Over 450 Filipino Nurses “Trapped” by $20K Early-Quit Fees Win $1.85M Settlement

A New Jersey judge has approved the third major settlement this year targeting the same contract structure used by US recruiters to lock Filipino nurses into their jobs.

More than 450 Filipino nurses recruited to work in the United States won final approval of a $1.85 million class action settlement on October 7, resolving allegations that their staffing agency used employment contracts to keep them “trapped in their jobs” under threat of tens of thousands of dollars in financial penalties.

Monmouth County Superior Court Judge Owen C. McCarthy approved the settlement in Jemarie Cruz, et al. v. Towne Nursing Staff, Inc., et al. (MON-L-002021-26), a class action against Howell, NJ-based Towne Nursing Staff and its sister company Towne Pediatric Homecare, both owned by Towne Group. The class covers nurses across 30 states.

Towne denied wrongdoing in the settlement agreement.

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The lawsuit was brought by six Filipino immigrant nurses, Jemarie Cruz, Mary Fober Ced, Alvin Javier, Shirley Anne Fajardo, Iñigo P. Espiritu, and Zaena Diamad, on behalf of the full class, defined as nurses who entered the United States through Towne’s foreign nurse recruitment program and signed a contract with either company between August 13, 2014 and May 26, 2026.

Their complaint alleged violations of the federal Trafficking Victims Protection Act, the Fair Labor Standards Act, and New Jersey and New York anti-trafficking and wage laws, over three-year employment contracts that imposed tens of thousands of dollars in penalties on nurses who resigned without “good reason.”

The lead plaintiff, Jemarie Cruz, resigned from Towne Nursing in September 2023 after less than a year of work in Virginia. According to the complaint, Towne told her she owed “a significant five-figure sum” and threatened arbitration. Cruz returned to work that November under the threat, then resigned a second time in January 2024. Towne continued to threaten arbitration proceedings against her through May 2024.

Zaena Diamad, a pediatric homecare nurse in New Jersey, did not resign for nearly three years because, the complaint states, “she believed the financial consequences of doing so under TPH’s contract would be significant.”

The complaint also alleges that the contract every nurse had to sign, a document plaintiffs’ counsel described as complex enough that “even for a native English speaker and lawyer, the Contract requires a great deal of scrutiny,” included a sworn affidavit stating that willful breach “shall render me liable for the crime of Estafa within the purview of Article 315 par.2(a) of the Revised Penal Code.” Estafa is Philippine fraud law, carrying potential criminal penalties in the Philippines.

The contract’s arbitration clause compounded the exposure. Under a “loser-pays” provision, if Towne sued a resigning nurse in arbitration and prevailed, the nurse had to pay Towne’s attorney’s fees and the arbitrator’s compensation on top of the termination penalty itself.

The complaint further alleges that nurses were paid at the US Department of Labor’s OES Wage Level I despite experience and job responsibilities that should have placed them at Level II.

In the court filing supporting approval, plaintiffs’ counsel cited two recently approved federal court settlements involving the same contract structure against Filipino nurses, part of a growing pattern plaintiffs’ counsel documented in at least six cases over five years:

• Albany Medical Center, 2021: Returned $90,000 to seven nurses after the NY Attorney General challenged $20,000 early-termination fees.
• Sentosa Nursing Recruitment / Prompt Nursing, 2022: Paid $3 million to 184 nurses in federal court under the Trafficking Victims Protection Act, the same statute that anchored the Towne complaint.
• Carmen v. Health Carousel, March 2025: $6.1 million class action settlement finally approved in the Southern District of Ohio over the recruiter’s “Passport USA” program. Lead plaintiff Novie Dale Carmen’s contract required the same 6,240-hour commitment term as Towne’s.
• Advanced Care Staffing, 2025-2026: A coordinated $1.19 million resolution covering foreign-recruited healthcare workers since 2012, split between a May 2025 NY Attorney General recovery of $663,668 for 71 nurses who had paid up-to-$20,000 early-termination fees, and a $526,331 federal class action settlement in Miclat v. Advanced Care Staffing, which received final approval in the Eastern District of New York on March 4, 2026.
• Villarin v. CommuniCare / WorldWide Healthcare, July 2026: $1 million in cash payments plus approximately $1.2 million in debt forgiveness, totaling a $2.2 million settlement for roughly 220 nurses with $16,000 penalty clauses, finally approved in the Southern District of Ohio.
• Towne Nursing, October 2026: $1.85 million for more than 450 nurses across 30 states, with contract reforms going forward.

