The Las Vegas telemarketing enterprise Wellfleet Communications and its owners must pay over $1.4 million in back wages and liquidated damages to over 1,328 call center workers whom the business shortchanged, a federal court has ordered.
The 9th U.S. Circuit Court of Appeals in San Francisco ordered the payment of the back wages and damages. Repayment is to be made to the affected employees with $728,994 for back wages and $728,994 in liquidated damages, according to a press release from the U.S. Department of Labor.
“The judgment follows a U.S. Department of Labor investigation that found Wellfleet Communications and its owners illegally misclassified employees as independent contractors, forcing them to unlawfully sign away their federal rights and paying them only when they made sales,” the press release said. “The 9th U.S. Circuit Court of Appeals affirmed the findings of a Department of Labor investigation and subsequent judgment in the U.S. District Court for the District of Nevada against Wellfleet Communications LLC, its sister companies Lighthouse Communications LLC and New Choice Communications Inc., and owners Allen Roach and Ryan Roach.”
Wellfleet Communications is incorporated in Nevada and based in Las Vegas. As a telemarketer, the business contracted with telephone companies to sell telecommunications products, the press release said. Because Wellfleet paid employees only a commission for completed sales, those employees who made few or no sales in a week got little or no pay.
“The court’s action follows an investigation by the department’s Wage and Hour Division that found Wellfleet and the Roaches violated the federal Fair Labor Standards Act by willfully misclassifying employees as independent contractors and demanding call center workers sign agreements that claimed to waive their FLSA rights,” the press release said.
Under the FLSA, “covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009,” the U.S. Department of Labor’s website said.
“The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments,” the department’s website said.
