LGCY Power Lawsuit: Were Appointment Setters Underpaid?

A lawsuit has been filed against LGCY Power over its alleged failure to pay appointment setters in accordance with federal labor law.

Specifically, the case claims the solar energy company has misclassified appointment setters as independent contractors – i.e., people who are self-employed. By doing so, LGCY Power has deprived these workers of certain rights afforded to bona fide employees, including minimum and overtime wages, the complaint contends.

Employee vs. Independent Contractor: What’s the Difference?

In general, an independent contractor is a self-employed individual who performs services for another business or entity. Independent contractors can decide how they want to do their work and have freedom regarding details like their schedule or which projects to take on or decline.

Employees, on the other hand, have much less control over how their duties are performed. Although there are no hard-and-fast rules to determine whether a worker is an independent contractor or an employee, one of the biggest factors a company must consider when classifying workers is the level of control it maintains over their jobs. The more control a company has over an individual, the more likely it is that they are an employee and not a contractor.

Companies that hire independent contractors don’t have to contribute or withhold taxes for Social Security, Medicare or unemployment from their wages. In addition, independent contractors aren’t entitled to certain protections provided to employees under state and federal labor laws, such as minimum wage for all hours worked and time-and-a-half overtime pay for every hour worked over 40 each week.

For these reasons, a company may be financially incentivized to misclassify its employees as independent contractors.

What Does the Lawsuit Say About LGCY Power?

According to the case, LGCY Power intentionally misclassifies appointment setters as independent contractors in order to avoid spending “thousands of dollars” on proper wages and benefits that employees are owed under state and federal labor laws.

The lawsuit claims that LGCY Power controls “nearly every aspect” of appointment setters’ work, which involves advertising the company’s residential solar systems in retail stores like Home Depot and through door-to-door marketing. For instance, LGCY Power creates these workers’ schedules, bars them from working for competitors and instructs them “on what to say, how to say it, and how to present themselves” when pitching potential customers, the complaint says.

Per the filing, LGCY Power appointment setters should have been classified as employees and paid minimum wage for all hours worked and time-and-a-half wages for all hours worked in excess of 40 per week.

However, rather than pay appointment setters an hourly wage or salary, LGCY Power pays the workers exclusively through commissions based on the number of successful appointments they schedule for potential customers to meet with sale closers. The case alleges that LGCY Power’s payment model has caused appointment setters to make “well below minimum wage.”

The plaintiff, a former LGCY Power appointment setter, also claims she regularly worked overtime but never received proper compensation.

This isn’t the first time LGCY Power has come under fire for its alleged wage violations. In June 2023, the court approved a $3.8 million settlement to end a class action lawsuit that claimed the company underpaid door-to-door salespeople, setters, closers and lead generators in California and otherwise violated their employment rights.

How Could a Lawsuit Help?

A successful lawsuit could help current and former LGCY Power appointment setters collect any wages they were legally entitled to but did not receive. It could also potentially force the company to change its pay practices to ensure employees are paid in accordance with federal law.

Before commenting, please review our comment policy.