New Lawsuit Alleges PetSmart Used Training Repayment Agreement Provisions (TRAPs) to Lock Pet Groomers into Grueling, Low-Wage Jobs; Advocates Applaud Surge in State Action to Combat TRAPs

July 30, 2025 | WASHINGTON, D.C. — Colorado Attorney General Phil Weiser filed a lawsuit against PetSmart for forcing PetSmart pet groomers into an illegal training debt scheme. 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. The lawsuit alleges that PetSmart used 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. This action comes amid a surge of state-level enforcement and legislation to combat corporations’ use of Training Repayment Agreement Provisions, or TRAPs, to harm workers.

In response, Chris Hicks, Senior Policy Advisor at SBPC and co-author of Trapped at Work, the 2022 investigation that sounded alarms about PetSmart’s abuses, released the following statement:

“AG Weiser’s lawsuit seeks long-overdue justice for pet groomers trapped under thousands of dollars in predatory debt after attending PetSmart’s so-called ‘grooming academy.’ The facts of the Colorado AG’s suit are familiar to anyone who has been caught up in their own employer’s increasingly common debt-for-workplace-training scheme—across the country big corporations use predatory debt to trap people at work, which is simply modern-day indentured servitude. We applaud AG Weiser’s leadership in the state-by-state effort to end these abuses across the economy and free workers from Training Repayment Agreement Provisions or TRAPs.” 

In July 2022, BreAnn Scally, a former PetSmart groomer, brought a groundbreaking class action lawsuit against PetSmart for its use of TRAPs to target low-wage pet groomers in California—a case that mirrors many of the allegations in Colorado’s lawsuit. Scally bravely called out her employer’s abusive training debt scheme, was forced into arbitration and unable to represent a class of California pet groomers due to fine print in her employment contract that denied her this fundamental right. As a state law enforcement official, Attorney General Weiser can hold PetSmart directly accountable, including when individual groomers’ rights are blocked. 

At the same time as Scally filed her lawsuit in California, SBPC released Trapped At Work, which warned about specific corporations’ embrace of TRAPs to exploit their workers, including the practices by PetSmart. In the three years since SBPC published the results of this investigation, a broad coalition of labor unions, economic justice and anti-monopoly advocates, workers’ rights groups, public interest lawyers, and public officials joined together to fight back against these abuses of corporate power.

Last week, the Attorneys General of California, Colorado, and Nevada announced a multi-state settlement with 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 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.

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. These enforcement actions come as state lawmakers across the country advance new legislation to ban these practices, with more than half a dozen states taking 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 or limit employers from using TRAPs and other contracts that charge employees fees for quitting.

Yesterday, Massachusetts held a hearing on SB 1038, a bill that would prohibit large corporations from using TRAPs and similar restraints on workers. Persis Yu, SBPC deputy executive director and managing counsel, testified in support of the bill and highlighted PetSmart’s use of TRAPs as a tool that employers use to immobilize workers and corner labor markets, allowing them to drive down wages and benefits.

Background on TRAPs used by PetSmart

After Scally filed her lawsuit in July 2022, former Senator Sherrod Brown invited her to participate in a listening session on new financial products, including TRAPs and other types of employer-driven debt. After Scally and other workers shared their experience with TRAPs, the former senator remarked, “Last I checked, indentured servitude was illegal in the United States of America, but it looks like some enterprising companies are rebranding it with these new contracts.”

In 2024, PetSmart reached a settlement with Pennsylvania Attorney General Michelle Henry over its use of TRAPs in the state, requiring the company to no longer use TRAPs and pay a fine to the state. The attorney general alleged that PetSmart began using TRAPs with PetSmart groomers as early as January 2018. Because the company represented the grooming training as “FREE,” the attorney general found that the TRAP debt was unenforceable under Pennsylvania law.

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

SBPC’s virtual presentation on how state and local regulators can combat TRAPs, with keynote remarks from Martha Fulford, Assistant Deputy Attorney General of Colorado: Advocates to State Officials: Act Now to Protect Workers from Employer-Driven Debt TRAPs

A copy of the complaint in Scally v. PetSmart, filed in the Superior Court of the state of California, is available here.

SBPC press release about PetSmart’s use of forced arbitration: Former PetSmart Groomer Caught in Predatory Training Repayment Agreement Provision (TRAP) Denied Access to Justice, Seeks Leave to Appeal District Court Decision Ending Ground-Breaking Class Action

A copy of the Colorado Attorney General’s complaint in State of Colorado v. PetSmart can be found here.

Example of a PetSmart TRAP: https://protectborrowers.org/wp-content/uploads/2022/07/PetSmart-TRAP_Redacted.pdf 

Example of a PetSmart Debt Collection Notice: https://protectborrowers.org/wp-content/uploads/2025/07/PetSmart-Collection-Notice-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.