Training costs arbitration

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Apr 15, 2008 5:25 pm

So I resigned today from a wirehouse, going to a bank, and having done my reasearch had heard from  many people, including an HR person AT the wirehouse, that they generally do not go after individuals for training costs if they don't go to a competitor.  Finally spoke to my manager, and all he would tell me was that the issue goes to the legal department if your licenses are transferred and they made the decision.

Is this correct? Why was I told it was on the discretion of the individual manager if in fact, it's not? And of course, what do I do if they come after me? The bank won't offer to pay the costs back (which they told me up front when we had discussed it).  Can I go to arbitration myself to get it down from around 30k (ridiculous) or do I need to get a lawyer as soon as I get the letter?

help!

Apr 15, 2008 6:44 pm

Yeah, it's a contract, but there is no other industry in which the cost of training a new employee is considered something they employee owes you when they leave, which is why it's so often discussed.  If its just not the job for you, I dont think "sticking it out" for another few years is going to cut it.  No one goes into a job thinking they'll leave in less than a year or two, and no employer hires you thinking that either; it's a risk for both parties and certainly seems "ridiculous" when you've got experience working in other industries for the firm to ask for that money back (in amounts much greater than they have truly paid)

Does anyone have anything really helpful? Should I just not worry about it until i get a letter?

Apr 15, 2008 7:14 pm
kap39:

Yeah, it's a contract, but there is no other industry in which the cost of training a new employee is considered something they employee owes you when they leave, which is why it's so often discussed.  If its just not the job for you, I dont think "sticking it out" for another few years is going to cut it.  No one goes into a job thinking they'll leave in less than a year or two, and no employer hires you thinking that either; it's a risk for both parties and certainly seems "ridiculous" when you've got experience working in other industries for the firm to ask for that money back (in amounts much greater than they have truly paid)

Does anyone have anything really helpful? Should I just not worry about it until i get a letter?


The industry practice may well be ridiculous but that doesn't change the terms
of the contract you signed or your potential liability arising from it.  Don't waste
your breath and energy over things you can't control.  Deal with
reality as it is.

In what way is the bank "not a competitor?"  Are you going to leave all your clients at your old firm, or do you hope to bring some with you?

Apr 15, 2008 7:27 pm

I should have specified ( and this is part of my frustration with this policy) I will only be working with smaller clients at the bank - the clients that my wirehouse won't touch anyway.  I am not taking any clients with me - i didn't really bring that many in to begin with, I inherited many accounts from other advisors.  I guess in my view i'm a small fish that isn't a threat to them, so I'm wondering if they'll see it that way as well or if i should just count on getting a lettter in a few months and deal with it then.  

Apr 17, 2008 5:09 pm

Here is a somewhat related question.  How can I get a copy of my training/repayment contract without arousing suspicion?  Or how would I find out the terms.  Basic story is, I'm at a wirehouse.  When I started, the training contract was for 2 years.  That's what I was told and what I signed.  Unfortunately, I didn't receive a copy of that contract.  Basically it was "we'll make a copy and get that to you shortly" and being naive, I didn't follow up.  I'm over the 2 year mark at the firm and am ready to move to another wirehouse.  But during my time at my current firm, the contracts were revised to 3 year deals.  So I basically need to prove that I'm free and clear before making the move.  I wish I could just ask for it, but that is obviously not going to work. 

Apr 17, 2008 7:34 pm
shadow191:

Here is a somewhat related question.  How can I get a copy of my training/repayment contract without arousing suspicion?  Or how would I find out the terms.  Basic story is, I'm at a wirehouse.  When I started, the training contract was for 2 years.  That's what I was told and what I signed.  Unfortunately, I didn't receive a copy of that contract.  Basically it was "we'll make a copy and get that to you shortly" and being naive, I didn't follow up.  I'm over the 2 year mark at the firm and am ready to move to another wirehouse.  But during my time at my current firm, the contracts were revised to 3 year deals.  So I basically need to prove that I'm free and clear before making the move.  I wish I could just ask for it, but that is obviously not going to work. 


First, the terms of the contract you signed will remain unchanged despite the fact they may have changed the terms for those who joined later than you.  So if the time period on the contract you signed was two years, it remains two years. 

That still leaves you with your basic question about how you can get a copy without arousing suspicions.  Bottom line is you probably can't - your inquiry will set off alarms. If you are planning a departure soon (and who isn't who asks this question?) you don't need the risk.

Two comments: perhaps you can approach another FA you know & trust who started around the same time as you and ask for a copy of their contract.  Alternatively, if you are very confident about the two year period on your contract, tell your attorney to proceed on the basis of a two year deal.  But you better be sure of that - you don't need surprises after you have already exited.

I'm always amazed at the number of people in this industry who don't bother to keep copies of all employment related contracts and documents.  This part isn't rocket science, folks - it's common sense.

Apr 17, 2008 7:50 pm
Well, it was one of those situations where I was so excited about the job.  I never thought I'd ever leave the firm.  So at the time, I just never thought anything of it to get a copy of my repayment contract.  And I'm sure of the time frame.  it was explained to me in detail.  I never thought it was anything but 2 years until one of the firms I'm talking to mentioned that their lawyers said my firm now has a 3 year deal and they wanted proof that I was out of my contract.  The terms they mentioned to me now sound nothing like what I saw 2 years ago.
 
I guess I'll see if I can call HR anonymously and ask a generic question or call a few people I know at other branches from my training class.
 
Morphius:
shadow191:


First, the terms of the contract you signed will remain unchanged despite the fact they may have changed the terms for those who joined later than you.  So if the time period on the contract you signed was two years, it remains two years. 

That still leaves you with your basic question about how you can get a copy without arousing suspicions.  Bottom line is you probably can't - your inquiry will set off alarms. If you are planning a departure soon (and who isn't who asks this question?) you don't need the risk.

Two comments: perhaps you can approach another FA you know & trust who started around the same time as you and ask for a copy of their contract.  Alternatively, if you are very confident about the two year period on your contract, tell your attorney to proceed on the basis of a two year deal.  But you better be sure of that - you don't need surprises after you have already exited.

I'm always amazed at the number of people in this industry who don't bother to keep copies of all employment related contracts and documents.  This part isn't rocket science, folks - it's common sense.