Nurses union calls on FTC to investigate 'RN residency' contracts that keep new grads at hospitals for set period

National Nurses United, the largest organization of nurses in the U.S., called on the Federal Trade Commission in an Oct. 4 press release to investigate contracts many hospitals require newly hired nurses to sign as terms of employment, but which the union says can lead to harsh burdens. 

"New grad" or "nurse residency" contracts often require newly hired nurses to stay at a hospital for a number of years, and be subjected to "substantial" penalties if they resign or are terminated. 

"Often, noted NNU, the contracts are 'disingenuously dressed up as a form of enhanced education with a set cost or 'tuition,'" the release said. "But, in fact, 'the ‘education' is the mere basic on-the-job training necessary to perform the nurse’s job while the true intent of the contracts is to indenture nurses to the employers."

While they are most common for new nurses without prior hospital experience, more experienced nurses may have to sign them for specialized hospital areas. 

The union suggested a California law passed last year declaring such contracts to be unlawful to serve as a national model. 

"We believe that once these agreements have received due scrutiny, that the FTC will conclude, just as the California legislature did, that the contracts are in violation of current law and the appropriate remedies must be taken to ensure a fair playing field for nurses and hospital workers," the release said.

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