Introductory email:

Hi Mark,

We have created a brief summarizing what we think are the issues related to the collections initiative and suggesting alternative solutions to your approach. 
After our last conversation, and conferring with our own board, these are the steps we are going to make. These issues with GroupOne and NATHO are important to present to our members and we will do so. However for now, we are not going to name NATHO or their members in regards to the collection scheme. Instead, we will discuss the collection scheme as “a group of agencies are considering …”

This will allow NATHO and PanTravelers to continue to discuss the issues without any harm done and still inform our members. This will also give you a chance to see the real world traveler response prior to implementation.

Frankly, we are protecting your reputation here. We are doing so because we think we have a real chance to build a working relationship and alliance and work together to help improve industry conditions and standards. Travelers have as much to gain as agencies when standards are appropriately designed.



Small picture: Collection agencies and information sharing (which will ultimately be used as and called a blacklist).

No matter how you frame this issue, travelers will see this as an affront and it will be a PR disaster for NATHO and their member agencies. As we understand the impetus for this initiative from Mark Stagen, it is to assist in recovering damages from those rare travelers who trash apartments and to help warn other agencies about using these travelers. In of themselves, these are good goals. The issue is how to achieve them, and moreover, how to reduce initial occurrence.

The method proposed by NCO is completely legal when just collections information is being considered. Even if more information is shared, legal cover is provided by the Fair Credit Reporting Act. This has been used by the Dallas Fort-Worth Hospital Council’s credit reporting agency subsidiary GroupOne Services to report termination data on healthcare workers between member facilities (and agencies) for some years without a significant challenge. One real danger from the traveler perspective of the NCO alliance is that once established, it can add and share information in the future similar to what GroupOne does now.

Effectively, your much more limited plan will operate as a blacklist, and will inexorably increase in scope and power over time. Legality aside, this is indeed an affront to worker’s rights and privacy.

It is also unfair in our opinion. Damages arising, whether coming from physical property damage (very rare), or breach of contract issues (which usually boil down to terminated contracts and out of pocket housing costs to agencies), are generally not specified by the contracts and are estimated by the agency. This is unlike most items that end up in collections where real products or services were obtained and not paid for in full per agreed upon invoices. This makes disputing such charges very difficult indeed.

It is unusual for agencies to use a collection agency for these debts. The following will sound like a gross exaggeration, but emotionally to workers, this is a regression to the days of indentured servants who often go into debt by paying more for housing and food supplied by the employer than they earn. Or the more modern example of sweatshops and debtor’s prisons.

We would recommend not using a collection agency at all.  The news of use of a collection agency would stigmatize such agencies identified online. The bad PR resulting from this and subsequent loss of business will far outweigh any positive financial benefit.

Failing that, we would recommend that NATHO not have an official alliance with NCO to avoid tainting either NATHO or its members with adverse PR from the actions of individual agencies. Other than convenience, and perhaps more timely delivery of news of a recent collections event, there is little benefit to such an alliance other than to add and share termination data between members (which is not currently being contemplated as we understand it).

About the legal issues of the FCRA and sharing of information via CRAs (credit reporting agencies), there is still some legal jeopardy for agencies. Two states, Hawaii and Washington, have both passed laws making it illegal to access credit reports for employment purposes. If an agency is based in Hawaii or Washington, or the traveler has a home there, or the prospective assignment is located in those states, and an agency accesses a credit report and declines to hire, either those states or the traveler could pursue penalties or sanctions in court.

Furthermore, the use of credit reports in employment is receiving a lot of political attention right now and the legal situation is evolving. The travel industry significant state of California has passed a bill this year with similar restrictions. The governor vetoed this bill; however it has been reintroduced in the current session with a view to garner enough votes to overcome a veto. Several other states are considering similar legislation.

Of even broader impact is a bill that has been introduced in Congress to amend the FCRA so that credit reports may not be used at all for employment purposes (with exceptions similar to the state laws mentioned above for positions of significant financial responsibility). 
PanTravelers is supporting this bill. We have written a letter to the relevant members of Congress laying out some details about blacklists that may be new to them, and urging them to support the bill. We are also publishing sample language for the rest of our members to write to their elected representatives for support of this bill. Because of the controversy around this misuse of the FCRA, we expect this very simple amendment to pass with relative ease and be signed into law.


Why get involved in the ethical issues of collections, the harmful public relations issue, the potential for legal jeopardy in individual states, and the excellent chance that the use of credit reports for traveler screening will shortly become illegal nationwide?

Big picture: How to prevent conflicts primarily rather than patching later with lawsuits or collection remedies?

