Smoothstack lawsuit was filed by a former employee, the smoothstack lawsuit states that the IT company was involved in the fake promises of training and career in the IT sector. In this article, we will cover the complete topic in detail by opening the complete lawsuit.
Overview Of Smoothstack Company
Smoothstack is an Information technology (IT) company based in the United States who develops software and provides digital services like web designing, app development and tech related services to their clients. The CEO of Smooth stack is John Akkara. Akkara founded the company in 2018.
Smoothstack Lawsuit: Everything You Need To Know
You can download and view the official lawsuit file of 76 pages against the Smoothstack.
The lawsuit was filled by a former trainee named JUSTIN O’BRIEN, on behalf of himself and all others similarly situated. Smoothstack, a well-known IT agency promises to help their employees launch their careers with paid training and work assignments with one of their clients, a Fortune 500 firm by providing a six-month training program in which trainees frequently work over eighty hours per week. For the first three weeks of the course and the following five months of training, Smoothstack was allegedly not paying recruits for any hours they worked above 40 in a workweek.
The lawsuit claims that Smoothstack’s business model depends on TRAPs to force its workers to put in “4,000 hours” of labor that they can then bill to these “Fortune 500 companies,” which hire Smoothstack staff on a contract basis rather than directly. According to reports, Smoothstack attracted new employees by offering them a long-term position at one of these companies in exchange for their signatures.
Statement Of Outten & Golden Attorney Hannah Cole-Chu
It states “Workers at Smoothstack are trapped from the beginning of their employment,” By obtaining their staff members’ signatures for the Training Repayment Agreement Provision (TRAP), which claims to bind employees to the business for a two-year period. It defines that the employees cannot leave the company unless they pay a hefty fine of more than $23,000 to regain their freedom.
Justin O’Brien Statement
Justin O’Brain states that he was forced to sign extreme contracts during the company’s training program for his employees, O’Brian was also included in the program but he was not paid any wages within the first 3 weeks of the training program. On-top Smoothstack forces Justin O’Brian to work for more long hours including overtime.
Smoothstack reportedly paid O’Brien only a minimum wage without any overtime and also required him to work for the next 5 months of the training program.
It shows that Smoothstack has actually broken the laws and regulations of workers.
Rachel Dempsey Statement
“Under its showy technological facade, Smoothstack’s business strategy combines an abusive commercial training program with a wage theft scheme,” the lawsuit claims.
In the United States, there were 7,948 cases of low wage breaches in the fiscal year 2022 as a result of companies failing to pay their workers a fair minimum wage. Compared to the previous fiscal year, when there were a total of 7,287 minimum wage violations, this represents an increase.
It shows that how most of the companies trap their workers by using their power over them, limiting their rights as an employee.
Allegations Against SmoothStack
Allegations Against SmoothStack
The main allegation of Smoothstack lawsuit includes signing employees in a false agreement of training program to take advantages of IT professionals and binding them in low paying jobs.
The complainant claims that in January 2023, Boris Kuiper, the chief operating officer of Smoothstack, called him to discuss his salary claims against the company. The lawsuit claims that Kuiper tried to either “intimidate and harass” the plaintiff or “pressure” him into conceding specific facts related to his claim.
The complainant reportedly informed Smoothstack on April 4 that he is filing the claim against them. The lawsuit also claims that after three days of informing the company, the complainant was fired.
Binding In TRAPs: Reports states that Smoothstack ask their employees to sign one or more TRAPs promising them to completing 4,000 billed hours of work for the company’s Fortune 500 clients. The company was actually not paying the workers for these hours and trap them in this program. Moreover, if any of the worker tries to leave the job, he will be charged for at least $23,875.
Wage Stealing: According to the lawsuit, Smoothstack did not paid the workers for their work during the first 3 weeks of the training period and, despite the fact that they were required to work a maximum of 80 hours a week, paid workers only as much as $7.25 per hour for a 40-hour workday for the remaining six months of the training period.
According to the Smoothstack lawsuit, the organization has violated Fair Labor Standards Act trapping their employees in a false training program and binding them in an agreement by a blackmailing style way “if they leave the company, they will have to pay debt”.
Smoothstack Response To Lawsuit:
Smoothstack has strongly rejected the allegations and affirmed its observance of moral principles. For swift solution, the company places an extreme value on openness and collaboration with the relevant authorities. They continue to be dedicated to treating workers fairly and promise to investigate complaints thoroughly and honestly.
Public Reaction & Perspective
The allegations made against Smoothstack lawsuit have attracted a lot of attention and raised questions about labor standards in the business among the general public and IT experts. Many demand responsibility and express outrage over the alleged worker abuse. The incident has sparked debates about the need for tougher laws to safeguard workers and stop reoccurring instances of such conduct in the future.
Impact On SmoothStack
Smoothstack might suffer severe financial penalties and harm to its reputation if the accusations are proven true, which might result in a loss of investors and customers. The Smoothstack lawsuit has impacted it’s reputation badly. It shows the disagreement of the company’s promises with their employees. The company’s reputation are not only deciding it’s future but it also questioning that “Is IT sector trustable and reliable?”
Smoothstack is not the only company who is facing such allegations, there are a lot of other organizations who have been alleged for the similar cases in the past years. But overall, it signifies the importance of rules and regulations in any of the sector. No matter, it’s an insurance industry, food industry or an IT industry, Law is equally implemented on every sector.
The Federal Trade Commission started the process of banning TRAPs earlier this year as a part of its continuing regulatory process over non-compete agreements. The National Consumer Financial Protection Bureau’s investigation of “employer-driven debt,” including TRAPs, led to this move. Officials in the state are also acting to forbid these contracts within state law.
FAQs
What is the Smoothstack lawsuit about?
The Smoothstack lawsuit was filed by a former employee, Justin O’Brien, who alleges that the IT company engaged in deceptive practices related to training and career opportunities in the IT sector.
What are the main allegations against Smoothstack?
The allegations against Smoothstack include trapping employees in a training program with false promises, wage theft, and coercive practices such as requiring employees to sign Training Repayment Agreement Provisions (TRAPs).
What is the Training Repayment Agreement Provision (TRAP) about?
A legal requirement known as the “TRAP” requires that trainees remain with the organization for an agreed-upon period of time—in this example, two years. They are required to pay a high amount, supposedly about $23,875, if they depart before this time. Smoothstack allegedly used TRAPs to exploit its workers.
Conclusion
According to the complaint against Smoothstack, the company used misleading techniques to persuade its employees to sign a contract requiring them to put in lengthy hours without receiving any sort of compensation. Also, if an employee attempts to violate the contract, they will be required to repay a debt, which was another of the company’s primary strategies.
In order to safeguard employees against exploitation in the IT industry and other sectors, the lawsuit highlights the necessity for stricter labor rules and regulations. Smoothstack may be subject to fines and reputational harm if the accusations turn out to be accurate, throwing doubt on the reliability of the IT industry as a whole.
