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Planx

Member
Oct 27, 2017
1,717
www.wired.com

Beware the Contract Clause Loading US Workers With Debt

Nurses, retail workers, and other employees can owe thousands of dollars just for quitting their job—or getting laid off.

On its website and in job postings and tweets, PetSmart promoted the training as a perk of employment that provided close supervision working with 200 different dogs in its "FREE, paid Grooming Academy—an exclusive 4-week, 160-hour-long program that is valued up to $6,000!" But according to a lawsuit filed against PetSmart last week in California, Scally found the reality to be less than advertised.

After a week of mostly solo book work, learning how to distinguish a poodle puppy cut from a bichon bob, Scally says she moved onto the salon floor, clipping dogs' nails, trimming their hair, dodging their bites, and assuaging their sometimes testy owners. The salon manager at the store in Salinas, California, was too busy taking care of dogs and other staff to give Scally the promised attention, her lawsuit claims. She says her training ended after three weeks instead of four and that her $15 hourly wage barely covered living expenses

A few months later, Scally told her manager she wanted to quit—but discovered her situation was still worse than she knew. As a condition of entering the Grooming Academy, she had signed a so-called training repayment agreement provision, or TRAP. It was a literal trap. If she left PetSmart within two years, she owed the company $5,000 for her training and $500 for grooming tools.

Scally's class action lawsuit alleges that PetSmart's Grooming Academy either violates a California law barring employers from charging employees for training unless it primarily benefits the worker, or breaches consumer and education law by operating as an unlicensed post-secondary school

TRAPs aren't new but have only recently become standard tools of lower-wage employers. The agreements first emerged in the late 1980s and were generally limited to a small number of highly paid professions requiring substantial on-the-job training, such as engineers, security brokers, and airline pilots. As labor markets became deregulated and union membership began to plummet around that time, employees were left with fewer protections, and TRAPs spread

From a blog I saw on the same subject
As the report notes, these employers TRAP their workers with bills in the "tens of thousands of dollars" and charge extremely high interest rates. Harrington points out that Petsmart's contracts promise "the highest rate permitted by law of the state in which this agreement was executed."

tl;dr: Employers are turning to indentured servitude and the threat of extremely high interest to prevent employees from exercising their rights to seek other employment, all over jobs that pay less than a living wage
 
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Jebral

Member
Oct 29, 2017
389
I'd love to say I was shocked and stunned at the sheer gross lowness of this.

Sadly I cannot.
 

Lobster Roll

signature-less, now and forever
Member
Sep 24, 2019
34,369
This is some absolute, nuclear-grade bullshit from PetSmart. You're essentially signing a two-year employment agreement under threat of having to pay a $6,000 fine if you think about breaking it. I hope this story goes viral and that every other company using TRAP tactics are put on blast too. If the only way to retain new hires is to exploit them like you're a mafia boss or something, then you've got a serious problem with attracting & retaining talent.
 

pants

Avenger
Oct 27, 2017
3,182
Quick, choose between not making any money and indentured servitude.
 
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Planx

Planx

Member
Oct 27, 2017
1,717
so if they lay you off do you still owe that money?
Yes, you can see the clause they have people sign here

From the blog I linked in the OP
TRAP – "training repayment agreement provision" – was billed as a free job training scheme for new Petsmart hires, a 4-week program to teach you to groom cats and dogs. But this "free" program actually loaded new hires up with $5500 in debt that they owed to the company if they quit, got fired, or were laid off within two years.
 

RoadDogg

Member
Oct 27, 2017
3,062
Ignoring that she didn't receive the training that was promised, a 2 year wait to avoid payback is absurd. I've never seen a company paid MBA come with more than a 3 year payback clause and that not only costs way more than $5K but the company actually paid it. This is a made up value to spin it as a job perk, it had no actual cost to the company of the in store employees are the ones doing the training.
 

Lobster Roll

signature-less, now and forever
Member
Sep 24, 2019
34,369
Ignoring that she didn't receive the training that was promised, a 2 year wait to avoid payback is absurd. I've never seen a company paid MBA come with more than a 3 year payback clause and that not only costs way more than $5K but the company actually paid it. This is a made up value to spin it as a job perk, it had no actual cost to the company of the in store employees are the ones doing the training.
Yep. My company has the same deal for pretty much any certification you can imagine, but it's one year and it's not required at all when you become employed. Basically, it's the company's way of saying "we'll pay for your certification, but not if you're just going to leave the moment you pass".
 