We believe that the use of fair and transparent contracts will remedy most of the conflicts between travelers and agencies. Such contracts are rare in our industry now. The purpose of a contract is communication between parties, the setting of expectations and the defining of responsibilities. Only secondarily should it be designed as an instrument of last resort in a court of law. Unfortunately, contract design has focused primarily on courtroom scenarios by lawyers acting solely as agency advocates with tunnel vision, neglecting the primary purpose of a contract.
The Professional Association of Nurse Travelers has developed a list of principles that would be contained in a model contract. These principles can help achieve the primary purpose of setting fair terms and agreement among the parties, and helping to minimize the need for last resorts such as lawsuits or debt collection. We would be very interested in working with NATHO member agencies on model contract language and principles. The major rationale for the existence of both our associations is to improve the business conditions and standards for our industry.
Housing is the largest issue in individual traveler satisfaction with an agency. In the case of a early contract termination, housing becomes financial dead weight to the agency and the subsequent conflict is often responsible for the loss of an otherwise successful relationship. Contracts cannot contain language covering every potential scenario, however they can get all parties on the same page in regard to expectations, liability, and penalties. When contracts are confusing or ambiguous, the groundwork has been set for conflict in the one out of 10 contracts that fail industry wide.

We believe that a separate housing contract is the way to go when housing is to be provided rather than a stipend. Individual items can be initialed, or even better, gone over item by item by the recruiter. This can help tremendously in focusing travelers on their responsibilities.
The paternal relationship between agencies and travelers can encourage poor traveler behavior. Travelers may end up treating a rental property like a rental car or a spring break hotel room. They may not act professionally on the job, in part because they don’t understand the importance of the business contract nor understanding that they are acting as the agency’s representative, and not as the agency’s child with no responsibilities.

If you can bring them back to adult responsibilities with a clear contract outlining expectations and responsibilities, they will be more likely to treat housing the same way as they do with their primary home, and likewise with professional behavior at the client facility at least up to the standards of a permanent position.

Without spending too much time on all of our model contract criteria, the main contract must clarify agency and traveler liability for the housing portion to work well. For example:
•If an assignment fails, what are the liabilities of the agency and the traveler?
• Are the damages clearly specified with real (and realistic) numbers?
• What if the hospital has a low census and makes up a bogus claim about the traveler to terminate?
•Will the agency enforce the facility contract terms or cave to protect ongoing business?
Should the traveler be assessed damages under these conditions?
• Are terms in the facility contract such as two week notice placed in the traveler contract?
 Should any damages related to housing be assessed when proper notice is given?
• If liability for damages is assigned to the traveler, how will disputes be handled? What are the avenues to seek restitution?
  • Court
• Responsible jurisdiction (presumably agency home)
  • Mediation
•What mediator?
  • Collection agency
  • Liquidated damages held from paycheck

Housing contract

With a clearly written contract as a foundation, you can now write a housing contract. Points can include:

• The agency is providing housing fully paid as a benefit for successfully completing your contracted hours.
o  Address (when time permits providing the actual address)
o  Amenities (for example): x bedrooms; ground/second floor; off street parking; washer dryer in the apartment; utilities paid except for phone, cable, or internet; swimming pool; workout room; fully furnished.
• I understand that I am responsible for any damage occurring to the property and furnishings.
o  We strongly recommend inspecting the property closely and taking dated digital pictures of any issues found in the property and furnishings immediately prior to moving in and when moving out.
o  We’ve enclosed a form to use to detail any issues in writing as well. If the property manager supplies you with a similar form, fill it out and be sure to retain a copy.
o  These actions will protect you and us from any false claim of property damage. Such claims can be very, very expensive.
o  As we cannot inspect every rental before you show up, sometimes they are below expectations. If the property is unacceptable as is for living in comfortably for the length of your contract, DO NOT MOVE IN! Moving in implies acceptability and obligates both of us financially.
• I understand that I may be evicted without notice if I trash the property or fail to behave as a responsible tenant. I will be held financially responsible for such occurrences and the unused portion of the lease.
•  I understand that should I not finish this contract voluntarily (personal reasons) or be terminated for poor performance, or wish to change my housing, I may/will be held financially responsible for the balance of the lease.
o  Property cost per month $x,xxx. Furnishings per month $xxx. Lease termination fee $x,xxx.
o The property manager and we, the agency, are legally responsible to mitigate these damages. If the extent that the property can be swiftly re-rented, or if we have a long term lease, another traveler can fill the property, this will offset your financial responsibility. Since these are generally very short term leases, it can be extremely difficult to fill the remaining weeks though.
This housing contract is halfway between what agencies have done historically, and a full fledged lease. As such, we believe that it will be more politically palatable to travelers than a lease. However, PanTravelers could go along with is moving to a full lease arrangement with travelers (actually a sub-leasing arrangement). Such a document would be much more enforceable than most current agency to traveler contracts, and allow proper accountability for a debt incurred should the contract end early. Such a pathway will also allow for the proper use of collection bureaus.