Category: MEDIA

Regulatory policy group highlights the implications and consequences of the Supreme Court’s decision to overturn Chevron v. NRDC

WASHINGTON, DC — Governing for Impact Executive Director Rachael Klarman released the following statement:

“The Supreme Court’s decision is the latest in a line of extreme decisions that puts the interests of corporate law breakers, polluters, and anti-labor activists over the interests of the American people. However, the immediate impact of today’s decision may be limited. The Supreme Court has not relied on Chevron in a number of years. As a result, the Court has already dramatically intruded into the policy making process an area once thought to properly belong under the purview of the two democratically elected branches of the federal government and courts around the country have followed their lead, increasingly eschewing Chevron deference. The Biden Administration has also smartly been preparing for Chevron’s formal demise over the last four years and has not relied on the doctrine to defend its rules.

As a result, Loper Bright’s impact will depend on how we respond. Rather than self-limiting, advocates must continue to urge federal agencies to use every legal authority at their disposal to enact strong rules that protect consumers, workers, and the public.”

About Governing for Impact

Governing for Impact (GFI) is a regulatory policy organization dedicated to ensuring the federal government works for working Americans, not corporate lobbyists. The policies we design and the legal insights we develop help increase opportunity for those not historically represented in regulatory policy implementation work: working people. For additional information about GFI, please visit https://governingforimpact.org/.

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Government agencies should use existing regulations and powers to regulate AI, argues a new report from the Center for American Progress and Governing for Impact shared first with Axios.

A new report warns of “increasingly aggressive tactics” by employers, while calling for greater transparency on anti-union spending.

Advocacy groups offer a road map for how agencies can use existing authority to ban contracts that force workers to pay employers if they leave their job.

Legal memo proposes how DOL can protect healthcare workers and patients from restrictive labor practices

WASHINGTON, DC — Today, Governing for Impact (GFI), Towards Justice (TJ), the Student Borrower Protection Center (SBPC), and the American Economic Liberties Project (AELP) issued a memo urging the Department of Labor (DOL) to prohibit employers from issuing restrictive employment contracts on their workers that would require them to pay their employer if they resign, are terminated, or attempt to find another job.

Stay-or-pay contracts force workers to pay their employers if they leave – or are fired from – a job within a certain time frame. Used in tandem with, or in lieu of, non-compete clauses, which prohibit employees from obtaining a new position in their given industry, stay-or-pay contracts have been shown to reduce workers’ mobility and stifle competition. The threat of financial penalties upon resignation or termination dissuades workers from speaking up about unsafe working conditions, which, in the healthcare industry, can lead to increased rates of employee burnout, more toxic work environments, higher incidence of medical error, and poorer patient outcomes.

“The healthcare industry’s use of stay-or-pay contracts has led to egregious violations of worker rights and dangerous increases in workplace and patient safety, ” said Reed Shaw, Policy Counsel at Governing for Impact. “The Department of Labor has a responsibility to take immediate steps to protect our nation’s healthcare workers, whether they are trained here or abroad.”

Stay-or-pay contracts are increasingly common among healthcare employers that recruit foreign-educated nurses (FENs) to work in the United States. These exploitative agreements often require FENs to commit to a single employer for 18 months to three years. If the FEN leaves the employer before the time is up, the employer charges a “breach fee,” which can amount to tens of thousands of dollars. This type of employer practice exploits an already vulnerable workforce, as employers also often mislead FENs as to the immigration consequences if they leave their jobs. 

Stay-or-pay contracts also have adverse impacts on U.S. nurses, who may be forced to accept lower wages and poor working conditions from employers who know that they can always turn to a vulnerable and captive foreign-born workforce instead.

In the legal memo, GFI and its partner organizations recommend that the DOL uses its authority under the Immigration and Nationality Act (INA) to update labor certification regulations to prohibit employers from subjecting their workers to stay–or-pay contracts. The DOL has issued several similar regulations in the past, including, for example, prohibiting immigrant workers from paying the costs of their own labor certification.

