Lawsuits put Pressure on Call Centers Pay Practices

A few days after media outlets reported on a class-action lawsuit filed in federal court last week against ClientLogic, two things happened.

First, more than 100 additional former employees called a toll-free number seeking to join the lawsuit against the company, which operated a call center in Buffalo until March. Those calls will help bolster the claims of the two lead plaintiffs that they were not paid for work they did before their shifts began and during lunch breaks -- a practice attorneys call common among call centers across the country.

Second, at least one other area call center has reportedly begun making changes in its practices, according to Paul Van Voorhees, one of the lead plaintiffs in the case against ClientLogic. He spoke with former co-workers who have gone on to work at other area call centers.

"I heard a rumor that since this particular case was announced, that at least one local call center has revised their policy to limit their exposure to these types of suits in the future," he said. "A former coworker said his call center over the course of the last weekend made an announcement it will not have this type of policy in their call center. My way of thinking is, it sounds like justice is already starting to prevail."

That's good news, because other call centers in town could be next, attorneys say.

"Any call centers that continue to expect off-the-clock work from employees are on notice it is not legal and they do it at their peril," said George Hanson, an attorney with Stueve Siegel Hanson Woody LLP in Kansas City, which filed the suit with co-counsel Outten & Golden LLP of New York City.

"The response has been overwhelming, which certainly reflects that unlawful compensation practices were occurring," Hanson said.

"This was not isolated or sporadic. This was a consistent company-driven policy to deny overtime pay," he said.

Call centers deny wrongdoing

A ClientLogic spokesman disagreed, saying his company did not violate employee compensation laws in any way.

"What is common practice is that our HR, payroll and employment policies are extremely well documented," said Amit Shankardass, senior vice president for marketing at the company's Nashville, Tenn., headquarters. "We also have an ethics hotline to allow any employee to bring anything to our attention without fear of retribution. If we are made aware of any (breaches), we always remedy them. That's common policy."

ClientLogic, founded in Buffalo 15 years ago, had two locations in Buffalo and two dozen others in 16 states. ClientLogic's Buffalo operation has been reduced in the past year with the closing of a Hertel Avenue site that furloughed approximately 200 workers. The company has 110 employees working at its data center on Ellicott Street.

ClientLogic is the second area call center to be served with a suit. A suit filed last year in Kansas City against TeleTech now involves 1,000 former employees, with at least 200 from the Niagara Falls facility.

That case is currently in arbitration, and TeleTech representatives continue to assert that they did nothing wrong.

Julie Lucas, a spokeswoman for the Denver-based company, said although the company does not comment on pending litigation, the truth will come out and it will show that the company has treated its employees fairly.

"At TeleTech, we take our obligations to our employees very seriously, and we remain committed to providing our employees with fair wages and benefits, as well as a good work environment," she said.

TeleTech came to Western New York in 1997 and at one time employed close to 1,000 in Niagara Falls. After a downsizing in 2001, the company began growing again in 2003 and today has over 700 employees. Globally, the company has 33,000 workers and saw revenues in 2004 of $1 billion, up from $992 million the previous year.

Hundreds respond to suit.

Hanson said the two law firms have interviewed hundreds of call-center workers around the Buffalo area as well as in other cities, and have found that the call-center industry has developed a consistent practice of squeezing 20 to 30 or more minutes per day unpaid out of its workforce.

"It does appear to be endemic to this particular industry and the reason - I think this is the case - is because the call-center industry wants to define compensable work as time on the phone with a customer," he said.

The high concentration of call centers in the Buffalo area seems to indicate that there will be many more individuals joining the two suits and any others that are filed, said Justin Swartz, lead attorney from Outten & Golden.

"You've a much larger population of call centers than I've seen in other areas," he said. "One reason for that is that call-center margins are pretty thin. In the Western New York area, they can get away with paying people low salaries and because people need jobs, they can get away with paying people for not all the time that they work. Workers are not in a position to complain about it."

James Hufnagel, who spent three years at TeleTech before being laid off with 500 other workers in 2001, says that was the case for him.

"You go along with a lot of things on a job that you know are wrong, but you just need to keep your job," said Hufnagel, who now works as a massage therapist. "You have to conform and go along. Generally, complainers are looked down on."

Hufnagel said the work environment at the company was awful, with constant threats of penalties or termination if workers were not ready to take calls at the beginning of their shifts.

"It got to be a joke at this place," he said. "They even had video monitors around the ceiling."

Martin Hens said he worked off the clock before his shift at ClientLogic because everyone was expected to do so.

"Honestly, I didn't really think of it. It was something they told us to do to make sure we were ready to work at the beginning of the shift," he said.

Hens, who worked for the company for 2 and a half years, has since returned to his former career in restaurant management. He says he'll never take another job in a call center again.

His co-plaintiff, VanVoorhees, said he would consider it if the terms of employment were made clear.

"I would definitely want to review what their working conditions would be," said VanVoorhees, who is doing independent contracting in the computer field. "I don't want to work for free. I know a number of my co-workers have landed at a couple of the other area call centers and are much happier than they were on Hertel Avenue, so perhaps the grass is greener on the other side."

Hanson said the two firms are planning to file additional lawsuits against call-center employers in the Buffalo area for unlawful labor practices, similar to those filed against ClientLogic and TeleTech.

By Tracey Drury Business First of Buffalo

Updated: 8:00 p.m. ET June 12, 2005

©2005 Buffalo Business First

©2005 MSNBC.com

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