The California Attorney General announced a settlement with HCA Healthcare, Inc. and Health Trust Workforce Solutions, LLC (together, HCA), resolving allegations that HCA unlawfully required entry-level nurse employees to repay the cost of a mandatory training program if they did not remain employed with the company for two years. HCA is one of the nation’s largest hospital systems and has several hospitals in northern and southern California.

The settlement is the result of a years-long investigation by the California attorney general and the attorneys general of Colorado and Nevada, working in partnership with the Consumer Financial Protection Bureau. The states’ investigation found that HCA violated California employment and consumer protection laws as well as the federal consumer financial protection laws by using training repayment agreement provisions (TRAPs) in nurses’ employment contracts.

These TRAPs are a form of employer-driven debt, or debt obligations incurred by individuals through employment arrangements.

As a condition of employment at an HCA hospital, HCA generally requires that entry-level nurse employees complete the Specialty Training Apprenticeship for Registered Nurses (StaRN) Residency Program. The company has advertised StaRN as an avenue for entry-level RNs to get the education and training they need to land their first nursing jobs in an acute-care hospital setting, although StaRN does not provide nurses with education or training necessary for licensure as an RN.

Until the Spring of 2023, HCA required that RNs hired through the StaRN program at facilities in several states, including California, sign a TRAP agreement in their new-hire paperwork. The TRAPs purported to require nurses to repay a prorated portion of the StaRN “value” if they did not work for HCA for two years. If a nurse left HCA before the end of the two-year period, then the TRAP loan was typically sent to debt collection.

HCA imposed TRAPs on nurses who worked at their five hospitals in California: Good Samaritan Hospital in San Jose; Regional Medical Center in San Jose; Los Robles Regional Medical Center in Thousand Oaks; Riverside Community Hospital in Riverside; and West Hills Hospital & Medical Center in West Hills (no longer under HCA ownership).

Under California’s settlement, HCA will:

– – Pay approximately $83,000 to provide full restitution to California nurses who made payments on their TRAP debt to HCA.
– – Be prohibited from imposing TRAPs on nurse employees and attempting to collect on the approximately $288,000 in outstanding TRAP debt incurred by California nurses who signed TRAPs with HCA.
– – Pay $1,162,900 in penalties to California.

HCA will pay a total of $2,900,000 in penalties under settlements filed in California, Colorado, and Nevada today.

Employer-driven debt refers to debt incurred by individuals through employment arrangements. This can include arrangements where an employer provides training, equipment, or supplies to a worker, but requires the worker to reimburse the employer for these expenses if the worker leaves their job before a certain date. Employer-driven debt has grown not only in the healthcare industry but also in the trucking, aviation, and the retail and service industries, among others. However, California workers are protected by state law that restricts the use of employer-driven debt, as Attorney General Bonta highlighted in a legal alert issued in July 2023 and a consumer alert in October 2024. Workers who believe their rights have been violated are encouraged to file a complaint at oag.ca.gov/report.