By John Hyde
A multi-million dollar lawsuit between a BYU student and a summer contractor is being disputed in Utah County courts.
Josh Hall, a former employee of Apex Alarm LLC, filed a $10 million class action lawsuit against Apex with two other former employees last November, accusing the company of underpaying its employees and changing contract agreements.
In court last week, Apex attorneys filed a motion to have Hall dismissed as a class representative, claiming that he cannot represent the 2004 Apex sales force because, among other things, he”s breached his fiduciary duties – meaning that Hall has shown to be more concerned with “lining his own pockets,” according to the court affidavit, than representing the Apex employees. Apex originally filed a libel lawsuit against Hall for defaming the company through his Web site in early 2005.
The dispute between Apex and this former employee has been developing for two years.
In April 2004, Hall, a recent BYU graduate, signed on with Apex as a security salesman. He had a good summer, selling more than 200 accounts and claiming to have made more than $100,000. But because of cancellations, low credit customers, and otherwise “bad accounts,” Hall was only paid for 145 sales, and now claims to have been shorted “$27,000 and some change.”
In fact, Hall claims all the Apex sales reps in 2004 were underpaid an average of $5,000 to $20,000. Through what Hall calls “bait and switch recruiting techniques,” Apex would make promises to salesmen pre-season only to change agreements right before or during the summer. In particular, Hall claims Apex changed its stance on the commission rates of low-credit customers. Hall said he has proof that Apex sold “bad accounts” to monitoring company Monitronics and failed to pay out commissions to the salespeople that sold those individual accounts.
“I want people to know they have rights and they don”t have to get ripped off,” Hall said. “These kids don”t have to be stuck believing whatever the guy says who takes them to lunch. I just want to help clean up the industry.”
Apex, on the other hand, said Hall is far from being the patron saint of the summer sales industry. Apex Vice President and CFO Keith Nelleson called the suit “ludicrous,” and questioned the veracity of Hall”s claims.
Apex claims that Hall has been trying to get money out of them since after the 2004 summer sales season. The company said the problems started when Hall approached Apex owners to sign up for his Web site, Jobfacts.org, for a monthly fee of $1,300. The Web site was intended to facilitate communication between summer sales companies and disgruntled employees, and the fee would cover arbitration fees, said Hall. But Apex now claims that membership fees simply guaranteed positive reviews on the site, and maintain that after refusing to become members, Hall wouldn”t allow them to post positive reviews.
But $1,300 a month is pale in comparison to the $500,000 settlement Apex claims Hall asked for in October 2005, promising not to initiate the $10,000,000 class-action lawsuit he was prepared to file and advertise if the money was paid. Nelleson also said Hall came to his office in the last few weeks, offering to drop the lawsuit if Apex would buy his Web site for $100,000.
Apex is using legal means to try to recover $60,000 the company paid Hall in March of 2005, made out in a personal check by company owner Todd Pederson. In order to prove to potential recruit Matt Graff that Apex did not owe Hall any money, Pedersen told Graff that if Hall could prove the company owed him $30,000, Apex would pay him double. He wrote out the check and told Graff to have Hall come in with proof if he wanted the money. Graff passed the check on to Hall, who cashed it. The money now sits in a trust fund with Hall”s lawyer.
Looking back, Nelleson thinks the $60,000 check was probably a “stupid move” on Apex”s part, considering they”re 60 grand lighter because of it.
“But it showed how confident Todd was that we didn”t owe [Hall] any money,” Nelleson said.
In any case, both sides are showing the wear of a lawsuit. While Hall said his gums are receding from the stress of it, Nelleson said Apex – which is also in litigation with at least two other security companies for unethical recruiting practices – is finding it harder to recruit.
But both sides are equally confident that they have a no-problem case in front of them.
“Without a doubt this case is locked down,” Hall said. “There is no doubt in my mind. If we go to trial there”s no doubt we”ll win.”
But John Mullen, attorney for Apex, said Hall doesn”t even have a good case, much less a shot at winning.
“I don”t see any problems [in Apex”s case],” Mullen said.
