The US Department of Labor announced Monday that it filed a lawsuit against healthcare staffing provider Advanced Care Staffing LLC and CEO Sam Klein. The agency said the suit alleges the company requires employees to sign contracts that they will work at the company for three years or repay wages. Some employees earned less than the federal minimum wage as a result of the contracts, the department said.

The lawsuit seeks an injunction against Advanced Care Staffing and Klein that would forbid them from reducing employees’ wages below federal minimums, according to the department. The suit also seeks back wages and liquidated damages.

Solicitor of Labor Seema Nanda said federal law prohibits employers from clawing back wages.

“Employers cannot use workers as insurance policies to unconditionally guarantee future profit streams,” Nanda said. “Nor can employers use arbitration agreements to shield unlawful practices.”

The suit claims Advanced Care Staffing’s contracts required employees to complete at least three years of full-time employment to keep their wages, according to the department. The contracts would force employees who left before the contract expired to enter into private arbitration and be required to pay the company’s future profits, plus attorneys’ fees and arbitration costs.

The department also alleged that Advanced Care Staffing pursued arbitration to demand a registered nurse — who resigned after raising safety concerns — pay the company to subsidize future profits, violating the Fair Labor Standards Act. The lawsuit also claims that the company’s contracts and arbitration demands have a chilling effect on employees' rights, including the protection to be free from an unsafe workplace and obtain owed wages.