About Governing for Impact

Governing for Impact (GFI) is a regulatory policy organization dedicated to ensuring the federal government works for working Americans, not corporate lobbyists. The policies we design and the legal insights we develop help increase opportunity for those not historically represented in regulatory policy implementation work: working people. For additional information about GFI, please visit https://governingforimpact.org/.

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Advocacy groups are lobbying the Department of Health and Human Services to ban health care facilities from using noncompete agreements if they receive Medicare or Medicaid funding.

Noncompete agreements, common in the health care industry, prevent doctors from quitting and going to work for rivals. A similar contract provision, known as “stay-or-pay,” requires workers to pay their employer if they leave their job before a set date.

Legal memo proposes how HHS can protect healthcare workers and patients from the harms of such contracts

WASHINGTON, DC — Today, Governing for Impact (GFI), Towards Justice (TJ), the Student Borrower Protection Center (SBPC), the American Economic Liberties Project (AELP), and the AFT Healthcare labor union issued a memo urging the Department of Health and Human Services (HHS) to issue a new Condition of Participation (CoP) that would ban non-compete clauses and “stay-or-pay” contracts at facilities that receive Medicare and Medicaid funding.

Stay-or-pay contracts force workers to pay their employers if they leave – or are fired from – a job within a certain time frame. Used in tandem with, or in lieu of, non-compete clauses, which prohibit employees from obtaining a new position in their given industry, stay-or-pay contracts have been shown to reduce workers’ mobility and stifle competition. The threat of financial penalties upon resignation or termination dissuades workers from speaking up about unsafe conditions for themselves and their patients and increases rates of employee burnout and toxic work environments, which can lead to medical error.

“Stay-or-pay contracts have contributed to dangerous conditions and pose significant risks to patients and to healthcare workers across the country, ” said Reed Shaw, Policy Counsel at Governing for Impact. “HHS has the authority to act to make our hospitals and other healthcare facilities safer. ”

Non-compete and stay-or-pay contracts are most frequently used in less desirable hospitals with unsafe working or patient care conditions. HCA Healthcare, the largest for-profit healthcare employer in the world with 184 hospitals and 2,000 sites of care in the US and UK, is one example.  

Although the company claims to have ceased the practice, as recently as 2022, newly hired registered nurses at a number of HCA Healthcare hospitals were required to sign contracts that obliged them to take out a $10,000 promissory note for training program costs. Similar contracts are used at Tenet Healthcare and MedStar Health, for which the payback amounts range from $5,000 to $50,000. 

In the legal memo, GFI and its partner organizations explain how the Centers for Medicare and Medicaid Services at HHS could invoke its statutory authority to regulate the use of traditional non-compete clauses and stay-or-pay contracts in the healthcare industry. HHS has issued numerous rules to update CoPs in the past for facilities that accept Medicare and Medicaid, in response to issues like technological advancements and staffing issues. 

The Supreme Court recently affirmed HHS’ authority to set Medicare CoPs in Biden v. Missouri, in which the court upheld the administration’s vaccine requirement for healthcare workers. A CoP rule that would disallow or regulate stay-or-pay agreements for healthcare workers would be well in line with the scope of the HHS Secretary’s CoP-setting authority “in the interest in the health and safety” of patients.

The Biden administration is facing new pressure to investigate and take action to ban “exploitative” employment contracts in the airline and trucking industries.

Labor, legal groups ask Department of Labor to clarify that such contracts can violate the Fair Labor Standards Act

WASHINGTON, DC — Today, Governing for Impact (GFI), Towards Justice (TJ), the Student Borrower Protection Center (SBPC), the American Economic Liberties Project (AELP), and 16 other organizations sent a letter to the Department of Labor (DOL) urging the agency to clarify that “stay or pay” contracts – in which workers are forced to repay employers if they leave their job within a certain time frame – can violate the Fair Labor Standards Act (FLSA). Stay-or-pay contracts are an increasingly common form of employer-driven debt. They operate as de facto non-compete agreements, and have been shown to reduce workers’ mobility, limit workers’ organizing power, and encourage unsafe working conditions. 

