Sounds like a wiring problem? Lockout solenoid needs to be wired to the Backup/Reverse lights, not the Brake lights.
If you're by yourself, put the tow vehicle in reverse and set the parking brake to make sure it doesn't go anywhere. As you connect/disconnect the solenoid wire (either the whole harness if it's wired that way, mine is a seperate wire right now, and the trailer needs to be grounded to tow vehicle), you should hear it clicking. You'll need somebody else's help for this, but if you hear the clicking when somebody hits the brakes, it's wired wrong.