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Planx

Planx

Member
Oct 27, 2017
1,717
So modern day indentured servitude?

How is this legal?
It's not in California, but is likely legal in most states. Even in California, they have employees sign Binding Arbitration agreements that prevent them from seeking justice in a court of law. Employees tried filing arbitration requests in bulk to force the company to pay for lots of arbitration cases to avoid court, so some companies, like Microsoft are including clauses that prevent this tactic


For customers in the United States, in the Binding Arbitration and Class Action Waiver section, we've added procedures if 25 or more customers file coordinated arbitrations. These arbitrations would be resolved in batches of up to 50 individual arbitrations. After each batch of up to 50 is resolved, the next batch of up to 50 individual arbitrations could be filed. We've clarified that arbitrators may award injunctions that would affect you and us only. We've also clarified that if a court finds part of this section unenforceable, an arbitrator would resolve all arbitrable claims and remedies before any court proceeding begins on remaining ones. We've given courts rather than arbitrators authority to decide more issues, including whether this section is enforceable and what it covers, and to enjoin arbitrations that don't comply with it. We've also provided that small claims court cases may be filed in your home county only.
 

machine

Member
Oct 25, 2017
1,816
I had friends that worked for EDS back in the Ross Perot days almost all of them were sucked in by this bullshit. There were even suits about it back in the late 80s. This is really what the GOP means by trickle down economics. The bullshit policies trickle down from white collar jobs to even the lowest of blue collar jobs.
 
Oct 27, 2017
12,374
Yeah, this isn't new. I've turned down several jobs because of shit like this. A few also had radial "non-compete" clauses which lasted from 2 to 5 years. Basically you can't work for anything they deem a competitor (even yourself if you go independent) in a certain miles radius for that amount of time. Those non compete ones actually standing up in court are far more questionable depending on the state according to the lawyers I consulted about them, but the training ones seem far more concrete with fucking you over.

Companies don't care about you. They are not your friends. They care about your professional development insofar as they can continue to utilize you for themselves.
 
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Planx

Planx

Member
Oct 27, 2017
1,717
Yeah, this isn't new. I've turned down several jobs because of shit like this. A few also had radial "non-compete" clauses which lasted from 2 to 5 years. Basically you can't work for anything they deem a competitor (even yourself if you go independent) in a certain miles radius for that amount of time. Those non compete ones actually standing up in court are far more questionable depending on the state according to the lawyers I consulted about them, but the training ones seem far more concrete with fucking you over.

Companies don't care about you. They are not your friends. They care about your professional development insofar as they can continue to utilize you for themselves.
What's worse about retail employees being forced into these agreements is the company has far more incentive to fire them for cause when they're 18 months into the agreement.

Come in 5 minutes late because traffic was a mess that morning? Oh that's actually against the employee handbook and you owe us $6,000. Thanks for being part of the PetsMart family!
 

Saganator

Member
Oct 26, 2017
7,056
Jesus. Kinda makes sense for highly specialized and critical positions that would also be compensated with high pay, but this is just down right evil. This makes me never want to step foot into their stores knowing they're doing this to people.
 
Oct 27, 2017
12,374
This happens in IT as well fyi
Yeah this is actually where I started to see it happening the most years ago; tech in general was rife for this kind of exploitation. My father was an IT director for decades and he talked about these sorts of policies creeping in. They also started becoming contingent to promotions for managers in sales and other marketing or business type areas under the guise of "leadership training", and then it started to bleed over into a ton of other fields that you wouldn't have necessarily expected them to be a part of for pure exploitation like this article points out.

What's worse about retail employees being forced into these agreements is the company has far more incentive to fire them for cause when they're 18 months into the agreement.

Come in 5 minutes late because traffic was a mess that morning? Oh that's actually against the employee handbook and you owe us $6,000. Thanks for being part of the PetsMart family!
That's truly vile. Honestly should be illegal, it's straight up abuse of power.
 