Attorney Hugh Baran of Katz Banks Kumin LLP, who represented plaintiffs in both the Villarin case earlier this year and the Towne case this month, told NJ.com that the pattern is not isolated. “These kinds of contracts are not unique to Towne,” Baran said, adding that they “can violate federal and state laws.”

Of the $1.85 million gross settlement fund, $474,121 is earmarked specifically to refund 19 nurses who already paid Towne to resign. Those reimbursements will average approximately $25,000, with one nurse receiving $40,000 and seven others receiving at least $30,000 each.

More than 100 additional nurses who left Towne on or before December 3, 2025 will have their alleged early-resignation debts forgiven.

The remainder of the fund, after court-approved deductions, is distributed by hours worked, with a 15% increase for the 368 class members who opted into the parallel FLSA collective action. Class members who never paid termination penalties are expected to receive approximately $1,080 each on average.

No class members objected to the settlement. Judge McCarthy approved $604,916 in attorneys’ fees, $35,252 in litigation expenses, $12,000 service awards to each of the six named plaintiffs, and $22,850 in administration fees, all deducted from the gross fund before per-nurse distributions.

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Beyond the cash fund, Towne agreed to overhaul its nurse contracts. The company will remove mandatory arbitration, contractual damages based on lost profits, and post-employment non-compete clauses from both current and future contracts, and cap the contractual employment period at 6,240 hours (roughly three years). Towne also agreed it will not seek to recover overhead, back-office costs, most attorneys’ fees, arbitration costs, or recruitment overhead from any resigning nurse. Nurses may still owe money under the revised contracts, but only for defined actual direct costs.

Going forward, Towne can only attempt to recover a defined set of “actual direct costs” from nurses who leave early. Those costs are limited to documented immigration fees (visa, premium processing, RFE fees), licensing costs (CGFNS, NCLEX, IELTS, visa screening), US travel expenses, certain living and training expenses, and third-party recruitment services the nurse elected to receive. The full approved amount applies until a nurse has worked 2,820 qualifying hours; after that threshold, reductions begin on a prorated basis. A nurse who worked 2,970 hours against $9,000 in actual direct costs would owe $8,605.26 at departure, according to a worked example in the settlement agreement. Payment is structured as 60% within 30 days and 40% within 120 days of the resignation, with interest on the deferred portion.

Nurses who resign for “good reason,” defined to include long-term disability, a material contract breach by Towne, or Towne’s failure to honor benefits like paid time off and sick leave, owe nothing. Disputes over whether a resignation qualifies as “good reason” go first to mediation at Towne’s expense, and the nurse can recover her own attorneys’ fees if Towne pursues the matter in court in bad faith.

EB-3 visa processing for Philippines-born nurses has slowed significantly in 2026, with the October visa bulletin showing Final Action Dates for Philippines EB-3 at August 15, 2023. The backlog continues to complicate international nurse recruitment pipelines, and the Towne case illustrates the separate financial risks that restrictive employment contracts can pose for nurses once they arrive.

If you entered the United States through Towne Nursing Staff or Towne Pediatric Homecare’s foreign nurse recruitment program and were a party to a qualifying contract for at least one day between August 13, 2014 and May 26, 2026, you may be a class member. Standard class members do not need to take further action at this time to receive settlement payments; the FLSA collective opt-in deadline has passed.

Case documents, the full settlement agreement, and the full class notice are available on the official settlement website, or you can reach the court-appointed administrator, Atticus Administration LLC, at 1-800-995-1532.

🤔 Were you recruited to the US under a contract like this? What was your experience? Share your experience in the comments.