Labor News & Commentary November 2 tates tackle "stay-or-pay" contracts & more

https://onlabor.org/november-2-2025/

By Liana Wang

Liana Wang is a student at Harvard Law School.

In today’s news and commentary, states tackle “stay-or-pay” contracts, a new preliminary injunction bars additional shutdown layoffs, and two federal judges order the Trump administration to fund SNAP.

Earlier this year, NLRB acting general counsel William Cowen rescinded a 2024 NLRB memo targeting “stay-or-pay” contracts. Former General Counsel Jennifer Abruzzo had declared that these kinds of provisions—under which employees must pay their employer if they separate, either voluntarily or involuntarily, before completing a mandatory period of employment—unlawfully restrict employee mobility under the NLRA. As the federal government pulls back from interventions, state governments have stepped up. In California, Gov. Newsom recently signed AB 692, a new law that makes it illegal for an employer to require repayment of training, relocation, or other hiring-related expenses if an employee quits or is terminated, even if an employee signed such a repayment agreement voluntarily. The California Nurses Association, the largest union of registered nurses in the state, helped sponsor the bill. In New York, Assembly Bill A584C was passed with overwhelming support in the state legislature and now awaits Gov. Hochul’s signature. Indiana, Wyoming, and Colorado have also passed more limited bills restricting the use of stay-or-pay agreements, and more states have recently drafted similar bills.

Meanwhile, on Tuesday, U.S. District Court Judge Susan Illston issued a preliminary injunction stopping the federal government from firing federal workers during the government shutdown. Judge Illston described the layoffs as “unprecedented in our country’s history” and pointed out the administration’s publicly announced intentions “target[] those from a particular political party,” ultimately calling the layoffs “the epitome of hasty, arbitrary and capricious decisionmaking.” As both Mila and Ajayan reported, Judge Illston had previously granted a temporary restraining order against the “Reductions in Force” (RIFs), with coverage limited to workers covered by plaintiff unions. The injunction similarly does not cover all federal employees, but also extends beyond protection solely for union members. It prevents the government from issuing new RIF notices or implementing existing RIFs and layoffs for “federal employees in any program, project, or activity (PPA) or competitive area” that includes any members represented by the plaintiff unions.

And on Friday, two federal judges ruled within minutes of each other that the Trump administration must continue to fund SNAP using at least a multi-year contingency fund of $5 billion that Congress had previously appropriated for the program. In a case filed by cities, the SEIU, churches, and nonprofits in Rhode Island, U.S. District Court Judge John McConnell granted a TRO, writing that “[t]here is no question that the congressionally approved contingency funds must be used now.” Because the $5 billion fund is less than the total amount needed for November SNAP benefits, Judge McConnell also ordered the government to “find the additional funds necessary” within its discretion, pointing to a $23 billion fund created by the Agricultural Adjustment Act. The government must make at least partial SNAP payments by Wednesday, November 5th. In a second case filed in Massachusetts, U.S. District Court Judge Indira Talwani similarly “clarified” that the government is “required” to use its SNAP contingency funds. It asked the government to respond on Monday, November 3rd, indicating whether it would choose to make partial benefit payments, or mobilize additional funds to make full payments.