Volimar

volunteer forum janitor
Member
Oct 25, 2017
38,461
I remember decades ago nursing homes would train people to pass their state testing to be nursing assistants in exchange for working for them for a certain period of time.
 

psionotic

Member
May 29, 2019
2,085
What's worse about retail employees being forced into these agreements is the company has far more incentive to fire them for cause when they're 18 months into the agreement.

Come in 5 minutes late because traffic was a mess that morning? Oh that's actually against the employee handbook and you owe us $6,000. Thanks for being part of the PetsMart family!

That's just what I was thinking. At some point the incentive to the company becomes to fire pretty much everyone who signs up who isn't a guaranteed rising star, no?
 

Red

Member
Oct 26, 2017
11,686
I know people in real life who have lent money to folks, then employed them with a salary that is just under what they'd need to make to pay back the debt. Typically housing is provided, and so the employer is also a landlord. The employees keep working forever and never quite get out. It's gross. Forced servitude. This story feels just a step removed from that.
 

The Albatross

Member
Oct 25, 2017
39,028
This seems exceptionally illegal and indefensible. Another reason why petco fucking sucks. Especially given that petco was fucking killing animals a few years ago when they were getting groomed, clearly the training is shit.

In certain trades this is pretty common, I think it's mostly wrong. In auto repair, mechanics are supposed to "buy their own tools" which can be super expensive, yknow like thousands of dollars (which is actually legit, good tools cost money), and some of the big automotive mechanic shops will loan out that as part of employment and then take out from your salary for X years.
 
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Planx

Planx

Member
Oct 27, 2017
1,717
I remember decades ago nursing homes would train people to pass their state testing to be nursing assistants in exchange for working for them for a certain period of time.
And that's what these clauses were originally for, professional sectors that had legitimate, specialized training costs that the employee will benefit from even if they leave that employer.

Being taught how to sweep a floor for four weeks is a bit different though, and is no where near worth the price tag they're putting on it
 

nekkid

Banned
Oct 27, 2017
21,823
And that's what these clauses were originally for, professional sectors that had legitimate, specialized training costs that the employee will benefit from even if they leave that employer.

Being taught how to sweep a floor for four weeks is a bit different though, and is no where near worth the price tag they're putting on it
I was going to say this. There's plenty of cases I've come across in professional settings where the employer stumps up for a lot of specialised and necessary training for the employee to just disappear which is very frustrating. But the examples here aren't defensible.
 

nihilence

nøthing but silence
Moderator
Oct 25, 2017
15,932
From 'quake area to big OH.
We had similar clause at a competitor a few years ago. I think it was 1-2 years, and less money? But the training was easy longer than 4 weeks and pretty extensive. Grooming tool can be quite expensive, but they can be returned and passed on easily. The clause was more about preventing someone from getting specialized service training and opening up their own shop. They were also signing groomers with thousands of dollar bonus with similar clause too.

Abbreviation of TRAP is a huge fail.
And if they didn't get the training, that's garbage.
 

Lunchbox-

Member
Nov 2, 2017
11,906
bEast Coast
this is in every industry and nothing new

I had a degree incentive, if i got a masters program that the company was in need of i would receive a bonus and have that MBA paid by them. but it would lock me in with them for 5 years or have to pay them back. this was back in 2016, i didn't opt in

wife has a similar thing from the school she works at. they will pay for her future education but locks her in as a teacher for them for 2 years


this is how America has functioned for decades now, but guess it's seeping into retail jobs as well
 
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Planx

Planx

Member
Oct 27, 2017
1,717
this is in every industry and nothing new

I had a degree incentive, if i got a masters program that the company was in need of i would receive a bonus and have that MBA paid by them. but it would lock me in with them for 5 years or have to pay them back. this was back in 2016, i didn't opt in

wife has a similar thing from the school she works at. they will pay for her future education but locks her in as a teacher for them for 2 years


this is how America has functioned for decades now, but guess it's seeping into retail jobs as well
And those are actual skills they're paying to train you on. Retail employees aren't getting any certification, niche skills, or real education. The clause in a professional environment is there to protect the employer's actual expenses on training for a specialized role, the clause in a retail environment is there to prevent the worker from leaving for another generic retail opportunity.

It's not business as usual, it's indentured servitude as an answer to a worker-friendly job market
 
Oct 29, 2017
956
Space
At my last job I got tuition reimbursement for certifications and continuing education which I was on the hook for if left before 3 years. I left at 2 1/2ish, they sent me a letter asking for the money, I called and said I wasn't going to pay and they said "okay." That was five years ago.

