That seems a little different. PhD programs are meant to be training programs and universities repeatedly have argued that it is not an employer-employee relat

That seems a little different. PhD programs are meant to be training programs and universities repeatedly have argued that it is not an employer-employee relationship, but a mentor-mentee one. If that's true, I think the mentors have a bit more responsibility even where it cuts against their own self-interests (e.g., tell someone that this is not the career for them and risk losing out on their labor).