to sue to recover what it is owed. One Arizona employer recently learned that waiting too long to make that decision can be very costly.

Statutes of limitation

Virtually all civil legal claims are subject to a statute of limitations, meaning the claim must be filed within a certain period after the harm occurs or is discovered. In Arizona, the general statute of limitations for alleging breach of a written contract is six years. Claims for breach of an employment contract, however, are subject to a much shorter one-year statute of limitations.

The Arizona Court of Appeals recently considered which limitations period applies when an employer claims a former employee breached a repayment agreement and promissory note that were part of the employee’s job offer.

Contracts at issue

Worldwide Jet Charter, Inc., hired Gus Toulatos and Disapong Silberman as pilots, contingent on completion of flight training. Their written job offers included a promissory note and a training reimbursement agreement (TRA).