PORTLAND — Lawsuits against one of Portland’s best-known young companies allege that Ruby Receptionists overcharged 18,000 clients by more than $30 million.
Parallel cases filed in federal and state courts seek class-action status, alleging the Portland-based answering service didn’t property disclose how it charges for time its operators spend talking with clients. And the suits allege Ruby charged clients for time callers spent on hold.
Ruby has offered to pay about $350,000 – plus attorney fees – to resolve the accusations over how it charged for hold time. The company stridently defends its billing practices, though, and maintains it clearly disclosed them to customers.
“We kind of feel like this is a little bit of a punch below the belt,” said Ruby CEO Kate Winkler. She said the company prides itself on its relationship with clients and said the suit misrepresents that.
“It’s not representative of who we are,” Winkler said.
The suits date to 2017 and 2018 and have been steadily working their way through the courts since then, with plaintiffs’ attorneys pursuing federal and state claims simultaneously in hopes of expediting the case. The federal lawsuit is tentatively scheduled to go to trial next fall.
“The plaintiffs are confident that a Portland jury will understand that when somebody contracts to purchase something they should get everything that they paid for,” said Keith Dubanevich, an attorney with the Portland firm Stoll Berne. “In this case Ruby didn’t deliver what it was obligated to provide.”
Ruby sought to have the state litigation dismissed but a Multnomah County Circuit Court judge ruled on Christmas Eve that it can go forward.
Founded in 2003, Ruby serves as an answering service for small law firms and other businesses that don’t employ their own receptionists – but want customers to reach a live person when they call.
Ruby sold a majority stake in 2015 to a private equity firm for about $39 million. The company employs 630, more than 500 of them in its offices in Portland and Beaverton.
The lawsuits’ main element relates to how Ruby charges for time its operators spend on the phone. When operators take calls, Ruby charges in 30-second increments – and rounds up after each 30 seconds. So if an operator spends 31 seconds on the phone, Ruby charges for a full minute.
Ruby says that is standard practice in its industry and that it discloses its policies clearly. Plaintiffs allege the company buries its charging policy in long legal disclosures and that it instructs customer service personnel to downplay the practice.
The plaintiffs’ attorneys say that because Ruby rounded up and charged for hold time, Ruby’s clients rapidly exhausted the receptionist service they paid for. They allege that pushed clients overage charges or more expensive service tiers.
Jill Nelson, Ruby’s founder and former CEO, said the company was always clear with clients about how the company operates. She retired last year but remains on its board.
“The entire suit,” Nelson said, “it feels very unfair and antithetical to what we stand for.”
