Providing Developments & Insight on Trending Topics in Employment Law

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Providing Developments &amp; Insight on Trending Topics in Employment Law

A major U.S. hospital operator recently agreed to pay approximately $3.5 million to settle claims that it unlawfully trapped nurses in agreements requiring them to repay their employers for job-related training costs if they terminated their employment within a certain period of time. Such agreements are something that many employers enter into with their employees, so employers should beware.

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Specifically, the settlement applied to two cases in which the California and Colorado the governments claimed that state consumer protection laws applied to training repayment agreements required by HCA hospitals. The California case, <em>State of California v. HCA Healthcare, Inc., and HealthTrust Workforce Solutions, LLC</em>, Case No. 25CV471131 (Superior Court, Santa Clara, July 24, 2025), alleged that the defendants’ training repayment program violated California’s Business and Professions Code Section 17200. The Colorado case, <em>State of Colorado, ex rel. Philip J. Weiser, Colorado Attorney General v. HCA Healthcare, Inc., and HealthTrust Workforce Solutions, LLC</em>, Case No. 2025CV32618 (Dist. Ct. Denver, July 24, 2025), alleged that the defendants’ training repayment program violated the Colorado Consumer Protection Act, C.R.S. § 6-1-105(1)(rrr). A similar claim against HCA Healthcare Inc. and HealthTrust Workforce Solutions LLC was also settled with the Nevada attorney general. In total, the defendants agreed to pay approximately $2.9 million in penalties and more than $580,000 in restitution for nurses that HCA Healthcare Inc. employed in those states.

Both the California and Colorado governments focused in part on the fact that HCA Healthcare Inc. required newly graduated registered nurses (RNs) to complete a training program before qualifying for employment at HCA healthcare facilities. The training program – administered by HealthTrust Workforce Solutions LLC, an affiliated entity of HCA Healthcare Inc. – was not associated with a certification or license required by federal or state law for RNs. In fact, candidates for employment who participated in the required training were already licensed RNs.

Another key factor was that RNs who failed to complete a minimum period of employment with the HCA facility were required to pay back a prorated cost of the training, including through a deduction from their final paycheck. Both California and Colorado asserted that the RNs were not fully informed of the training reimbursement obligation early enough in the process. According to the California and Colorado governments, these factors resulted in legal violations.

In the past several years, government agencies and interest groups have increasingly scrutinized employment agreements that require employees to reimburse their employers for job-related training and other preemployment costs if they quit or are fired before a certain period of time. Opponents label these “TRAP” (Training Repayment Agreement Provision) agreements, claiming that the repayment obligation traps unknowing employees into continued employment. On the other side, proponents note that these agreements require employers to make significant up-front investments in employees by funding licenses and certifications necessary for employment. Such investment particularly benefits low-income employees, for whom the cost of a professional license or certification presents a tall barrier to entering the profession.

Employers can offer financial assistance that is clear and fair and benefits both employees and employers. &nbsp;If you’re interested in learning more about how best to implement policies pertaining to repayment obligations, or how to draft legally compliant agreements incorporating them, feel free to reach out to BakerHostetler’s Wage and Hour Practice team.

Millions of Dollars Paid by Major Hospital Operator Due to Alleged Unlawful Training Repayment Agreements