Experts and State Consumer Protection Officials Featured at Virtual Event on State and Local Action to End the Use of Training Repayment Agreement Provisions (TRAPs) by Employers; SBPC Releases New Toolkit for State Policymakers to Take Action
July 30, 2024 | WASHINGTON, D.C. — At a virtual briefing on Wednesday afternoon hosted by Student Borrower Protection Center (SBPC) and the National Employment Law Project (NELP), legal experts and advocates joined Martha Fulford, Assistant Deputy Attorney General of Colorado to urge city, county, and state regulators to use existing authorities to protect workers from Training Repayment Agreement Provisions (TRAPs).
A recording of the briefing is available here: https://youtu.be/UVxCSdWKyWs?si=OaJnk0uT1VnBAppm
The briefing highlighted the risks TRAPs pose to workers, honest employers, and the economy. This event builds on a months-long series of “Deep Dives” jointly published by NELP and SBPC, and written by a variety of experts. This new writing details how cities and states can unlock workers across the country from TRAPs. Also at the briefing, SBPC released a toolkit for state policymakers laying out model legislation, and including a legislative tracker and other resources for how to stop TRAPs.
A copy of the toolkit for advocates working on state and local policy is available here: https://protectborrowers.org/SBPC-TRAPs-State-Legislative-Toolkit
Background
Employers across the country are increasingly holding workers hostage in low-paying and substandard working conditions through employer-driven debt. To lock workers into these debts, employers rely on restrictive employment covenants such as the above stay-or-pay contracts and TRAPs.
“Stay-or-pay” employment contracts are an abusive form of employer-driven debt, and similar to TRAPs, serve as de facto non-compete agreements. They require departing employees to compensate for the “cost” of each day that they “fail to provide services”—turning employment contracts into guaranteed profit streams.
The growing use of employer-driven debt to block workers from moving to better jobs is a consumer protection crisis for individual workers, but it is also something broader: a method of unfairly holding back labor market competition. In particular, as stay-or-pay contracts and TRAPs grow more prevalent, they are helping to underpin an industry-wide power imbalance between workers and management across a range of professions.
Further Reading
Read the “How Cities and States Can Unlock Workers Across the Country from TRAPs” Deep-Dive Series Kickoff Blog Here: How Cities and States Can Unlock Workers Across the Country from TRAPs
Deep Dive on Labor Protections: Deep Dive: How Labor Protections Allows Cities and States to Combat Worker Traps
Deep Dive on Antitrust Protections: Deep Dive: State Law Provides an Untapped Route to Combat TRAPs and Other Coercive Contracts
Deep Dive Consumer Protections: Deep Dive: When Employers Turn Employees into Consumers, State and Local Regulators Must Turn to Consumer Protection Law
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.