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.
www.wired.com
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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