I'd never sign up for a retail job with this bullshit. It's not even the same thing. What I did was an incentive that made me more marketable to other companies as well as helping my current job. This is new hire training.
 

CrocM

Member
Oct 25, 2017
9,620
$15/hour for dog grooming is insane. Its not like a retail job where you can easily work for 8 hours a day. Its difficult, and takes a toll on your body (especially hands, elbows, shoulder, etc).

And things can easily go wrong.
 

EzekelRAGE

Member
Nov 3, 2017
16,128
this is in every industry and nothing new
Yea, this is especially common in the trucking industry.

When i was with Roehl, they trained me for 4 weeks on how to drive a big rig. The training was valued at 6k. I had to sign a contract before training started, that said I would drive under them for 125k miles to pay that back OR if I left before doing that, I would owe them 6k. I completed the 125k miles. I was paid regular pay for being a new trucker and they didnt deduct my pay. I just looked at it as them making sure they got a return on their investment in my training.
 

Lothars

Banned
Oct 25, 2017
9,765
Yea, this is especially common in the trucking industry.

When i was with Roehl, they trained me for 4 weeks on how to drive a big rig. The training was valued at 6k. I had to sign a contract before training started, that said I would drive under them for 125k miles to pay that back OR if I left before doing that, I would owe them 6k. I completed the 125k miles. I was paid regular pay for being a new trucker and they didnt deduct my pay. I just looked at it as them making sure they got a return on their investment in my training.
Something like that makes sense though because they are literally training you for your a one license, This company doing it isn't defensible.
 
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Planx

Planx

Member
Oct 27, 2017
1,717
Yea, this is especially common in the trucking industry.

When i was with Roehl, they trained me for 4 weeks on how to drive a big rig. The training was valued at 6k. I had to sign a contract before training started, that said I would drive under them for 125k miles to pay that back OR if I left before doing that, I would owe them 6k. I completed the 125k miles. I was paid regular pay for being a new trucker and they didnt deduct my pay. I just looked at it as them making sure they got a return on their investment in my training.
They provided you with training for a specialized role and helped you (presumably) qualify and pass licensing for that role. That's what it's intended for

PetSmart is teaching people how to sweep a floor for 3 weeks and calling it a 4-week training program on dog grooming for a $15/hr job. It's not comparable
 

Sho_Nuff82

Member
Nov 14, 2017
18,430
$5000 to train for a minimum wage job is fucking jokes lmao. Why are companies so afraid of onboarding?
 

Spanglo

Member
Oct 29, 2017
586
I'm in the construction industry, have to pay for my certs out of pocket, but get reimbursed when I get the cert. 1 year employment after or I have to pay it back.
 

Pocky4Th3Win

Member
Oct 31, 2017
4,098
Minnesota
$5000 to train for a minimum wage job is fucking jokes lmao. Why are companies so afraid of onboarding?
It's not fear, It's a way to hold their employees and force them to not seek better employment. This would be normal training and onboarding in the past and even in other companies but many are now putting this clause in because they have terrible turn over.
 
Dec 16, 2017
1,999
I had to sign a three year agreement when my work paid for a masters degree that was transferable to other jobs.
this is in every industry and nothing new

I had a degree incentive, if i got a masters program that the company was in need of i would receive a bonus and have that MBA paid by them. but it would lock me in with them for 5 years or have to pay them back. this was back in 2016, i didn't opt in

wife has a similar thing from the school she works at. they will pay for her future education but locks her in as a teacher for them for 2 years


this is how America has functioned for decades now, but guess it's seeping into retail jobs as well
It's significantly different when retail is charging people for non-transferable training. I signed an agreement that said I would stay at my job for three years if they paid for my master's degree. It was a no brainer, because I wanted the degree anyway and worst case scenario I'd end up paying for something I would have already needed to pay for with my career.
 

Don Fluffles

Member
Oct 28, 2017
7,060
Why are we even calling this indentured servitude?

