Non-compete agreements are not the only tool employers have come up with to restrict an employee’s freedom to leave a job in order to find a better opportunity. Over the past several years, employers have increasingly relied on “Training Repayment Agreement Provisions,” appropriately known by the acronym “TRAPs,” to keep employees from leaving their jobs.
Here’s how Training Repayment Agreement Provisions work
When an employee applies for a job that may require on-the-job training, the employer requires the employee to sign an agreement (often a promissory note) obligating the employee to pay the employer back for the full cost of the training—often tens of thousands of dollars—if the employee leaves the job before a certain amount of time has passed.
These provisions are often quietly snuck into workers’ employment contracts or presented as a stand-alone contract in a mountain of hiring paperwork. Employees are not given a choice whether to sign a TRAP or not; instead, like many non-compete agreements, it’s a “take it or leave it” contract—if you want the job, you’ve got to sign the agreement.
TRAPs are especially common—both here in New Jersey and around the country—in the nursing field, trucking industry, airline industry, and even in the pet food and grooming business.
These TRAPs are often used with entry-level hospital workers, most frequently recent graduates from nursing school or immigrant nurses, as a precondition of employment. When a nurse is required to agree to a TRAP in order to get a job with a medical practice, while she initially may get some minimal on-the-job training, if she then wants to leave the job, the TRAP requires her to pay the practice an amount far in excess of the value of any training she may have received.
Many of the largest trucking companies lure potential truck drivers into their training programs with the promise of “free” or “paid” training and a high-paying job after completing the program. Instead, as a condition of getting the promised training, drivers are required to sign a TRAP that will either bind them to companies for a period that can last anywhere between 10 months and two years or cost them thousands of dollars with sky-high interest rates if they choose to leave sooner for a better job.
The use of TRAPs to bind airline pilots to their jobs has become increasingly common. We recently represented a New Jersey airline pilot who, as a condition of getting his job with a jet-leasing company, had to sign a $19,000 promissory note that he would have to repay if he left the job before one year. In a class action lawsuit filed at the beginning of this year, Kathleen Fredericks v. Ameriflight, LLC, Ms. Fredericks, an experienced airline pilot, is challenging the TRAP she and other pilots were forced to sign as a condition of employment.
In her lawsuit, she alleges that the “effect, and the intent, of the TRAP is to penalize pilots who seek out other opportunities and to keep pilots stuck in their jobs despite Ameriflight’s below-market wages and working conditions.” In her Complaint, she further alleges that the Company’s TRAP “violates state and federal law, undermines pilots’ bargaining power, and deprives other employers of qualified pilots at a moment when airlines and customers are suffering from a pilot shortage.”
The Pet Food and Pet Grooming Industry
In a class action lawsuit filed in California in July 2022 against PetSmart, the plaintiff, Breann Scally, is alleging that PetSmart requires that all employees who enroll in the Company’s “Grooming Academy” sign a Training Repayment Agreement Provision (“TRAP”.) This TRAP requires PetSmart groomers to take on $5,000 of debt to PetSmart in exchange for Grooming Academy training. The Complaint further alleges that “$5,000 far exceeds any reasonable value of the Grooming Academy. Plus, it is well beyond what PetSmart groomers, who make barely above minimum wage, are able to afford.” PetSmart “forgives that debt only if the worker stays at their job for two years after they begin training, no matter how little they are paid or how poorly they are treated.”
HOW WE CAN HELP
To the extent that Training Repayment Agreement Provisions impose unreasonable and oppressive terms on New Jersey employees, we are ready, willing, and able to challenge them in court. If you have signed a TRAP and are looking to escape from its terms, we encourage you to contact the lawyers at Schall & Barasch. Feel free to fill out our online questionnaire or give us a call at 856.914.9200.