Labor & Employment Law Daily Wrap Up, AGENCY NEWS—Members of Congress request agency information on employer-driven debt agreements, (Dec 1, 2025)

By Shashi Kant, BALLB, LLM.

A pair of lawmakers seek details from four agencies on investigations, enforcement, and policies related to employer-driven debt agreements, including TRAPs and stay-or-pay contracts.

U.S. Rep. Summer Lee (D-Pa.) and Sen. Ed Markey (D-Mass.) issued letters to the Consumer Financial Protection Bureau (CFPB), Department of Labor (DOL), Federal Trade Commission (FTC), and National Labor Relations Board (NLRB) requesting information from each agency regarding actions, investigations, enforcement activities, and policy positions related to employer-driven debt arrangements, including Training Repayment Agreement Provisions (TRAPs) and other stay-or-pay contracts. The letters state that TRAPs have expanded in use, that multiple agencies previously addressed these arrangements, and that congressional oversight is being initiated to obtain information about current federal activity involving these agreements. Representative Lee released a public statement summarizing the letters and identifying additional members of Congress who signed them.

The letters request written responses from each agency by December 19, 2025.

TRAPs and reported trends. The letters cite research indicating that TRAPs apply to 1-in-12 workers in the United States and that usage increased from 4.1 percent in 2014 to 8.7 percent in 2020. TRAPs are described as agreements that require repayment of training, equipment, or alleged lost profits if a worker leaves employment before a specified date. The letters cite repayment demands up to $75,000 and examples where required repayment exceeded worker earnings.

Requests directed to the CFPB. The letter to the CFPB references a prior Bureau statement indicating that TRAPs and employer-driven debt would be evaluated for potential violations of consumer financial laws. It notes that a multistate settlement involving HCA Healthcare referenced a joint investigation conducted with the CFPB, although the Bureau did not participate in the settlement. The letter asks for information on complaints received, investigations opened, investigations closed, enforcement actions, and factors influencing decisions not to pursue cases involving employer-driven debt.

Requests directed to the DOL. The letter to the DOL references prior litigation and public statements by the Department concerning stay-or-pay agreements and cites the 2024 Enforcement Report regarding employer recovery of training-related costs. It references a case involving Smoothstack and notes that settlement terms have not been made public. The letter requests information on complaints received, investigations conducted, cases filed, cases withdrawn, settlements reached, the issuance of any opinion letters, and any changes to DOL interpretations concerning TRAPs.

Requests directed to the FTC. The letter to the FTC references the agency’s final rule banning non-compete agreements and certain TRAPs and notes the FTC’s later decision to seek dismissal of its appeal in litigation involving that rule. The letter asks for information on complaints, investigations, lawsuits, decrees, settlements, staffing assigned to these matters, and the agency’s plans concerning notice-and-comment requirements. It also requests an explanation of how individual enforcement actions would compare to the market-wide non-compete rule.

Requests directed to the NLRB. The letter to the NLRB references prior settlement activity involving TRAPs and a General Counsel memorandum (GC 25-01) that provided direction on these agreements and was later rescinded. The letter asks for information on current handling of complaints involving stay-or-pay agreements, amendments or exceptions to allegations, factors considered in case evaluation, merit determinations, settlements, and the status of open and closed TRAP-related matters.

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