Resolved Case

Downey v. Phenom

Overtime Rights & Exempt Misclassification Overtime Rights & Exempt Misclassification

Outten & Golden and its co-counsel represent two former sales employees of Phenom in a proposed class and collective action under the Fair Labor Standards Act and Pennsylvania state law.

Phenom is a tech company that makes HR software. It had 1,887 employees in 2025, according to PitchBook, a corporate information database that tracks privately held companies.

Despite Phenom’s $1.4 billion valuation and self-described status as a “Global HR Tech Company,” it had only one HR compliance employee, the complaint said. Its CEO publicly touted a “#notnormal workplace culture” as the company focused on rapid growth, the complaint said. Its emphasis on expansion came at the expense of legal compliance, the complaint said.

According to the complaint, Phenom pushed salespeople, who it called Sales Development Representatives (SDRs), to “do what it takes” to hit aggressive sales quotas. They were expected to cold-call and email prospects, book meetings for account executives, and hit daily outreach metrics. Despite routinely logging more than 40 hours per week, SDRs received no overtime pay, the complaint said.

A settlement was reached in this case and preliminary approval was received from the Court on August 13, 2024.

Framing the Issue

Misclassifying employees as exempt from overtime requirements causes huge shortfalls in their paychecks. A 2023 study from the National Bureau of Economic Research found that one common basis for misclassifying employees as exempt – dubiously labeling them managers, even though they don’t really manage a company – cost individuals an average of $3,000 per year.
Wage theft can affect employees in any industry. Enforcement data from the U.S. Department of Labor show major problems in food services, health care, and construction, where the number of workers affected, the number of violations that occur, and the amount of unpaid wages recovered far exceed other sectors.
It can be helpful to keep track of the hours you work and pay you receive, as well as breaks you take or expenses you incur for your employer. Having these records handy can help you spot any pay mix-ups and back you up if you ever need to sort out missing wages or overtime.

Questions about this settlement?

Eligible class and collective members were notified on September 3, 2024. If you received a notice of this settlement, you can review the settlement agreement at www.phenomsettlement.com. If you have questions, please feel free to call us at 347-390-2180 or email us at phenom@outtengolden.com.