Employers are increasingly using Training Repayment Agreement Provisions (TRAPs) to replace other restrictive covenants such as noncompetes and nonsoliciation agreements. But TRAPs can be even more restrictive—and more exploitative—than noncompetes. In this article, we’ll explain what a TRAP is and how to avoid getting caught in one.
What is a TRAP?
TRAPs, also known as Training Repayment Agreement Provisions, are contractual terms that employees sign when they are hired. While the wording may vary, a TRAP requires an employee to work for a certain period of time. If the employee separates from service prior to that timeframe (whether they quit or are fired), the employee has to pay back the employer’s training costs, the costs of buying or renting equipment, or the costs of replacing the employee. Sometimes those fees are prorated depending on how long the employee has worked.
How TRAPs Hurt Employees
TRAPs can be very misleading. Often they don’t state how much the employee will have to pay back, or they don’t disclose interest accrual rates or other information a person would usually be entitled to when entering an agreement that might affect their credit. Sometimes the “training” that an employee is expected to pay for is just the orientation or legally-required videos. Sometimes the fees for such “training” are outrageous – we’ve seen TRAP fees ranging anywhere from $5,000 to $50,000. Some TRAPs accrue interest so fast there is no way an employee will ever repay it. And TRAPs usually don’t provide any exceptions in situations where, the employee quits for reasons beyond their control – like sexual harassment, disability, or lousy working conditions.
A TRAP can reduce an employee’s pay below minimum wage. It can destroy an employee’s credit. Worse, employers use TRAPs as a threat: don’t leave this job or we’ll sue you, destroy your credit, report you to immigration, and make it so you can never find another job. There’s a word for this, and it was outlawed by the 13th Amendment to the United States Constitution. 😡 😡 😡
How To Spot A TRAP
TRAPs are often hidden in piles of onboarding paperwork, so employees might not even realize they’ve signed one. They are commonly used in nursing, trucking, and service industries, but we’ve also seen them in child care and professional contexts.
The only way to know if your employer is trying to get you to sign a TRAP is to read everything before signing. This can be difficult. People get trapped into TRAPs because they are so desperate for a job that they’ll sign anything. But that’s the trap. Employers may be counting on you to sign because you just need the money, and they may pressure you to sign by acting like the job won’t be there if you take your time.
What To Do When You See A TRAP
GET LEGAL ADVICE. TRAPs are illegal in some, but by no means all, jurisdictions—there’s no way to know without consulting an employment law attorney in your area. Legal or not, if someone is pressuring you to sign a document without having an attorney review it, that’s a sign you probably shouldn’t be signing the document. No job is worth your freedom.
