Smoothstack Lawsuit: Exploiting Underpaid and Overworked Employees Through TRAPs

Linta Rizwan July 21, 2024

0 13 4 minutes read

Smoothstack lawsuit alleges that the tech training company is stealing wages from employees and firing them. An employee of the corporation filed a lawsuit against the company that compels them to sign the predatory Training Repayment Agreement Provision (TRAPs).

The slave contract will hook the employees with a thousand-dollar debt if they try to leave. Moreover, some of the low-wage tech employees were fired without any reason or compensation from the projects with one of the largest corporations in the world.

Former Smoothstack employee and consultant Justin O’Brien Outten filed a complaint against the company. The controversy has put forward doubts about the legitimacy and work ethics of the tech company.

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How Does Smoothstack Lawsuit Reveal Employee Exploitation?

After the revelation of the Smoothstack lawsuit, it came to light that the company is setting traps to lure people for their profit trade school. They make false promises to the workers who are looking for decent jobs. As the modern-day tech company, they dress up their old workers to exploit the recruits.

Smoothstack company trains tech workers to make them skilled enough to work at globally recognized firms. They place their IT professionals at various firms, including:

Accenture (NYSE: VZ)
Johnson and Johnson (NYSE: JNJ)
Morgan Stanley (NYSE: MS)
CapitalOne (NYSE: COF)
Bloomberg

Utilizing the shiny tech-tinged wrapper, they use the slave contract (TRAPs) to make their workers sound 4,000 hours of work. The work is utilized by the firm to receive projects for Fortune 500 companies.

What’s the TRAPs Agreement?

TRAPs stands for Training Repayment Agreement Provision that a recruit signs before joining the company. In Smoothstack, the contract is different, cruel, and awful as the worker has to work a minimum of 4,000 hours according to it before giving in resignation.

If you work 8 hours daily without any holiday, it will take 1.3 years before you can withdraw from the company officially (about 500 days of working). If the employees want to resign before this period, they need to pay $23,000 to Smoothstack. Therefore, its employees are against such a foul contract and filed a lawsuit against the Inc.

Most of the workers are unable to pay this hefty amount if they want to leave the company. Henceforth, most of the workers have to work even if they’re against it, just because they are unable to pay the fee. Due to modern indentured servitude, the employees have to suffer.

Justin O’Brien Lawsuit Against Smoothstack and Claims

Justin O’Brien filed the Smoothstack lawsuit to expose the firm’s exploitation of its workers. O’Brien admitted that he was pressured to sign TRAPs and wasn’t paid a penny citing the first three weeks of training. Later, they paid him only the minimum wage after taking long hours of work. There were no overtime payments or bonuses for working extra hours.

After the training period ended, he alleged that Smoothstack sold his labor without any authorization. Moreover, it was against what was promised to him. In the meantime, he had to work for a minimal wage at the federal government.

After the project with the federal government ended, he had to wait for the next project to start working. The same thing has happened to various previous employees of the company. Just like him, they were afraid of being sued by Smoothstack, hence, they couldn’t look for better work opportunities.

Smoothstack Exploiting Mandatory Training Program

Smoothstack lawsuit revealed the training program for entry-level IT professionals. The exploiting tactics of the company include:

Wage Theft

The firm paid low wages to its employees, as little as $7.25 per hour for a 40-hour work week, however, they had to work overtime 40 hours. The 40-hour overtime remains unpaid by the Smoothstack authorities.
There was no payment provided to the workers for the training period of three weeks.

Predatory TRAPs

Smoothstack lawsuit reveals that the company compels the workers to sign the contract of 4,000 billable hours of work.
The contract term is almost two years.
For breaching the TRAPs contract, the employee has to pay $23,875 in ‘training and placements costs.’

Switch Gig and No Permanent Employment

The wage is minimum and there’s no overwork payment.
The payment per hour is $7.25.
The contract violates the Fair Labor Standard Act.
Smoothstack lawsuit indicates that the jobs at the firm are prohibited by the law in the Commonwealth of Virginia as the contract compels the workers from not leaving their jobs.

Progress in the Smoothstack Lawsuit

In May 2023, the lawyers of Smoothstack filed a plaintiff to dismiss the case. After the motion, the lead plaintiff took three claims back regarding the 4,000 hours of work. The case was initially filed in April 2023. The case is ongoing and details are still mysterious. You will have to wait to hear about the final verdict until the lawsuit concludes.

In the meantime, the Smoothstuck lawsuit has impacted the industry and the firm significantly. They might be offering compensation to their employees outside of court and may make the employees withdraw the case. However, one can’t be sure about it.

Conclusion

As society is becoming money-driven and capitalist, it’s no wonder that cases like the Smoothstack lawsuit exist. Various company employees exposed that the corporation hires people with no skill or little IT knowledge and exploits them. The workers are underpaid and overworked under the slave contract, TRAPs.

Smoothstack lawsuit has yet to be concluded and many eyes are watching the case’s progress. Many people anticipate the company’s downfall after the Smoothstack lawsuit’s conclusion. What do you think about the employee’s exploitation, comment below.

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