“Stay-or-pay policies trap workers in low-wage jobs and unlawfully force them to take on thousands in debt that deprives workers of unconditional minimum wage and overtime pay,” said Rachael Klarman, Executive Director at GFI. “The Fair Labor Standards Act is designed to protect workers from exactly these types of harms, and we urge the Biden Administration to ensure it is enacted as intended.” 

“We’re proud of our work fighting around the country with nurses, pilots, pet groomers, physical therapists and so many others challenging the predatory stay-or-pay contracts that keep them trapped in their jobs and shift corporate costs onto workers,” said David Seligman, Executive Director of Towards Justice. “If employers want to retain their workers, they should do so by paying them more and treating them better, not saddling them with debt indenturing them to their bosses. The Biden Administration should do even more to clarify that these coercive contracts violate our most hard-fought labor protections, including the minimum wage laws.”

“Stay-or-pay contracts, including those with Training Repayment Agreement Provisions or TRAPs, reveal an ugly truth about some of the biggest corporations in America: exploiting workers is cheaper and easier than investing in their talent,” said Mike Pierce, Executive Director of the Student Borrower Protection Center. “Fortunately for workers and honest businesses, the Biden Administration has the legal tools necessary to drive stay-or-pay contracts out of the economy.”

“De facto non-compete agreements like stay-or-pay agreements are just another way that employers take advantage of their power over workers, preventing them from leaving for better opportunities,” said Erik Peinert, Research Manager and Editor at Economic Liberties. “The Biden administration has called for a whole of government approach to banning non-competes, and it is critical that the Department of Labor use every authority at its disposal to do so.”

Estimates suggest that stay-or-pay contracts are growing increasingly common in low-wage industries – with serious impacts on worker safety, mobility, and financial security. PetSmart, for example, requires low-wage dog groomers to sign stay-or-pay contracts as part of their hiring process. If workers quit within two years, PetSmart may use debt collectors to pursue up to $5,000 in training costs. Many of the largest trucking companies also require drivers to pay back up to $6,000 for so-called “training” – despite evidence that this training is often conducted in dangerous conditions and provides limited transferable skills. Stay-or-pay contracts are also common in the airline industry: pilots that leave cargo airline company Ameriflight within 18 to 24 months of service can owe the company up to $30,000.

In a letter to the DOL’s Wage and Hour Division (WHD), GFI, TJ, SBPC, AELP, and 16 other organizations requested an Administrator’s Interpretation clarifying how stay-or-pay contracts violate the FLSA. Specifically, the groups argue that stay-or-pay contracts can constitute unlawful “kick-backs” to employers and deprive workers of minimum wage and overtime pay that must be paid “free and clear” of conditions or obligations to repay.

While the Department of Labor is currently pursuing FLSA litigation against particularly egregious stay-or-pay contracts, official agency guidance would put employers on notice and help employees vindicate their rights under the law. Such an interpretation would be well within the authority of the WHD, which has issued numerous similar interpretations to clarify employee rights and obligations under the FLSA. 

“We applaud the DOL’s recent actions to combat exploitative stay-or-pay contracts – but there’s more it can do,” said Reed Shaw, Policy Counsel at Governing for Impact. “Without a check on unlawful employer power, stay-or-pay contracts reduce competition in the labor market, trap workers in low-wage jobs, and limit organizing power. We encourage the Department of Labor to clarify FLSA regulations and protect American workers.”

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About Governing for ImpactGoverning for Impact (GFI) is a regulatory policy organization dedicated to ensuring the federal government works for working Americans, not corporate lobbyists. The policies we design and the legal insights we develop help increase opportunity for those not historically represented in regulatory policy implementation work: working people. For additional information about GFI, please visit https://governingforimpact.org/.

Two of the country’s biggest unions have joined a coalition calling on federal regulators to protect workers’ mental health the way they enforce standards for physical health and safety.

Why it matters: The press comes amid widespread post-pandemic burnout, growing awareness of the country’s worsening mental health and some of the strongest pro-union sentiment in decades.

Driving the news: A letter sent Wednesday to the Occupational Safety and Health Administration from David Michaels, who led the agency under President Obama, argues that “the agency’s grant of authority from Congress includes the power to protect workers’ mental health from workplace hazards.”