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Publication Date

4-16-2023

Abstract

American corporations are increasingly expanding tuition reimbursement programs, potentially improving access to higher education for American workers. Yet, despite their increasing availability, only 2% of employees, as a percentage of those interested in pursuing further education, are utilizing these reimbursement programs. For those employees who do make use of these reimbursement programs, they may face unexpected challenges to accessing judicial remedies if a dispute arises.

This Note takes an interdisciplinary approach to first explore employee risks and employer incentives under tuition reimbursement programs. On the employee side, a worker risks premature termination by expressing an interest in tuition reimbursement because her request could be seen as an intent to leave her current role. Moreover, an employee incurs a risk of frustrated expectations if she first pays, or takes on debt to pay, for tuition and the company terminates her prior to reimbursement. On the other hand, an employer’s immediate profit incentives may not align with employee use of these programs, as employers may reasonably expect increased labor costs and reduced employee focus on her work.

With this theoretical background, this Note then investigates how current judicial doctrines apply to the adjudication of tuition reimbursement disputes. Given the strong presumption of employment relationships being at will, traditional contract and promissory estoppel doctrines are insufficient in resolving tuition reimbursement claims. Moreover, various federal and state statutes pertaining to antidiscrimination and employee benefits are equally insufficient for these purposes.

In light of these shortcomings, this Note advocates for the extension of the implied covenant of good faith and fair dealing into employment relationships when an employer offers a tuition reimbursement program. This would create parity in judicial treatment between commercial and employment contracts and privilege the objective expectations of both the employee and employer. Finally, this Note provides policy considerations as to why standardization of the implied covenant of good faith and fair dealing is preferable as a normative matter.

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