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Stay-or-Pay (TRAP) Agreement
Unfair Repayment Clauses 

Employers sometimes insert Training Repayment Agreement Provisions (TRAPs) into offer letters, onboarding paperwork, or separate contracts. These “stay-or-pay” clauses sometimes require employees to repay thousands of dollars in so-called training costs if they resign—or in some cases, if they are terminated—before completing a set period of employment.

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While employers may frame stay-or-pay (TRAP) agreements as “recouping investment,” the reality is that they often:

  • Restrict worker mobility by making it financially punitive to leave.

  • Expose employees to debt collection threats for disputed “training” charges.

  • Result in derogatory credit reporting for unpaid fees.

  • Mislabel routine onboarding as expensive training.

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If you are dealing with a Stay-or-Pay (TRAP) agreement, contact us today to explore your legal rights. 

Industries Where Stay-or-Pay (TRAP) Agreements Are Common

We frequently see these agreements in:

  • Healthcare (nurses, therapists, techs)

  • Trucking & aviation (commercial driver training, pilot programs)

  • Technology sales & customer service

  • Hospitality & service industries

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These sectors rely heavily on entry-level or high-turnover positions, where TRAPs can have the harshest impact.

Why TRAPs Raise Legal Concerns

The Consumer Financial Protection Bureau (CFPB) has flagged TRAPs as a consumer risk, and state attorneys general have begun investigating abusive use of these agreements—particularly in healthcare.

 

Whether a TRAP is enforceable depends on multiple factors:

  • The true nature and value of the training.

  • Whether repayment is prorated over time or a flat penalty.

  • If repayment is triggered by any separation, even layoffs.

  • Federal and state laws that increasingly scrutinize employer-driven debt and de-facto noncompete practices.

Warning Signs of an Abusive Stay-or-Pay (TRAP) Agreement

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  • Inflated or vague “training costs” with no breakdown.

  • Repayment demanded even after being fired or laid off.

  • A repayment schedule that doesn’t decline with length of service.

  • Threats of credit damage or collections when you dispute the charges.​

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If these sound familiar, your TRAP may be unfair or unenforceable. Contact us for a free review. 

Your Rights & Next Steps

If you’re facing a stay-or-pay (TRAP) agreement demand:

  1. Save all documents (offer letter, agreement, invoices, training outlines, emails).

  2. Don’t rush to pay. Quick repayment may waive legal defenses.

  3. Record the actual training received. Was it valuable and specialized, or routine orientation?

  4. Track any collection efforts. Harassing calls, letters, or credit report entries matter.

  5. Seek legal help. Early review can protect your credit, finances, and career.

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