Bosses in industries such as retail, health care and logistics are reverting to an old tactic and trapping people in miserable jobs by threatening to saddle them with debt if they quit. Workers across the United States in fields ranging from nursing to trucking have been discouraged from leaving jobs they hate or can’t afford to keep because employers vow to charge them for training costs if they quit before an arbitrary deadline.<\/p>\n
The threats are backed by so-called Training Repayment Agreement Provisions (TRAPs) in employment contracts. The practice has been likened by critics to indentured servitude and peonage — formerly common types of debt bondage in which a borrower was bound to perform labor for a creditor.<\/p>\n
TRAPs have recently come under fire from policymakers because of class action litigation against the pet store chain PetSmart, and reporting on the restrictive covenants from a watchdog group called the Student Borrower Protection Center<\/a>. Earlier this month, the Senate Banking Committee held hearings examining<\/a> the agreements and other forms of employer-driven debt. In June, the Consumer Financial Protection Bureau also launched an investigation<\/a> of employment arrangements that led to workers owing money to their bosses.<\/p>\n Two workers who are being threatened with thousands of dollars in bills through the enforcement of TRAPs appeared before the banking committee on September 7. BreAnn Scally, the lead plaintiff<\/a> in the class action against PetSmart, told lawmakers about how she was left owing $5,500<\/a> to the company for a dog \u201cGrooming Academy\u201d that was initially advertised as free. Registered nurse Cassie Pennings testified<\/a> about being stuck with $7,500, \u201cmore than six months’ rent,\u201d after leaving one hospital job because she was appalled by staffing ratios during the COVID-19 pandemic and didn’t want to be complicit in neglecting patients.<\/p>\n Although the pair came from different industries, they both detailed callous indifference from their ex-managers in response to their grievances. \u201cDespite being one of the most profitable health care systems in the nation, my former employer responded to cries for help from the front line with breakfast burritos and free water bottles,\u201d Pennings said. Scally recalled how one manager told her she could work her way out of debt simply by \u201cupselling\u201d or convincing customers to buy more pet grooming products and services. She said that she upsold $6,000 worth of products but was still charged the full amount for the debt, months after she left the job. <\/p>\n The dollar value attached by each company to the cost of training appeared to have been pulled from thin air. \u201cI thought I was going to get important and valuable training, but it wasn’t anything like that,\u201d Scally said. \u201cI didn’t get any kind of license or accreditation or anything, and my actual training was only a few weeks.\u201d Pennings also told lawmakers that she doubted the $7,500 price tag placed on the cost of her training regimen.<\/p>\n At a second hearing on September 13, one of Scally’s lawyers, David Seligman, told the Senate Banking Committee<\/a> that TRAPs are used by managers to leave workers \u201cstuck with low pay, dangerous conditions, abusive treatment, or work that does not allow them to advance professionally.\u201d The chair of the committee, Ohio Democrat Sherrod Brown, was unimpressed with the managerial tactic.<\/p>\n