Jyothi Renny says she learned about her $30,000 debt when she received a phone call in January from her old employer, a health care staffing firm called MedPro International. MedPro had accused Renny of violating her employment contract by quitting too soon. What Renny didn’t know until the phone call was that the case had already gone to arbitration. Renny had lost.

“They said, ‘There is a judgment. It’s 30-something thousand dollars you have to pay,’” Renny, 50, said in an interview. 

Renny had come from India in 2021 to work as a nurse in a St. Louis hospital during the pandemic. Travel nurses’ pay was soaring, but she says she received just $27 per hour — well below market rate at the time — and struggled to support her husband and two kids in an expensive and unfamiliar country. Within three months she had exhausted her savings and was slipping into debt, she told MedPro in a resignation email. She quit and moved to Texas for a job she says roughly doubled her pay.

But under the terms of her contract, Renny could be on the hook for tens of thousands of dollars in damages if she resigned before working three years. She was also bound by mandatory arbitration, which waived her right to sue the company in court. And she had agreed to cover the company’s legal fees if an arbitrator ruled against her. MedPro had sought and won an additional $1,250 from her to pay for its attorney.

Renny is one of many foreign nurses who come to the U.S. and soon feel stuck in their jobs, thanks to what critics call “stay-or-pay” contracts. The agreements require workers to put in a minimum number of hours before leaving, or else they’ll have to pay back thousands of dollars the staffing firm says they owe for licensing, travel, housing and other expenses. The MedPro contracts viewed by HuffPost also include a mandatory arbitration clause.

Although MedPro says it served notice to Renny by both mail and email, Renny says she was unaware of the arbitration proceedings until they were over. She suspects the mail never reached her because of her move to Texas, and any emails about it may have landed in her spam folder. 

MedPro declined to address specific workers’ allegations in this story. But the company said in a statement that it incurs “major costs” getting nurses set up for U.S. employment, including educational credentialing, English proficiency exams, visa screening and immigration approval, as well as a four-week orientation program. By taking workers to arbitration, the company says, it’s merely trying to recoup a substantial investment it made.

“The process to prepare a foreign-educated nurse to work in the U.S. healthcare system is complex, costly, and takes years to complete, making it very difficult for these foreign nurses to perform on their own,” the company said. “Most simply do not have the financial means to pay for these upfront activities and without the MedPro funding, would be unable to secure a better life for themselves and their family in the U.S.”

But Rachel Dempsey, an attorney for Renny and several other former MedPro nurses, said the contracts “prey on people who don’t know very much about the United States.”  

“They don’t know what the cost of living is,” said Dempsey, whose nonprofit law firm, Towards Justice, has assisted otherworkers with employment-related debts. “They don’t know what a good salary is. And they don’t understand the U.S. legal system.”

Mandatory arbitration can present an additional challenge.

MedPro’s contract with Renny stated that “all claims” by either party “that otherwise could be brought in a federal, state, or local court” must go before an arbitrator instead. The contract also prevents workers from trying to band together in a class action lawsuit, where they might get a favorable settlement or a sympathetic jury. And it keeps the disputes largely out of the public eye, since arbitration proceedings are generally confidential and tend not to land on court dockets.

Renny says a MedPro representative told her she could ruin her credit by not paying the judgment. So she signed a settlement agreement with a payment plan: three installments of $10,000 apiece. But when her father passed away unexpectedly in India, her hopes for a family loan fell through, she said.

“I couldn’t get the money,” Renny said. “Then they went to court.”

‘Half The Things I Don’t Understand’

Companies pitch arbitration as a quick and efficient way to resolve disagreements with workers, avoiding drawn-out legal battles over claims like discrimination and wage theft. In unionized workplaces, it’s a way for employers and union representatives to hash out potential violations of a collective bargaining agreement. Both sides get some input on how the process works.

But under mandatory arbitration, workers aren’t on equal footing with the company, said Alexander Colvin, a professor of conflict resolution at Cornell University’s School of Industrial and Labor Relations. Instead, employers set the terms, and workers must accept those terms if they want the job. That’s why the practice is often called “forced” arbitration.

“Bilaterally negotiated arbitration works really well,” said Colvin, who has testified before Congress about the process. “The problem comes when it’s mandatory. There is no real employee choice in enacting these procedures. It’s take-it-or-leave-it.”

The use of forced arbitration in the workplace has spread thanks in part to a series of Supreme Court decisions stretching back to the 1990s. These days, more than 60 million workers could be bound by forced arbitration clauses, according to Colvin’s estimates. Of the employers who make arbitration mandatory, more than 30% also require workers to explicitly sign away their right to file class actions.

Some foreign-born nurses have challenged the legality of their contracts, countersuing after their employer took them to court. As a 2022 Bloomberg story detailed, nurses from the Philippines joined together in a proposed class action lawsuit against staffing agency Health Carousel, claiming the company had violated anti-trafficking law by enforcing its agreements. (The lawsuit was settled earlier this year.)

If MedPro nurses were to pursue such a claim, they would have to do so as individuals in arbitration, since they can’t file a class action suit. Many workers don’t have the means to pay a lawyer hourly out of pocket, and many attorneys might be reluctant to work without pay in the interim if the case isn’t a potential class action (with a resulting payout). In some labor cases, meanwhile, MedPro is represented by the high-powered law firm Latham & Watkins, according to National Labor Relations Board filings. 

MedPro workers also run the risk of compounding their debts by losing in arbitration and having to foot the company’s legal bills, documents show.

In one recent case, the company asked that a nurse pay not only damages for quitting but an additional $4,700: $1,500 for attorneys’ fees and another $3,200 for its arbitration filing fee and “case manager” fee, according to a filing in the case from MedPro. The arbitrator has not yet determined an award. 

