Region 29-Brooklyn Secures Settlement Requiring Plumbing Company Rescind Training Repayment Agreement and Pay $81,000 to Employees

On November 4, 2024, Region 29-Brooklyn obtained a settlement agreement against Maxwell Plumb Mechanical Corp. (Employer), a plumbing and HVAC company located in Glendale, New York. The agreement settles three unfair labor practice charges filed by Plumbers Local Union No. 1, United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada (Union) alleging that the Employer required employees to sign an unlawful “stay-or-pay” contract or “training repayment agreement provision” (TRAP), unlawfully terminated three employees, and unlawfully interfered with employees’ union and protected activities.

Pursuant to the settlement agreement, the Employer must reinstate three unlawfully terminated employees and make them whole by paying a total of $81,000, which includes compensation for back pay and financial harms that they suffered because of the Employer’s conduct. In addition, the settlement provides that the Employer will cease requiring employees to reimburse the Employer for training costs if the employees stop working for them; that its supervisors and managers attend a training on employee rights under the National Labor Relations Act to be conducted by an Agent of the National Labor Relations Board; and that the Employer physically and electronically post a Notice to Employees with information about their rights under the National Labor Relations Act.

Expanding on her May 2023 memo regarding overly broad non-compete agreements that chill employees in the exercise of their rights under Section 7 of the Act, which protects employees’ rights to take collective action to improve their working conditions, in October 2024, General Counsel Jennifer Abruzzo issued a memo explaining her position that “stay or pay” agreements and training repayment agreement provisions (TRAPs) similarly “have serious potential for suppressing union and other concerted activities for mutual aid or protection, including by impairing job mobility.”

The Agency has entered into memoranda of understanding with the Federal Trade Commission, the Department of Justice’s Antitrust Division, and the Consumer Financial Protection Bureau in order to advance a whole of government approach to the anticompetitive effects of restrictions on mobility.

“I applaud the great work of Region 29 staff investigating the charges and obtaining this excellent settlement,” said NLRB Region 29 Regional Director Teresa Poor. “Stay-or-pay provisions have serious potential for suppressing union organizing and other concerted activity for mutual aid or protection, including by impairing job mobility. These hard-fought remedies are a critical part of effectuating the National Labor Relations Act.”

Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees, employers, and unions from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions. The NLRB conducts hundreds of workplace elections and investigates thousands of unfair labor practice charges each year. Region 29 serves areas in New York from its Regional Office in Brooklyn.