Legal Groups Say These Controversial Work Contracts Amount To ‘Indentured Servitude’

The ACLU is urging the American Arbitration Association to stop handling disputes involving “stay or pay” contracts that leave workers in debt.

The American Civil Liberties Union and other legal groups are pressing a major arbitration provider to stop enforcing workers’ employment debts, saying the cases amount to “indentured servitude.”

The ACLU sent a letter Monday to the American Arbitration Association, or AAA, urging the group not to hear disputes involving “stay-or-pay” agreements. Such contracts require workers to put in a minimum amount of hours before quitting or else they’ll have to pay the employer thousands of dollars to cover travel, training and other alleged costs.

As a HuffPost article detailed last year, foreign-born nurses who quit their U.S. jobs are being taken to arbitration and forced to pay thousands of dollars to the staffing firm that recruited them, a company called MedPro International. Nurses claim they were misled about how much money they would earn in the U.S. and resigned out of desperation.

The employment contracts include a mandatory arbitration clause, which keeps the disputes out of court and prevents nurses from banding together to counter-sue in class-action lawsuits.

One nurse from India told HuffPost she never received notice of her arbitration proceedings until they were over; the judgment against her came to $30,000, plus attorney’s fees to defray the company’s litigation costs. The case was overseen by the AAA, a nonprofit that bills itself as “the world’s largest private global provider of arbitration services.”