Key Points

• State attorneys general have increased enforcement actions and several states have passed or advanced legislation targeting employee training repayment agreement provisions, or TRAPs.
• These developments signal heightened legal risk for employers — especially in health care and other industries using TRAPs — who may face penalties or litigation if their contracts are noncompliant.
• Companies should consider reviewing and updating employment agreements to ensure compliance with evolving state and federal laws, and closely monitoring ongoing regulatory and enforcement trends regarding TRAPs.

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On September 5, 2025, the Federal Trade Commission (FTC) notified the U.S. Court of Appeals for the Fifth Circuit that it will no longer pursue its appeal in Ryan, LLC v. FTC, where a district court struck down its recently promulgated noncompete clause rule. However, while the FTC has acceded vacatur, companies should be aware of recent trends in state enforcement of certain types of noncompete clauses.

A recent high-profile enforcement action as well as new legislation in a number of states suggest that state attorneys general are looking to rein in contracts — such as training repayment agreement provisions (known as TRAPs) — that require employees to pay back certain expenses if they leave the company within a certain time frame.

States Move To Enforce and Regulate TRAPs

In July 2025, the attorneys general of California, Colorado and Nevada announced a...

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