We live in a society where private firms are booming and majorly contributing to the economy. In this growing competition, companies often focus on their profits. The continuous greed of profit can sometimes lead to reducing the cost of their operations. In this article, we will understand about Smoothstack Lawsuit and Smoothstac IT services and solution provider who is accused of underpaying and overworking its employees.
What is Smoothstack Inc.?
Smoothstack is an IT services and solutions provider which is certified by Minority Business Enterprise or MBE. It provides strategic consulting, project support, and talent development in the areas of Application Development, Cloud etc. to F500 companies and government agencies. Their tech talent is currently 51% of minority people.
Revolving around controversy
Their lawsuit was filed in Virginia Federal High Court over Fair Labor Standard Act (FLSA) abuses to SmoothStack Inc. and their co-founder Boris Kuiper. The employees and the trainees alleged that they were treated unfairly. They also did not follow the rules they promised during their time working there. The former employees claim that they were paid minimum wage despite working a minimum of 80 hours a week(or approx. 11 hours a day). Additionally, any hours worked beyond the assigned time were unpaid. Some employees also reported that they were not receiving any payment for the first three weeks of their employment. Moreover, employees are required to sign a contract stating they must work a minimum of 4000 hours before. They can resign(through Training Repayment Agreement Provisions or TRAPs). If they fail to meet this requirement, they are penalized with at least $23,000, which significantly trapping them in their positions.
Public Reactions On Smoothstack Lawsuit
Smoothstack had a hard time since they are majorly expending much on lawyers, and it can increase if they go for settlement. On the other hand, investors worry about what will happen next. Employees worry about their jobs, and customers may not continue working with SmoothStack until the lawsuit is resolved. Other people are keeping a close eye on this case because it could change how companies treat their workers and do business.
SmoothStack Response
Smoothstack has released several statements that denies the allegations and affirms their commitment to ethical business practices. They highlighted their devotion towards their learners and their clients, pointing to console partners of their integrity. In response to the lawsuit, they implemented several measures to address the allegations. It includes revising their training programs, enhancing transparency in their contracts, etc. Looking ahead, Smoothstack focuses on improving its reputation and ensuring compliance with all legal and ethical standards. They are too investigating unused trade procedures to recapture the belief of their clients and stakeholders.
Current condition of SmoothStack
On April 9, 2024, Accenture awarded SmoothStack an $84 million subcontract to support its work on behalf of the U.S. Department of Education’s Office of Federal Student Aid. The division of the government dependable for regulating the $1.6 trillion understudy credit system. Accenture’s work, on behalf of the U.S. The Department of Education recently grabbed attention when Accenture wrongly informed about 9 million student loan borrowers that they were eligible to have their student loans canceled.
Background of TRAP
Earlier this year, the Federal Trade Commission took major steps to boycott TRAPs as a portion of a progressing rulemaking related to non-compete contracts. This activity takes after a request by the Customer Financial Security Bureau into so-called “employer-driven debt” counting TRAPs. State officials are too taking steps to boycott these contracts beneath state law. These later government endeavors to take after a wave of cases recorded by Towards Justice and the Student Borrower Assurance Center, counting high-profile class action claims against bigger pet supply retailer PetSmart and cargo airline Ameriflight.
Understanding Corporate Social Responsibility
While the corporate should follow their rules and regulations in the country, there are some additional responsibilities, a corporate should consider in their business:
- Environmental responsibility: A corporation should choose the alternatives which are sustainable and environment friendly. This can be reason as reducing carbon footprint, greenhouse gas emissions etc. We can take the famous example from Nestle as Nestle in Switzerland organize a volunteer week that was centere around corporate social responsibility. The result: More than 100 employees participated across Switzerland over four days, with six Nestlé sites involved and they collected over 110 kgs of trash.
- Ethical or human rights social responsibility: Ethical responsibility commits to a commitment that a company should work in an ethical manner. It supports human right principles such as fair treatment to all stakeholders, equal pay etc. Glovo Cares Volunteer week- By organizing a global volunteer week initiative at local food banks. They supported an ethical cause that aligns with their core business in seven countries and nine cities which contributed over 700 volunteered hours globally.
- Philanthropic responsibility: Philanthropic responsibility refers to the company’s aim, goals and objectives for the betterment of the society. It’s like donating a high amount to the worthy causes of the society in the form of trust and charity. Eg NatWest Giving Tuesday campaign: Through giving tuesday, employees are invited to give their voice,time or money to the betterment of the society. Through this campaign they earned almost £425,000 (over $545,000) in bank and £150,000 in kind.
Conclusion
The Smoothstack Lawsuit has highlighted many allegations to their employees and their trainees. The court has made a bigger impact by listening to their employees. If as a person, you are working in any organization, make sure that the organization sticks with their promises. Organization should not do any work which eventually hurts you. If you are not feeling comfortable in an organization, you have every right to question them and if you are not satisfied with the answer, you should change your job.
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