Lawsuit: Litigation financier Oasis Financial broke labor laws, required 'overbroad' non-compete contracts

By Jonathan Bilyk | Oct 18, 2016

Former employees of a company specializing in providing money to people looking to sue have sued their ex-employer, saying the company improperly forced employees to work too many hours without overtime pay, and has wrongly attempted to enforce employment agreements forbidding former employees from working for competitors for as many as two years.

On Oct. 17, plaintiffs Tyler Beauchamp and Trevor Scott filed a complaint in Chicago federal court against Rosemont-based Oasis Financial, alleging the company, which specializes in financing personal injury and workers' compensation lawsuits, violated federal and state wage and labor laws in its treatment of them and other employees.

They were joined in the lawsuit by Signal Funding, a startup competitor to Oasis, which was founded by a former chief executive officer at Oasis, and which had attempted to hire Beauchamp and Scott, among other former Oasis employees.

 The complaint largely centered on Oasis’ attempt to enforce clauses in employment agreements Beauchamp and Scott said they were forced to sign, forbidding them from working for other litigation financiers or from soliciting business from attorneys for as long as two years.

According to the lawsuit, Beauchamp had worked for Oasis since 2008, and Scott began working for Oasis in 2010. Both worked as “Case Manager/Sales Director” at the company, and were paid primarily under a commission schedule. According to the complaint, they “primarily answered inquiries from plaintiff customers and/or their attorneys seeking legal funding in specific states that came in through the internet or the (Oasis) call center.”

The complaint said Beauchamp and Scott each also had a list of attorneys “to whom they could sell, mostly drawn from the states within … assigned territories.” The list of attorneys would vary, however, depending on whether those attorneys worked with Oasis within six months of being placed on such a list.

According to the complaint, Beauchamp and Scott became unhappy working at Oasis, beginning with the departure of former Oasis CEO Gary Chodes in 2013. The lawsuit alleged the culture at Oasis changed with the arrival of new CEO Ralph Shayne, resulting in employees working longer hours “for less pay” and hurting employee morale.

According to the lawsuit, Oasis allegedly required employees to work five 10-hour days each week, and “discouraged” employees “from taking lunch breaks.” The lawsuit alleged the company did not increase employees’ pay to compensate for the added work hours, and did not pay overtime.

Beauchamp and Scott also alleged the company revised its commission structure to “allow Oasis, in its discretion, to both ‘clawback’ previously earned and paid commissions and even to deduct penalties from earned but not yet paid commissions.”

Such alleged conditions are what purportedly led Beauchamp and Scott to seek employment elsewhere, when Chodes opened Signal Funding in 2015, after his two-year non-compete contract expired. According to the complaint, Signal Funding will offer “a variety of consumer funding services … and a full range of plaintiff litigation funding that will not be limited to just personal injury and worker’s compensation plaintiffs.”

According to the complaint, Beauchamp and Scott accepted job offers from Signal Funding about a week before filing their lawsuit, using attorneys funded by Signal.

The same day they began working for Signal, Beauchamp and Scott allegedly received letters from Oasis citing the non-competition and non-solicitation contracts they signed, and demanding they stop working for Signal. They responded by suing Oasis, asking the court to declare those contracts to be “overbroad” and unenforceable.

The lawsuit asked the court to order Oasis to pay damages including double the amount of unpaid overtime wages, assorted statutory damages and penalties, punitive damages and attorney fees.

Beauchamp and Scott are represented in the action by attorneys Kerry E. Saltzman and Aaron Chaet with the firm of Williams Bax & Saltzman, of Chicago, and attorneys Jeffrey A. Leon and Grant Lee, of Quantum Legal, of Highland Park.

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Organizations in this Story

Oasis Financial Quantum Legal LLC Williams Bax & Saltzman P.C.

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