Sallie Mae Contractor Can’t Duck Call Recording Class Action Lawsuit

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On Monday, Sallie Mae’s contractor’s motion to dismiss a call recording class action lawsuit was denied by the presiding California federal judge who rejected the defendant’s arguments that the call recording did not qualify as eavesdropping since a third party was not listening into the calls. This decision will allow the Sallie Mae contractor class action lawsuit to continue with further litigation.

GC Services LP is a contractor for the student loan servicer Sallie Mae and acts as an outsourced call center for Sallie Mae. In response to the call recording class action lawsuit allegations, GC argued that under the California Invasion of Privacy Act, the company’s monitoring and recording of calls received at their own call center by employees of the same company did not constitute eavesdropping.

The company’s argument relied primarily on a precedent set by an unpublished 9th U.S. Circuit Court of Appeals decision ruling that a supervisor could legally monitor consumer calls made by their employee because they work for the same company. Under the law, the company is considered “one person” making the supervisor’s call monitoring fair and legal.

However, U.S. District Judge John A. Houston disagreed with GC’s arguments, stating that in a 2011 case Kight v. CashCall Inc., “the California Court of Appeal found permitting an employee to secretly monitor a call between a customer and another employee defeated the statutory purpose.” Judge Houston has ruled that this reasoning similarly applies to GC’s call recording class action lawsuit allegations.

The Sallie Mae contractor call recording class action lawsuit was originally filed in 2013 by plaintiff Roederick Montemayor who alleged GC had implemented a “policy and practice” of monitoring and recording consumer phone conversations. During these calls, GC employees obtain consumer’s personal information, while neglecting to immediately inform a caller that the phone conversation is being recorded. In some cases, Montemayor claims that in some calls, consumers are never told that the call was recorded by GC.

The GC class action lawsuit further claims the company’s agents are specifically trained to record customer-employee conversations with the listening devices allegedly connected to GC’s phone lines. This allegation suggests that it is not just single isolated incidences, but rather a company-wide policy in violation of the California Invasion Privacy Act.

Over the course of the litigation for this Sallie Mae contractor class action lawsuit, Judge Houston also denied GC’s bid to dismiss the Class allegations. According to Monday’s ruling, the judge stated that it is unclear whether or not each individual Class Member will be required to prove that they were or were not warned that the GC call was recorded.

Montemayor seeks to represent himself and a Class of California consumers who had a phone conversation with GC recorded within one year of the filing date for the Sallie Mae contractor call recording class action lawsuit.

Roederick Montemayor is represented by George Thomas Martin III of Price Law Group.

The Sallie Mae Contractor Call Recording Class Action Lawsuit is Montemayor v. GC Services LP, Case No. 3:13-cv-01959, in the U.S. District Court for the Southern District of California.