We need to normalize labeling this as just slavery, debt or no debt.
 

bye

Avenger
Oct 25, 2017
8,423
Phoenix, AZ
Lots of people keep calling this nothing new ITT are completely missing the point. This isn't your fancy IT job. This is entry level retail work making $15/hr, where at the end of the "training" (which was cut short) there's no license or certificate to show for it. There's also no way it expensed $5,000 and it's beyond unethical to hold her to that amount with those wages, living in California too. This is new for this sector in the job market and it's entirely a response to workers having more power than they have had before, and don't want to work these shit jobs that do not pay them what they are worth.
 
Oct 27, 2017
12,374
Lots of people keep calling this nothing new ITT are completely missing the point. This isn't your fancy IT job. This is entry level retail work making $15/hr, where at the end of the "training" (which was cut short) there's no license or certificate to show for it. There's also no way it expensed $5,000 and it's beyond unethical to hold her to that amount with those wages, living in California too. This is new for this sector in the job market and it's entirely a response to workers having more power than they have had before, and don't want to work these shit jobs that do not pay them what they are worth.
I won't speak for anyone else but with my saying that it's nothing new at all, I'm referring to is the fact that this has been slowly creeping into all realms of employment for a long time, and has become exploitative to force people to stay employed at a certain location regardless of whether or not you have a certificate to show for it. If you have to move away for a family emergency, you're fucked, you owe the company what you owe them for the education or training. That may have made sense in the past if they're paying to finish a major degree for you, but it's more and more becoming attached to tangential trainings as well that you may need to ascend in an organization or for promotion even in white collar roles.

So it being utilized for exploiting entry-level retail jobs like this isn't surprising, considering this trend isn't new and the only thing that is a little bit shocking about it is that it took companies this long to start enslaving entry level labor under these bullshit practices. This was an inevitable conclusion to make it's way to these jobs once it started being used as leverage to limit the options workers had in other fields of employment.
 

akilshohen

Member
Dec 8, 2017
1,308
I don't understand why they would have tried to enforce the contract when she did my even get the full training.
 
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Planx

Planx

Member
Oct 27, 2017
1,717
Lots of people keep calling this nothing new ITT are completely missing the point. This isn't your fancy IT job. This is entry level retail work making $15/hr, where at the end of the "training" (which was cut short) there's no license or certificate to show for it. There's also no way it expensed $5,000 and it's beyond unethical to hold her to that amount with those wages, living in California too. This is new for this sector in the job market and it's entirely a response to workers having more power than they have had before, and don't want to work these shit jobs that do not pay them what they are worth.
Exactly this. This is a training fee for a job that you could be fired from a day before your 2yr anniversary, and the job would not have paid you enough in those 729 days to save up for the training fee. These are basic retail jobs with no specialized knowledge holding a ransom over their employees' heads, and their only avenue for redress is private, binding arbitration with a judge getting paid by the company they are trying to fight against.

States need to act quickly to heavily penalize these agreements before they're spread to every low-wage sector
 

Damaniel

The Fallen
Oct 27, 2017
6,536
Portland, OR
TRAPs certainly have their uses - my last company would actually pay for law school and bar exams for an engineer every so often (as needed) as a way to get lawyers who were both competent in patent law and specifically knowledgeable about the company's particular technologies, in exchange for an agreement to continue working for the company for at least 2 years. Of course, this was also explicitly stated up front, so there was zero surprise about it.

Using it for minimum wage jobs as a way to force reduced attrition is pure bullshit though. Also, $5k for a dog grooming course is doubly bullshit. I hope the courts will make an example of PetSmart for this, but I'm very doubtful.
 

Surakian

Avenger
Oct 27, 2017
10,861
Lots of people keep calling this nothing new ITT are completely missing the point. This isn't your fancy IT job. This is entry level retail work making $15/hr, where at the end of the "training" (which was cut short) there's no license or certificate to show for it. There's also no way it expensed $5,000 and it's beyond unethical to hold her to that amount with those wages, living in California too. This is new for this sector in the job market and it's entirely a response to workers having more power than they have had before, and don't want to work these shit jobs that do not pay them what they are worth.
This. I'm baffled people keep saying "oh this is nothing new! I have this"

These people aren't getting masters degrees or certificates or specialized training in specialized fields with transferable skills. This is minimum wage crap with no actual value to these employees after they leave the company. This is a modern day attempt at fiefdom to trap employees into jobs that make them miserable and don't do anything to improve their skills or upward mobility.