All Workers Must Be Safe from Abusive TRAPs and Made Whole from Past Use
May 10, 2023 | WASHINGTON, D.C. — HCA Healthcare, the largest for-profit healthcare system in the United States, announced last night on NBC Nightly News they will no longer rely on Training Repayment Agreement Provisions (TRAPs) to retain their nurses. As previous Student Borrower Protection Center (SBPC) reports have highlighted, employers have embraced TRAPs as a way to sidestep laws prohibiting the use of non-competes, instead relying on the threat of job training debt to keep workers in bad jobs.
HCA Healthcare has previously attempted to collect on-the-job training debts of thousands of nurses, referring their TRAPs to a debt collection company called IC Systems. Nurses frequently said the purported “training” was little more than job orientation, even though HCA Healthcare claimed it was worth tens of thousands of dollars. The company has not said whether this policy change would be retroactive or only apply to new nurses moving forward.
“I commend HCA Healthcare, but the company should never have used TRAPs to exert power over workers in the first place. No worker should ever be forced into indentured servitude in order to get the training they need to do their job safely and proficiently,” said SBPC deputy executive director and managing counsel Persis Yu. “Employers across the country should take note and follow suit. Moreover, workers who have been harmed by abusive collection of TRAP debt must be made whole and those who are currently locked in a TRAP must be released.”
“It is great news for nurses around the country to know that HCA Healthcare is no longer using TRAPs,” said SBPC senior policy advisor Chris Hicks. “Now HCA Healthcare needs to commit to rescinding existing TRAPs that nurses are currently working under and reimburse former nurses who the company sent debt collectors after. We hope that other hospitals follow HCA’s example and abandon the use of TRAPs to lock healthcare professionals in unsafe and underpaid positions.”
Background
Earlier this year, the Federal Trade Commission took steps to ban TRAPs as part of an ongoing rulemaking related to non-compete agreements. This action follows an inquiry by the Consumer Financial Protection Bureau into so-called “employer-driven debt” including TRAPs. State lawmakers are also taking steps to ban these contracts under state law.
These recent government efforts follow a wave of litigation filed by Towards Justice and SBPC, including high-profile class action lawsuits against giant pet supply retailer PetSmart, cargo airline Ameriflight, and tech-training and employee-staffing agency Smoothstack.
Further Reading
- SBPC report on TRAPs: Trapped at Work: How Big Business Uses Student Debt to Restrict Worker Mobility
- SBPC’s comment in Response to the FTC’s Proposed Ban on Non-Compete and De Facto Non-Compete Clauses: Comments in Response to Proposed Ban on Non-Compete and De Facto Non-Compete Clauses
- Lawsuit against PetSmart for its use of TRAPs, Scally v. PetSmart: Groundbreaking Lawsuit Seeks to Block PetSmart’s Predatory Lending Scheme
- Lawsuit against Ameriflight for its use of TRAPs, Fredericks v. Ameriflight: Major Cargo Airline Company Accused of Illegally Trapping Pilots in Up to $30,000 of Training Debt Amidst Supply Chain Crisis
- Lawsuit against Smoothstack for its use of TRAPs, O’Brien v. Smoothstack: “Unconscionable” Debt-for-Training Scheme Funnels Low-Wage Tech Workers to Fortune 500 Companies; Groundbreaking Class-Action Lawsuit Seeks to Void Predatory Training Repayment Agreement Provisions
- SBPC backgrounder on TRAPs: Background on Training Repayment Agreement Provisions
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About Student Borrower Protection Center
The Student Borrower Protection Center (SBPC) is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. The SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.