Smart Circle Wage Lawsuit

On Friday, May 20, 2016, Fitapelli & Schaffer, LLP along with Nichols Kaster, LLP filed a class action wage lawsuit against Smart Circle, an outsource service company and “a worldwide leader” in providing successful sales and marketing solutions for nationally-recognized brands as well as regional and local businesses. The lawsuit represents field agents working for Smart Circle who assert they were wrongfully misclassified as independent contractors keeping them from receiving the minimum wage and overtime pay they deserved under the Fair Labor Standards Act and the California Labor Code.

Field agents at Smartcircle and their affiliates with job titles that include distributors, sales reps, leaders, customer representatives, and account managers worked in entry-level, low skill jobs out in the field of low income communities as part of a grassroots outreach and marketing efforts to provide phone and wireless plans through a government project called the Lifeline Program.  The Lifeline Program was created by Congress in the 1980s to provide phone service to qualifying low-income consumers with the intent ensure that all had access to phone service. In 2005, the program was extended to offer wireless service to low-income consumers, in addition to traditional landlines. These wireless phones are colloquially referred to as “Obama Phones.” A field agent would receive $9 per enrollee and on average would work 11 – 12 hours per day and 5 – 6 days per week. Regardless of working more than 50 hours per week, agents would only receive pay for the amount of enrollees they had signed up in that week. For example, the named plaintiff received a paycheck for $66 even after working more than 50 hours that week. Agents were required to attend morning meetings that consisted of motivational talks from upper management, as well as information for boosting Lifeline program applications. They would even sometimes be called in to attend meetings on Saturdays. After a full day’s work they were required to report back to the office between 5:00 p.m. and 7:00 p.m., for additional meetings that could last until 9:00 p.m.

The wage lawsuit alleges that Smart Circle classifies its agents as independent contractors or otherwise exempt from the FLSA’s minimum wage and overtime requirements. Further, the workers allege that they should not have been categorized this way due to the minimal amount of control, if any, that they had in their employment with Smart Circle. Agents are provided preprinted “Assurance Wireless Talking Points” to go over with consumers, as well as informational Assurance pamphlets, and marketing paraphernalia. Smart Circle makes these materials available to its Outreach Agencies and requires its Outreach Agencies to have their agents follow these materials. Smart Circle does not allow its agents the discretion to change the services or phones offered. The wage lawsuit alleges that Smart Circle engaged in a widespread pattern, policy, and practice of violating the rights of Smart Circle agents under the FLSA and the California Labor Code and that Smart Circle failed to pay its field agents the proper minimum wage rates, overtime, and for all hours worked.  As a result, there were times when agents did not make at least the minimum wage for all hours worked within a work week.

It is not always easy to understand if you are being classified and paid correctly as an employee. Companies may willfully misclassify you as an independent contractor and fail to pay the proper minimum wage for all hours worked as well as overtime compensation for hours worked over forty per work week. If you feel your aren’t being paid correctly or have questions as to your employment classification give our firm a call at 212-300-0375 or visit for more information. We are strongly committed to protecting the rights of hard working employees.