Nursing Staffing Agencies Face New Contract Disclosures
Staffing firms must update employee resignation disclosures after a $1.85 million settlement involving worker penalties.
Updated on Oct. 16, 2026 in Nursing Jobs
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A Monmouth County court approved a $1.85 million settlement regarding excessive resignation charges for 575 Filipino nurses employed across 30 states. The ruling requires the staffing companies to update contract disclosures for future employees.
Why it matters
This settlement highlights the legal risks staffing agencies face regarding contract clauses that impose heavy financial penalties on employees for early resignation. Agencies operating across state lines must ensure their exit fee structures are transparent and compliant to avoid similar class action litigation.
The $1.85 million settlement covers 575 nurses, with 19 receiving full reimbursements averaging $25,000 each. Additionally, debts are being canceled for more than 100 nurses who departed before December 3, 2025, while other participants receive an average of $1,080.
The players
Towne Nursing Staff Inc.
A staffing agency providing healthcare personnel for facilities across the United States.
Towne Pediatric Homecare LLC.
A nursing staffing firm specializing in pediatric care and home health services.
Owen McCarthy
A Monmouth County Superior Court Judge who presided over the final settlement approval.
The details
The settlement resolves claims that Towne Nursing Staff Inc. and Towne Pediatric Homecare LLC unfairly penalized workers who resigned prior to the completion of their contracts. Beyond the payouts, the companies must implement revised disclosure practices in future employment agreements. The court granted this approval without a formal finding of liability, ending the dispute over the alleged excessive resignation charges.
Timeline
December 3, 2025: Date used as the cutoff for debt cancellations.
October 7, 2026: Date the court granted final approval to the settlement.
Market Landscape
This settlement reflects the broader regulatory scrutiny currently facing staffing firms regarding the transparency of employment contracts. It follows a tightening trend in labor law where courts are increasingly skeptical of restrictive financial clauses tied to employee departures.
Staffing operators should immediately audit their resignation and exit fee provisions to ensure they comply with evolving state-level standards on disclosure. Consult with legal counsel to ensure contract language regarding early departure fees is transparent, defensible, and clearly communicated to avoid potential class action risk.
The takeaway
The ruling emphasizes that contract disclosure requirements are becoming a non-negotiable operational standard for healthcare staffing firms. Agencies should prepare for increased scrutiny of their fee structures by tracking how similar settlements influence future enforcement actions in their specific jurisdictions.
Further reading
For more on industry employment standards, see our guide to Nursing Jobs.
Source note: This article includes information reported by GMA Network.
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