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11 Jul 2024
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Smoothstack Lawsuit

Smoothstack Lawsuit Filed Over Allegedly Unlawful Wage Scheme

On April 14, 2023, a former employee filed a class-action lawsuit against Smoothstack, Inc., a tech-training and employee-staffing agency. This new lawsuit alleges that Smoothstack commits wage theft against its workers and coerces them to enter into predatory Training Repayment Agreement Provisions (TRAPs), thus placing them under the weight of tens of thousands of dollars of debt should they opt to leave or are discharged from low-paying tech jobs. on projects for some of the largest establishments in the world.

Smoothstack Lawsuit

The subsequent serves as a reproduction of the complaint filed on behalf of former Smoothstack employee and advisor , Justin O’Brien by amongst a number other Outten & Golden LLP, Towards Justice, McGillivary Steele Elkin, then the Student Borrower Protection Center (SBPC)”

There is a complaint against Smoothstack that claims the company has been misusing new IT recruits by making them undergo an enforced training program, a move that exposes them to poorly remunerated roles without any hope of advancement.

Here are some of the manipulative strategies adopted by the company

Smoothstack Lawsuit

Wage Theft.

It is alleged that Smoothstack did not pay any money to the employees for the time worked during three weeks of training but instead offered them $7.25 per hour for 40-hour work week at the end of which they received approximately half the remuneration up until the six month training period when all wages were paid in full–despite working up to 80 hours each week.

Predatory TRAPs.

Smoothstack seemingly compels each employee to hastily sign a minimum of one TRAP which mandates four thousand hours of labor for any of Smoothstack’s Fortune 500 customers to be performed (which requires not less than two years). On the other hand, a worker has to refund at least twenty-three thousand eight hundred seventy-five dollars ($23,875) whenever he/she quits before reaching this target.”

Gig Labor Models

One job is advertised, but Another is offered, with no future prospects for permanent employment.

Smoothstack allegedly employs contract workers. And assigns them to its Fortune 500 clients without any specific client being assigned on behalf of Smoothstack. For this, they normally pay them $7.25 per hour, which might go if it is not assigned one specific customer. If there is not specific client assigned during such cases. Competent workers usually receive payments according to the minimum wage rate that could be as low as $7.25/hour. This stage could last forever and such employees may receive poverty income of $7.25 per hour for every hour. No credit will be given towards the 4,000 billed hours.

Conclusion

The lawsuit more specifically claims that Smoothstack. A staffing company that promises to help “launch” the careers of aspiring IT professionals. Through training and work assignments with its Fortune 500 clients. Offers a six-month training program in which recruits are regularly required to work more than 80 hours in a workweek. According to the case, Smoothstack fails to pay recruits for the first three weeks of the program. During the remaining five months of training. It fails to pay recruits for any hours worked over 40 in a workweek.

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