The Labor Department is suing a healthcare staffing agency, saying it made some workers sign contracts forcing them to repay part of their wages if they quit within 3 years
A company told workers they'd have to pay high fees if they quit within three years, the Labor Department said.
In a lawsuit against the agency, the DOL said one nurse was asked to pay $24,000 in future profits.
Lawyers for the agency, ACS, said the DOL's suit is "unsupported by either the facts or the law."
The Department of Labor has filed a lawsuit against a Brooklyn staffing agency over claims some workers were told they would have to repay part of their wages if they quit before hitting the three-year mark.
The DOL said that Advanced Care Staffing, which provides healthcare companies with workers, made employees sign contracts making them work for three years or repay some of their wages to cover the company's future profits, attorneys' fees, and costs associated with arbitration.
The DOL likened employees' wages to a loan that they may have to repay to the company alongside interest and fees.
"The contracts warn employees that if they leave ACS's employ before three years' time, they will face ACS and its lawyers in an arbitration behind closed doors, where ACS will demand that employees kick back much of their hard-earned wages," the DOL wrote in the lawsuit.
The clause pushed some employees' wages below the federal minimum wage, the DOL said in the lawsuit — filed earlier in March in the US District Court for the Eastern District of New York — which Insider has viewed.
When one employee, Benzor Shem Vidal, resigned, the company told the nurse that it would seek more than $9,000 a year from him in future profits through March 2026 – more than $24,000 in total – alongside attorneys' fees and arbitration costs, according to the DOL.
The arbitrator appointed to hear Advanced Care Staffing's demands alone charges $450 per hour, the DOL said.
The agency said in the lawsuit that during his less than four months working for the company, Vidal had earned $20,372.90 in gross wages.
Vidal, who himself had filed a lawsuit against ACS in September 2022, said that he had relocated from the Philippines for the job and had quit after highlighting concerns about patient safety as well as the impact the job had had on his own mental and physical health.
Hugh Baran, a counsel for Vidal at Kakalec Law, told Insider that the arbitration provision "attempts to punish our client for leaving unsafe working conditions by saddling him with tens of thousands of dollars in the company's attorneys fees' and costs of arbitration." The Court had required ACS to pause the arbitration proceedings, he added. Vidal's lawsuit is ongoing.
The DOL said that other employees at the company have faced similar circumstances and accused ACS of "flagrant disregard" of federal law.
The DOL is seeking an injunction forbidding ACS and its CEO from reducing wages below federal minimums as well as back wages and liquidated damages for affected employees, including the nurse.
David N. Kelley, a partner at Dechert which is acting as attorneys for ACS, said that the company was "deeply troubled" by the DOL's allegations which it said were "unsupported by either the facts or the law."
Kelley said under agreements to sponsor foreign nurses, ACS had agreed to pay "substantial" fees and expenses, including towards immigration, transportation, and housing, "in return for their commitment to work for ACS for three years," after which they could either stay at the company or move to another employee.
"If either the nurse or ACS fails to fulfill their contractual commitments, either party may pursue a claim for damages through arbitration, and an arbitrator may award either party damages proven at an evidentiary hearing," Kelley added.
"To be clear, ACS has never demanded – and no nurse has ever repaid – their earned wages to ACS. "
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