SmoothStack Lawsuit is a story of employee exploitation. Know everything about it in this blog post.
We live in an increasingly capitalistic society where companies and businesses prefer profits over everything else. Their pursuit of profits does not stop them from exploiting their customers, the environment, and even their own employees as in the case of the Smoothstack scandal.
Almost every industry you look at exploits the people working in it in some way. Of the many businesses and the companies that operate in that particular industry that take advantage of their employees, some more than others but they all do at least on some level.
People who are new to the workforce and just starting out are especially vulnerable to exploitation as they have limited experience and skill and don’t have a lot of options. Smoothstack lawsuit is exactly about this issue of employees being exploited by the very company they work for.
However, before we discuss the lawsuit itself, we should tell you about Smoothstack itself to give you a bit of context about the whole lawsuit. So, without further delay, here is all you need to know.
Smoothstack is a tech company that specializes in hire-train deploy solutions. This essentially means they hire people with little to no tech skills and experience and train them, particularly in the IT sector. Then these people are put in the field in one of two ways and this is where the Smoothstack lawsuit comes into play.
The first way is that the company helps these recruits with job placements in private and government companies. Else they deploy these personnel in projects either initiated by the company itself or for projects initiated by other companies.
The Smoothstack lawsuit is not just a single but a class action lawsuit filed in April 2023 by multiple ex-employees of the company. The lawsuit accuses the company of two main wrongdoings, which are as follows.
It has been alleged that the company is overworking the employees and not paying them fairly. The company is doing this in multiple ways, starting with the employees being paid minimum wage and required to work a minimum of 80 hours a week, and if they work over the assigned hours, they are not paid overtime.
Not just that but it is also alleged that for the first three weeks of their employment, they are not paid anything. There are even accusations of employees only being paid for 40 hours even when they are working for twice those hours.
In case the employees want to quit these working conditions there are harsh financial penalties that prevent them from doing that. This is discussed in the second part of the Smoothstack lawsuits below.
TRAPS stands for Training Repayment Agreement Provisions, however when you read about it in the Smoothstack Lawsuit, its meaning completely changes and it becomes very evil. Upon joining the company employees sign a contract which states that employees have to work a minimum of 4000 hours before they can resign.
If we divide these hours by the 80 hours a week that they work it comes out to a whopping 50 weeks or 11.5 months which is almost a year. If the employees resign before this time period ends, they have to pay $23000 to the company, which is nearly impossible for most employees.
This essentially traps the employees and they are forced to work for the company against their will. This can be constituted as a modern form of indentured servitude.
This class action lawsuit is still ongoing as it was only filed last year. The lawsuit was filed in April of 2023 and the lawyers representing the company filed a motion to dismiss the case in May of 2023. While the entire lawsuit is still not dismissed, the three claims regarding the 4000 hours were taken back the by lead plaintiff.
This was done when the company agreed to waive this requirement. After these claims were taken back a new amended complaint was filed against the defendant, in the same month. The lawsuit is still ongoing and as such not a lot of details have been released and we will have for the legal battle to be over to get new updates.
Depending on how strong the case is, it can go one of two ways. Either the company chooses to settle the lawsuit out of court and in that case, there might be a nondisclosure agreement signed by the parties and we may not get to hear most of the details about the case.
Otherwise, the company can choose to fight the lawsuit in court, and considering it is a class action lawsuit with multiple defendants, it is difficult to predict how the lawsuit will progress. All we can do is hope that justice will be served and employees current and old will get their fair compensation.
If the plaintiffs win this case, then it will affect not only the defendant but the entire industry as a whole. Other companies that exploit their employees this way will also get sued and using this case as precedence it will be easier for plaintiffs to win such cases. However for now we can only speculate and until we get a verdict, nothing is set in stone
