Jonathan F. Harris (Temple University Beasley School of Law) has posted The New Indentured Servitude (Georgetown Law Journal, Vol. 115, forthcoming 2027) on SSRN. Here is the abstract:
Workers across the United States are increasingly bound by employment contracts that courts, policymakers, advocates, and the workers themselves are calling “modern indentured servitude.” These “stay-or-pay” contracts require workers to pay thousands or tens of thousands of dollars if they leave before completing a specified term of employment. They take multiple forms, including Training Repayment Agreement Provisions (TRAPs) that require reimbursement for putative training costs, liquidated damages clauses triggered by early departure, and clauses demanding that the worker pay the employer’s “lost profits.” At least one in thirteen U.S. workers is bound by a stay-or-pay provision, which is frequently woven together with other restrictive covenants to trap a worker in a web of immobility.
The repeated invocation of “indentured servitude” runs through the litigation, regulatory enforcement, and legislative debates surrounding stay-or-pay clauses. The Article thus answers calls to extend Thirteenth Amendment scholarship into the modern labor context by analyzing examples of new stay-or-pay contracts through the free labor tradition. That tradition, though debated in its overall meaning, includes the positive rights to quit and to change employers. A stay-or-pay contract that functionally prevents a worker from quitting and changing jobs violates this free labor principle under the Amendment.
By the mid-nineteenth century, Americans came to view indentured servitude as incompatible with freedom. A similar normative evolution is underway today with stay-or-pay contracts, as there is a broad recognition that the formal right to quit is meaningless when exercising it can lead to financial ruin. Free labor theory combined with the “new indentured servitude” terminology is helping to move courts to deny enforcement of stay-or-pay contracts under trafficking theories, state legislators to ban the contracts ex-ante, and federal agencies to declare the contracts void. Likewise, advocates should consider pursuing Thirteenth Amendment-based challenges to stay-or-pay contracts as a manifestation of constitutional political economy.
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