News and Events

Press Release: Groundbreaking Lawsuit against Petsmart Alleging Illegal Training Repayment Agreement

News Abuses of Corporate Power Abusive Debt Collection

July 28, 2022 | San Mateo, CA — Today, BreAnn Scally, a former PetSmart pet groomer filed a groundbreaking class action lawsuit against the retail pet supply giant, alleging that the firm is engaged in a scheme to trap trainee pet groomers in their low-wage jobs by levying thousands of dollars in abusive and unenforceable debts against them. These illegal debts arise from Training Repayment Agreement Provisions (TRAPs)—contracts that put workers on the hook to repay employers for costs associated with worker training or education. Although these predatory contract terms have existed for decades, TRAPs have become more common across the economy, as companies look for new ways to undermine worker bargaining power. Ms. Scally is represented by Towards Justice and Jubilee Legal, with support from the Student Borrower Protection Center (SBPC).

Today’s lawsuit alleges that PetSmart uses a TRAP to limit groomers from seeking out better working conditions, locking low-wage workers for years into high-volume groomer jobs that can be grueling and dangerous. For groomers who quit within two years of training, PetSmart may use debt collectors to pursue them for training debts that can total more than $5,000.

The complaint alleges that, whether PetSmart’s TRAPs are analyzed under employment or consumer law, they are illegal. If the training PetSmart provides its employees is primarily job training for PetSmart’s own benefit, then employment law prevents that cost from being passed off on workers. And if the training provides groomers with transferable skills for personal use, then PetSmart is operating an unapproved for-profit college illegally in California, and seeking to collect on an unlawful and unenforceable debt. Either way, the effect is that workers may be trapped in their jobs against their will, unable to exercise their fundamental right to control who they work for.

A copy of the complaint in Scally v. PetSmart, filed today in California Superior Court, is available here.

“PetSmart needs to come up with a better way for employees to want to become better groomers instead of trapping them with unfair debt,” said BreAnn Scally, a former PetSmart groomer in Salinas, California and the plaintiff in Scally v. PetSmart. “I had gotten my credit score up, and now I have to start all over again. It’s brought me back down to square one.”

“PetSmart is just another company cynically engineering new forms of student debt as a tool to trap workers,” said SBPC executive director Mike Pierce. “Rather than compete on wages and benefits in a tight labor market, PetSmart turned to contractual tricks to lock its employees into a hamster wheel of financial harm. Today’s action should send a clear warning to anyone interested in turning on-the-job-training into a debt trap: keep your paws off working people’s livelihoods.”

“The ability to move between jobs for better working conditions or higher pay is one of the best tools workers have to protect themselves and seek out a better life,” said Rachel Dempsey, an attorney at Towards Justice. “Debt traps like PetSmart’s exploit employer power to punish workers for exercising their basic right to choose where they work.”

“Petsmart runs its Grooming Academy like an old-fashioned company store, keeping its employees on a short leash by keeping them in debt,” said Sparky Abraham, founder at Jubilee Legal. “PetSmart’s employee debt TRAP is unlawful, and it’s past time for them to clean up their act.”

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About Towards Justice

Towards Justice is a nonprofit legal organization that uses impact litigation, policy advocacy, and collaboration with workers and worker organizations to build worker power and advance economic justice.

Learn more at towardsjustice.org or follow Towards Justice on Twitter @TowardsJustice.

About Student Borrower Protection Center

The Student Borrower Protection Center (SBPC) is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. The SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.

Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.

About Jubilee Legal

Jubilee Legal is a debtor and consumer rights law practice based in Oxnard, California, and focused on helping people understand their rights, overcome the stigma of debt, and exercise collective power in the financial system.

Learn more at jubilee.legal or follow Jubilee Legal on Twitter @JubileeLegal.

Press Contact:
Jackie Filson, jackie@protectborrowers.com
Rachel Dempsey, rachel@towardsjustice.org