In another nurse’s case, an arbitrator awarded MedPro $32,222 in damages, along with an additional $4,200 that MedPro said it was owed in legal costs for bringing the claim. Only $1,250 of that amount was listed specifically as attorney fees.

That case, like the others in this story, was overseen by the American Arbitration Association, or AAA.

AAA calls itself the “world’s largest private global provider of arbitration services.” Asked if workers could be forced to cover a company’s arbitration costs, an AAA spokesperson said usually only under “specific circumstances.” But they also said that an employment contract might allow for it, and that an arbitrator could order “any remedy or relief” that a court might provide.

Cornell’s Colvin said it’s not routine for employers to seek to recover legal fees from their workers in arbitration.

“A lot of companies don’t include that clause because it is quite punitive on the employee,” he said. “Many companies would not do that and view it as beyond the pale of what they’re willing to do.” (MedPro declined to address its use of such clauses.)

Sariga Kunnapilly, another Indian nurse hired through MedPro in 2022, says she found the American legal process overwhelming. 

Kunnapilly, 42, says she ended up at a Houston health care facility earning around $35 per hour, a figure that sounded high when she converted it to Indian rupees. But she realized she was underpaid when other nurses shared their salaries over lunch one day. She struggled to support her husband and two kids, one of whom has special needs. After she quit, she says MedPro took her to arbitration.

“They were not truthful regarding expenses and the way America is,” Kunnapilly said in an interview. “They were trying to hide the reality.”

As a new immigrant to the U.S., she found the contract language and arbitration process dizzying.

“Half the things I don’t understand,” she said. “It’s like an iceberg. Underneath, it’s so complicated.” 

Steering workers into arbitration can help a company avoid bad publicity. In 2018, MedPro settled a counter-lawsuit filed by a Filipino nurse who MedPro had sued for over $150,000. A Miami Herald story about the case had the words “indentured servant” in the headline. As part of the settlement, MedPro agreed not to seek more than $40,000 from any worker for allegedly violating a contract.

MedPro declined to say when it began requiring nurses to sign arbitration agreements. Only last year did the company start taking workers to court to enforce arbitration awards in Broward County, Florida, where MedPro is based.

One of those workers, nurse Nishanth George, was found to owe MedPro $35,556 in damages and another $3,451.71 in legal costs. But like Renny, George said he didn’t receive notice of his arbitration proceedings until they were over. He was referred to as a woman in the arbitration filings, even though he is a man.

George said he first learned of the case when he was served notice of MedPro’s effort to collect the arbitration award.

“Only at that time did I come to know that an arbitration had happened and there was a judgment against me,” George, 39, said in an interview.

Like Renny, he believes he never received mail about the arbitration because he’d also moved after quitting.

He served as his own attorney against MedPro in Broward County, accusing the company of a bait-and-switch. George claimed the original contract he signed in 2018 did not threaten him with a $40,000 debt if he quit. But the company presented him with a second contract in 2019, after he’d already gotten rid of his home in India and prepared to immigrate to the U.S., he alleged. He said he felt “no other option” but to sign it.

“I resigned from MedPro International due to a profound feeling of forced labor, which I believe compromised the ethical and professional principles I hold dear,” he wrote in a court filing.

After George said he was never made aware of the arbitration proceedings, MedPro asked the judge to vacate the award against him out of “an abundance of caution.” Represented by an attorney, George ended up reaching a confidential settlement with MedPro.

Mark Gough, an associate professor at Penn State’s School of Labor and Employment Relations who researches arbitration, said there’s often a disconnect between how the process is portrayed and how it plays out in the real world.

“In theory, arbitration is great. … However, I think the branding should match the reality,” Gough said. “Precarious workers are having to engage in an asymmetrical fight that’s seemingly exacerbated by arbitration.”

‘Weaponizing’ Arbitration

AAA said it could not discuss particular cases it oversees, citing privacy reasons. But asked how it makes sure people like George and Renny are aware that there are arbitration proceedings against them, the group said it has specific rules for employers to serve notice to workers about their cases. Any party must be given “reasonable opportunity to be heard with regard to the dispute,” the group said.

AAA stopped handling consumer debt collection cases years ago. But Dempsey said the MedPro cases amount to just another kind of debt collection and argued the group should decline to take them. She accused AAA of allowing itself to be “weaponized” in a “scheme to procure forced labor.” 

“The arbitration itself is a part of that overall scheme,” she said. “Maybe inadvertently, but they’re complicit overall in that system to pressure nurses to stay in their jobs.”

AAA said it is “committed to providing a fair and effective dispute resolution forum” and takes such claims seriously.

With limited options in federal or state court, some former MedPro nurses have filed charges against the company with the National Labor Relations Board, the federal agency that enforces collective bargaining rights. They allege that MedPro used arbitration to pressure them into accepting debt settlements with “draconian” confidentiality and non-disparagement clauses. They claim MedPro was running a “weaponized arbitration mill.”

NLRB officials haven’t determined yet whether the MedPro nurses’ charges have merit. But the board’s prosecutor has gone after a medical spa chain for allegedly trying to make its aestheticians pay back at least $50,000 in training costs after quitting. That company agreed to pay more than $25,000 to two workers in a settlement.  

MedPro said it doesn’t intimidate employees, “nor does it coerce them into settlement agreements.”

“We believe these charges lack merit and will vigorously defend our position,” the company said. 

Renny said life in America is much better since she took her new job in Texas. She feels fairly compensated, and there’s no shortage of nursing positions in the area if she wants to switch. But had she known what she would face in her first few months in a new country, she might never have uprooted her family.

“I was having a very good life in India and thinking I would have a better life here,” she said. “But it was all miserable.”