Following Multi-State AG Action Against HCA Healthcare, California Legislature is Poised to Ban All Training Repayment Agreement Provisions (TRAPs) Across the Golden State
July 24, 2025 | WASHINGTON, D.C. — Today, the Attorneys General of California, Colorado, and Nevada brought a public enforcement action against HCA Healthcare (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 forced 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. These enforcement actions come as state lawmakers across the country advance new legislation to ban these practices, including California’s AB 692, which passed the California Assembly earlier this year and is currently under consideration by the California Senate.
In July 2022, Student Borrower Protection Center (SBPC) worked with Towards Justice and Jubilee Legal to build a groundbreaking case against PetSmart for its use of TRAPs to target low-wage pet groomers in California. At the same time, SBPC released Trapped At Work, which warned about specific corporations’ embrace of TRAPs to exploit their workers, including the practices by HCA at the center of today’s multi-state action. In the three years since the results of this investigation were published, a broad coalition of labor unions, economic justice and antimonopoly advocates, workers’ rights groups, public interest lawyers, and public officials joined together to fight back against these abuses of corporate power.
In response, Chris Hicks, Senior Policy Advisor at SBPC and co-author of Trapped at Work, the 2022 investigation that sounded the alarms about HCA’s abuses, released the following statement:
“The writing is on the wall for executives who run these illegal training debt schemes: if you use debt to exploit your workers, you will face justice. We commend AG Bonta, AG Weiser, and AG Ford for their leadership in this fight. Nurses across California, Colorado, and Nevada are finally free from these abusive debts and exploitative labor practices. It’s time for California lawmakers to pick up where these attorneys general have left off and quickly pass legislation to ban TRAPs across the Golden State and create new penalties for companies that break the law.”
Today’s multi-state enforcement action alleges that HCA Healthcare violated the prohibition on “abusive” acts and practices under the federal Consumer Financial Protection Act—a prohibition that can be enforced directly by state attorneys general, or by the Consumer Financial Protection Bureau (CFPB). The CFPB once made it a priority to constrain employers’ use of debt to exploit workers; however, under President Trump and acting CFPB Director Russ Vought, the agency has attempted to fire 90 percent of the agency’s staff, dropped dozens of enforcement actions, and rolled back protections that saved working families more than $18 billion. In the press release announcing today’s action, California AG Rob Bonta explained that the investigation into HCA’s use of TRAPs had once been conducted jointly with the embattled federal consumer watchdog.
As federal enforcers retreat from their duty to protect workers and consumers, state regulators are filling the gap, including in California, Colorado, Nevada, and New York.
Today’s enforcement action comes as more than half a dozen states take action to protect workers from TRAPs in 2025 alone:
- Last month, the California Assembly passed AB 692, which is now advancing through the California Senate.
- New York passed Assembly Bill A584C 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.
- Nevada, Ohio, Vermont, and Washington introduced bills that would prohibit employers from using TRAPs and other contracts that charge employees fees for quitting.
Background on TRAPs used by HCA Healthcare
Prior to today’s settlement, HCA Healthcare’s use of TRAPs has faced years of scrutiny and litigation. HCA Healthcare required new entry level nurses to agree to the TRAP as a condition of employment in HCA hospitals, and attempted to collect on-the-job training debts of thousands of nurses, referring their TRAPs to a debt collection company called Benefit Recovery Group, if they dared to leave before two years. 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 despite the training not providing nurses with education or training necessary for licensure as an RN.
In May 2023, the company’s use of TRAPs was investigated by NBC Nightly News, prompting the company to abandon the practice for newly hired nurses (although today’s settlement shows that the company continued to collect on existing TRAP debt).
In June 2023, the California Nurses Association filed a lawsuit against the company for its abusive use of TRAPs with their current and former members, claiming the company’s use of TRAPs was an express violation of California Labor Code Sections 232.5, 1102.5, 2802 and 2802.1. The lawsuit is ongoing.
Further Reading
SBPC report on TRAPs: Trapped at Work: How Big Business Uses Student Debt to Restrict Worker Mobility
SBPC blog on TRAPs: As Trump Administration Rolls Back Federal Protections, State Lawmakers Must Protect Workers From Predatory Employer-Driven Debt
SBPC toolkit on how states can stop TRAPs: Training Repayment Agreement Provision (TRAP) State Legislative Toolkit
SBPC blog on how local regulators can protect workers: How Cities and States Can Unlock Workers Across the Country from TRAPs
A copy of the California Attorney General’s complaint in California v. HCA Healthcare can be found here: https://oag.ca.gov/system/files/attachments/press-docs/HCA%20Healthcare%20-%20Complaint%20FINAL.pdf
Example of an HCA Healthcare TRAP: https://protectborrowers.org/wp-content/uploads/2025/07/HCA-St-Davids-Employment-REDACTED.pdf
Example of an HCA Healthcare debt collection notice: https://protectborrowers.org/wp-content/uploads/2025/07/HCA-Debt-Collection-Letter-REDACTED.pdf
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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.