By Chris Hicks | September 4, 2025

Since the beginning of the Trump Administration, Student Borrower Protection Center (SBPC) has sounded the alarm on steps this Administration is quietly taking to roll back worker and consumer protections. If there was ever a doubt, President Trump has made it crystal clear: he does not care how employers treat their workers. That is why last month he revoked former President Biden’s executive order promoting competition, and has given government agencies the green light to abandon efforts to protect workers from a slew of anticompetitive practices, like non-competes and Training Repayment Agreement Provisions (better known as TRAPs), that limit worker mobility and bargaining power.

Despite evidence showing that TRAPs and non-competes are on the rise across the economy, federal agencies are enabling employers to use these abusive practices:

  • In February 2025, the National Labor Relations Board (NLRB) Acting General Counsel rescinded dozens of guidance memos that protected workers, including memos that found TRAPs and non-competes to be unlawful and advised workers on how to submit Unfair Labor Practice complaints with the NLRB. Numerous workers had filed complaints about TRAPs and non-competes, with the NLRB reaching settlements with employers to end their use of non-competes and TRAPs, and return any debt that had previously been collected on TRAP debt.
  • Throughout the Trump presidency, acting Consumer Financial Protection Bureau (CFPB) Director Russ Vought has dropped dozens of enforcement actions against companies for violating the law, and a recent TRAP case is the latest instance of the CFPB being missing in action. In August 2025, the Attorneys General (AGs) of California, Colorado, and Nevada brought a public enforcement action against HCA Healthcare (HCA) for their use of abusive TRAPs under the federal Consumer Financial Protection Act and other state-level protections. At California AG Rob Bonta’s press conference announcing the settlement, he explained that the investigation into HCA’s use of TRAPs had once been conducted jointly with the CFPB, despite the Bureau not being part of the settlement. 

And it is widely expected that the Federal Trade Commission will withdraw from defending a landmark rule it finalized last year to free workers from non-compete agreements—including TRAPs and other stay-or-pay contracts—in the coming days. In just a matter of months, the Trump Administration has dismantled vital worker protections in order to implement its blatantly antiworker agenda.

A Surge of State-Level Enforcement Actions

Last month, Colorado AG Phil Weiser filed a lawsuit against PetSmart for forcing PetSmart pet groomers into an illegal training debt scheme. Just as BreAnn Scully claimed in July 2022, this suit claims that PetSmart lured would-be groomers into employment by promising “free” training and equipment, but then charged them as much as $5,500 if they departed within two years. It then accused the company of using third-party debt collectors to collect against former groomers who quit low-wage, grueling entry-level positions with the giant pet retailer, and capitalized on the fear of this debt collection to keep other pet groomers trapped in their jobs. According to the lawsuit, PetSmart continued to use TRAPs after state lawmakers outlawed their use.

And as noted above, just days before the PetSmart litigation was filed, the AGs of California, Colorado, and Nevada announced a multi-state settlement with HCA, the largest for-profit healthcare system in the country, for unlawfully requiring entry-level nurses to enter a years-long, abusive training debt scheme. These enforcement actions allege that HCA used TRAPs to force nurses to stay in their jobs for up to two years or face a bill from HCA for thousands of dollars in debt tied to on-the-job training. The terms of this settlement require HCA to immediately stop collecting on existing TRAP debt and pay nearly $3 million in restitution to workers and penalties to the states.

This follows New York AG Letitia James reaching a settlement with Advance Care Staffing (ACS), a healthcare staffing company, in May to recover over $660,000 for foreign-recruited nurses who were subjected to exploitative stay-or-pay contracts. Her settlement comes on the heels of ACS being sued by a former nurse and the Biden Administration’s U.S. Department of Labor. These suits alleged that ACS recruited nurses from abroad, then required them to sign contracts that required them to work for the company for at least three years or pay $20,000—plus paying the company’s future profits, attorneys’ fees, and arbitration costs. In one case, the company sued a nurse who resigned due to unsafe working conditions for more than $24,000—$9,000 of which were for future profits—an amount that was more than he had been paid by the company ($20,372.90 in gross wages, before tax withholdings and other deductions) for his entire period of employment.

These actions were worker-led and came from lawsuits filed in recent years by private attorneys, labor unions, and advocates. As federal agencies fail to investigate companies using TRAPs or other types of stay-or-pay contracts, this shows that advocates can still drive a public enforcement agenda by shining the spotlight on companies engaging in abusive practices. 

A Groundswell of State Legislation

Given the elimination and uncertainty of existing federal protections, state lawmakers are stepping up to create new protections against TRAPs for workers—freeing healthcare professionals, truck drivers, pet groomers, pilots, and millions of other workers from employers who are using debt as a tool of coercion. In 2025 alone, 10 states have taken action to protect workers from TRAPs:

  • Last month, the California Assembly passed AB 692, which is now advancing through the California Senate. This bill would prohibit all TRAPs, and the vast majority of stay-or-pay contracts.
  • New York passed the Trapped At Work Act with bipartisan support, which prohibits all employers statewide from using TRAPs in the Empire State.
  • Colorado passed SB 25-083 with bipartisan support, which prohibits hospitals and healthcare staffing companies from charging medical professionals any damages for departing their jobs. 
  • Indiana passed SEA 475, which prohibits hospitals from imposing stay-or-pay contracts—contracts that work by charging departing workers a fee for quitting, including TRAPs—in physicians’ employment contracts if the terms require workers to remain at a facility for more than three years.
  • Wyoming passed SF0107, which prohibits employers from imposing stay-or-pay contracts that last longer than four years; and it also requires employers to prorate the amount that can be collected every year of employment.
  • Massachusetts held a hearing on SB 1038, a bill that includes language that would prohibit large corporations from using TRAPs and similar restraints on workers. SBPC’s deputy executive director and managing counsel, Persis Yu, testified in support of the bill.
  • Nevada, Ohio, Vermont, and Washington have all introduced bills that would prohibit or limit employers from using TRAPs and other contracts that charge employees fees for quitting.

As the Trump Administration continues to turn its back on workers and shred protections against this exact type of worker exploitation, these types of actions by state policymakers and regulators across the country are filling a critical role and show they are standing up for working people. Last summer, SBPC released a legislative toolkit for state lawmakers and advocates, and now we have seen a groundswell of movement at the state level to ban or limit the use of TRAPs and other types of stay-or-pay contracts. More states are joining the movement across the country to ban TRAPs—freeing millions of other workers from employers who are using debt as a tool of coercion to force workers to stay in low-paying, unsafe jobs. 

We know that if left unchecked, TRAPs and stay-or-pay contracts have the potential to leave workers buried in debt just for taking a better opportunity or for having to quit a job to navigate personal hardship. This Labor Day week, join us in putting an end to worker debt TRAPs by using our legislative toolkit to introduce new state legislation, or share your story with us about your experience with stay-or-pay contracts.

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Chris Hicks is a Senior Policy Advisor at the Student Borrower Protection Center. His work focuses on the intersection of consumer and labor protections.