Let’s talk about something that’s turning heads in the tech staffing world — Smoothstack, a company that promises to help launch IT careers, is now facing serious allegations in court. And no, this isn’t just some workplace squabble — we’re talking potential wage theft, unlawful contracts, and minimum wage violations. A former employee has stepped forward, filing a proposed class and collective action lawsuit that could affect hundreds of workers who’ve gone through Smoothstack’s training program.
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The Promise of a Career… With a Catch
Smoothstack sells itself as a launchpad for budding IT professionals. The pitch? A six-month training program followed by real-world client assignments with big-name Fortune 500 companies. But according to a 43-page lawsuit, the reality is a far cry from that polished promise.
The claim? Trainees were clocking over 80 hours a week, often unpaid for the first three weeks, and then left with no overtime pay for the remaining months of the programme. That’s not just a rough onboarding — it’s potentially illegal under the Fair Labor Standards Act (FLSA).
What’s the FLSA Got to Do With It?
The FLSA is pretty clear — workers must receive at least minimum wage for all hours worked, and time-and-a-half pay for anything over 40 hours a week. According to the lawsuit, Smoothstack wasn’t living up to that.
The £23,875 Trap: Training Repayment Agreement Provision (TRAP)
Here’s where things get even more controversial. Just three weeks into training, recruits are asked to sign what’s called a Training Repayment Agreement Provision (TRAP). If they quit or get fired “for cause” before completing 4,000 hours of client work — roughly two years of full-time employment — they owe the company $23,875.
Let that sink in. That’s nearly £20,000 hanging over someone’s head just for deciding to leave a job. And here’s the kicker — those 4,000 hours don’t even start accumulating until after the training is over.
Sign or Suffer: The All-or-Nothing Contract
Once the training wraps up, Smoothstack apparently presents another deal: sign a full employment contract or walk away and trigger the TRAP penalty. It’s described in the complaint as an “all-or-nothing” scenario. Either you stay and sign your life away for two years or leave and get slapped with a massive bill.
Even worse, if a consultant’s assignment with a client ends and they’re placed on what’s called “bench status,” they’re still tied to the company — earning minimum wage, not progressing toward the 4,000 hours, and not allowed to quit without penalty.
Trapped at Minimum Wage
According to the lawsuit, this system leaves workers feeling financially trapped. The only way to break free? Pay a hefty penalty that could wipe out their savings. And yes, the complaint claims this TRAP actually functions as an illegal wage kickback, pushing employees’ effective wages below minimum wage — even into the negatives.
Courts Are Starting to Notice
It’s not just the former employee raising eyebrows. The lawsuit claims that Smoothstack has already taken ex-employees to court over these TRAPs — but at least one Virginia court ruled the agreement “unconscionable”, meaning the contract was deemed shockingly unfair under state law.
One Employee Speaks Out
The plaintiff behind this new class action says he joined Smoothstack in spring 2020. He saw the red flags but felt he had no real choice — he’d already worked three weeks without pay and needed the job to support himself.
He signed the agreement in October 2020, but by November 2022, he had raised concerns to the company about its FLSA violations. Smoothstack allegedly ignored his attempts to negotiate a settlement and instead, according to the suit, tried to intimidate or pressure him into backing off.
Who’s Covered by This Lawsuit?
The class action seeks to represent anyone who participated in Smoothstack’s training program or signed one of these TRAPs since April 13, 2020. That could mean hundreds of affected individuals, all potentially owed back wages and compensation for what the lawsuit calls illegal employment practices.
What Happens Next?
The legal wheels are now turning, and this lawsuit could have serious implications for how tech staffing firms structure their training and employment agreements. If the allegations hold up in court, Smoothstack could face major penalties, including reimbursing unpaid wages, scrapping illegal agreements, and possibly changing its entire business model.
Conclusion: A Cautionary Tale for the Tech World
The Smoothstack lawsuit is more than just a legal battle — it’s a wake-up call for the entire tech staffing industry. While training and mentorship sound great on paper, no company should exploit eager professionals under the guise of opportunity.
This case is a stark reminder of the importance of understanding what you’re signing, knowing your rights as a worker, and standing up against practices that push employees into financial traps and unfair contracts.
If you’ve been through a similar programme or know someone who has, keep a close eye on this case. It could shape the future of employment practices in tech training — and maybe bring a bit more fairness to the system.
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