On April 14, 2023, in Washington D.C, a former worker propelled a class-action lawsuit against Smooth Stack,
this lawsuit is filed against an employee staff agency and tech-training. The lawsuit accuses Smooth Stack of unwillingly snatching the payments of their worker and always insisting they acknowledge unfavourably Training Repayment Agreement Provisions (TRAPs), placing them on the hook for tens of thousands of dollars in debt if they decided to leave and terminate low-wage tech jobs working on projects. This lawsuit was against the higher authorities who normalized this trend in working areas.
Smooth Stack claims to provide training to their employees to help them pursue a career in information technology professionals and place these tech workers at firms that include Accenture (NYSE: ACN), Verizon (NYSE: VZ), Johnson & Johnson (NYSE: JNJ), Morgan Stanley (NYSE: JNJ), CapitalOne (NYSE: cof), and Bloomberg. These firms are top-ranked industries for technology.
SBPC Managing Counsel Persis Yu said, “Smooth Stack is using tactics similar to those for-profit trade schools for luring low-wage employees using deceptive promises of rigorous training and high-paying jobs, effectively trapping the new hires in a modern-day debt trap.
“Justin’s experience serves as a warning to big companies everywhere: dressing-up age-old employee exploitation in a shiny tech-tinged wrapper won’t face legal consequences. Smooth Stack uses debt TRAPs to manage their employees, which are both cruel and unethical.”
This lawsuit claims that Smooth Stack uses the Training Repayment Agreement Provisions to compel its workers to spend “4,000 hours” performing work that Smooth Stack can bill these “Fortune 5,000c companies”, these companies do not hire Smooth Stack employees directly but instead contract out projects to Smooth Stack. To get new workers to sign up, Smooth Stack is accused of offering “false hope” of securing a permanent career at one of these firms, employing a recruitment strategy used by failed for-profit colleges such as Corinthian Colleges, Devry University, and ITT Technical Institute.
Allegations Against Smooth Stack: Exploitative Practices and Predatory Agreements
The complaint filed against Smooth Stack claims that the company manipulated their workers at the initial stage of their job and hiring, they exploited entry-level IT professionals, trapping them in low-paying jobs. The company tactics include.
1. Predatory Trap:
Smooth Stack allegedly demands all workers sign in one or more TRAPs, requiring them to work 4,000 billable hours (which would take at least two years) for Smooth Stack’s Fortune 500 clients. If a worker departs from reaching 4,000 billable hours, they must repay the company at least $23,875 for “training and placement cost”.
2. Wage theft:
Smooth Stack allegedly fails to pay workers for work performed throughout a three-week training period, during the remaining six months of training, employees are paid as little as $7.25 per hour for a 40-hour workweek, even if they are subjected to works as much as 80 hours per week which is double working hours.
Case Overview and Legal Rights
A former Smooth Stack worker (called Plaintiff) brought a lawsuit against Smooth Stack, accusing the company of not paying him his payment, other employees also suffered from this problem, and overtime wages required by the Federal Fair Labor Standard Act (FLSA), by stating that they paid all wages correctly, Smooth Stack denies all these claims. The Court has not yet decided on the validity of the Plaintiff's claims, and there’s no assurance that the Court will grant any recovery lawsuit.
The lawsuit is moving forward as a collective action representing participants who worked at Smooth Stack from March 28, 2021, to the present, and who participated in Smooth Stack.
Smooth Stack Lawsuit: Nuts and Bots
The lead plaintiff in the Smooth Stack lawsuit is Justin O’Brien, a former recruit and consultant at Smooth Stack. He aims to represent himself and all other employees and former employees in similar situations.
The complaints were submitted by lawyers from the Student Borrower Protection Center, an advocacy group and “non-profit organization focused on eliminating the burden of student debt for millions of Americans as stated on their official website.
These complaints against Smooth Stack violate both state and federal laws, with many core allegations that violate the Fair Labor Standard Act.
Frequently Asked Questions
1. How much does Smooth Stack pay?
The estimated cost Smooth Stack pays to their employees is approximately $82K-$128K which includes base salary and additional pay.
2. What does Smooth Stack do?
They hire talented staff to transform lives by Creating Access to tech careers. Train their staff to satisfy their clients by meeting their tech talent needs
3. Who is the CEO of Smooth Stack?
John Akkara is a co-founder of Smooth Stack, he’s served as CEO since 2018 and has worked as an entrepreneur for almost 20 years.
