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Company owners held personally liable after US Department of Labor investigation


A Las Vegas telemarketing enterprise that shortchanged more than 1,328 call center workers has been ordered to pay more than $1.4 million in back wages and liquidated damages by a federal court in San Francisco. The judgement 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 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. Incorporated in Nevada and based in Las Vegas, Wellfleet Communications LLC operated in the telemarketing services industry and contracted with telephone companies including AT&T and Verizon to sell various telecommunications products.


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 employers then paid workers a commission for completed sales, with no guarantee of the required federal minimum wage. As a result, workers who made few or no sales during a week, despite working long hours selling products for Wellfleet, received little or no pay.


“Employers who misclassify workers as independent contractors deny them their hard earned wages and other benefits such as paid leave and health insurance. The division prioritizes preventing this type of exploitation and works tirelessly to hold employers accountable,” said Acting Wage and Hour Administrator Jessica Looman. “The U.S. Department of Labor will use all the tools available to ensure workers receive the wages they are due.”   


The court affirmed the department’s finding that Allen and Ryan Roach were personally liable for the FLSA violations, and were ordered to repay $728,994 in back wages and an additional $728,994 in liquidated damages to the affected employees.


“The Department of Labor will defend the rights of workers to be paid as the Fair Labor Standard Act requires, and seek to recover back wages and liquidated damages when an employer violates those rights,” said Acting Regional Solicitor of Labor Susan Kumli in San Francisco.


“This investigation and litigation should serve as a stern reminder of the consequences that face those employers who take advantage of their workers and competitors.”

Be Audit-Secure™

Do you ever find yourself in a spot where you just need to argue the options for a specific HR dilemma?


How about when Big Boss is pushing back on what you KNOW needs to be done, but they just cannot seem to wrap their brains around the suggestions you are making?


Sometimes you need a good civilized argument session where you can state your case and an unbiased 3rd-party can clap back with the hard questions that you will be required to answer if the issue does not get solved before a claim, charge, or lawsuit is filed against the company and/or the responsible parties within.


When these issues come up: Let’s Argue it Out!


As an EEOC Certified Investigator, I have seen a lot of tough issues that employers really should have researched before making the decision to “do it the way we’ve always done it” OR “not let some employee handbook boss me around”.


How about the time when the accused is your friend or you have some sort of relationship with the person that could cause others to view you as biased during an investigation. Recusing yourself may be the indicated course of action in some cases.


Remember, sometimes even decisions resulting from only the best intentions still pave the road to… well… court! (gotcha!)


I am ready, willing, and able to provide these services at the same rate as my regular telephone or Zoom consultations.




And, don’t forget – I am a credentialed EEO INVESTIGATOR.


So, when you come across issues related to discrimination or harassment and need an unbiased 3rd-party to conduct the investigation please also think of me.


I have been fully trained by EEOC Administrative Judges and other Investigators.


There is no need to dig the hole deeper by trying to do these things on your own when conflicting interests may be in play.


So, next time you want to Argue it Out or pass the investigation on to a professional investigator who has no skin in the game, think of me!



Lisa Smith, SPHR, SHRM – SCP

Certified EEO Investigator (EEOC)

Lead Support and Content Chief – HelpDeskforHR.com

“You cannot be audit-proof, but you can Be Audit-Secure.”

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