The law
I decided to poke around a bit this morning, just to see what was out there in the reported cases on training contracts or promissory notes, pilots, and the enforceability of such arrangements. Bottom line: training contracts, whether written as a contract or as a promissory note, are enforceable. Read carefully all such agreements before you sign and understand what you are getting yourself into. I am not your lawyer, if you want or need legal advice in this matter, get your own lawyer at your own expense. I encourage you to do so before signing any such agreement. Mr. JT8D, if you have further information you'd like to add, please do so. I'll be happy to review any law or cases you can point me to.
Excelaire Serv., Inc. v Wolkiewicz, 2006 NY Slip Op 30676(U), 4 (N.Y. Sup. Ct. 2006): This is a trial court opinion (New York is a bit odd, trial courts are called "supreme court".) Excelaire hired pilot Wolkiewicz with a one-year training contract at $45K per year. Within a couple months, after the aircraft Wokiewicz had been trained for went down hard for maintenance, Excelaire cut his pay 60% (!), down to $18K per year, and he didn't fly for months. Wolkiewicz quit after 7 months. Excelaire sued. Excelaire lost, not because training contracts are not enforceable (Wolkiewicz didn't even challenge the contract on that ground), but because the court found as a matter of law that Excelaire has constructively discharged Wolkiewicz. Under New York law, quoting the court, "Constructive discharge may also be evidenced by the fact that the employer has made the employee's working conditions so intolerable that a reasonable person would feel forced to resign." Constructive discharge is the equivalent of firing the employee as far as the law is concerned, and since the training contract explicitly stated is was not enforceable if the employee was fired, Excelaire could not collect on the training contract. Bottom line, the contract was enforceable, and in fact the court enforced it. The court just enforced it against Excelaire due to the facts of the case.
That is the only pilot training contract case I could find in the entire country (at least using the terms I searched for in Lexis). I did turn up a case where several students of a helicopter training school in California sued the bank that lent them money for helicopter training. The school signed up a bunch of students, got all the students to get loans (averaging $50-55,000 each) from KeyBank, then went bankrupt after providing minimal training, leaving the students on the hook for the entire amount of the loans (student loans, generally not dischargable in bankruptcy, ouch). The published appellate decision was actually about the enforceability of an arbitration clause in the loan agreement, not about the enforceability of the loan itself. They facts were awful. It was pretty clear the school was set up to fleece gullible students (sound familiar?). Tough cookies, said the court to the students. Good luck at arbitration (where the bank always wins, by the way). See Kilgore v. KeyBank, N.A., 718 F.3d 1052 (9th Cir. Cal. 2013).
As for promissory note-style agreements, I couldn't find any case involving a pilot. I did, however, find a case involving electricians and a union-sponsored training program. Trainees signed a promissory note for training against a loan they received from a training trust fund set up by the union, repayable by going to work only for certain employers who sponsored the training program. If the student went to work for a non-participating employer within the repayment period, he had to pay back the training costs. In other words, the arrangement is exactly like a pilot signing an agreement for his initial training at a new employer.
In this case, the student electrician tried to get out of the repayment requirement by making an arcane argument about the agreement not complying with the Employee Retirement Income Security Act (ERISA), an argument only a lawyer specializing in that brain-melting area of law could love (and also an issue that would generally not arise in the pilot situation, because the union made loans from a trust fund as opposed to the employer just paying for training straight up). No dice, said the court, pay your debt. The promissory note was enforceable. See Milwaukee Area Joint Apprenticeship Training Comm. v. Howell, 67 F.3d 1333 (7th Cir. Wis. 1995).
Oh, and by the way, this case was in Wisconsin, which like virtually every other state in the country (I believe Montana is the only exception, but don't quote me, I am not a labor lawyer), is an employment at will state. Go figure.
Did anyone make it this far other than Cgo John and maybe Vagabond? If you did, I'm impressed! Now let's get back to an endless discussion of the value of an AoA gauge in various cockpits, whether airliner or C152. I'm all in favor. The best and most direct measure of the aerodynamic state and health of your wing available.