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CA Department Files $17 Million Suit Against ZipRealty Over Wages


Posted on 28 Sep 2011

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A judgment in favor of four Bakersfield, California real estate agents earlier this month led the state's Division of Labor Standards Enforcement to file a similar lawsuit against an Emeryville real estate firm on behalf of the company's employees statewide.

State Labor Commissioner Julie Su Monday filed a $17 million lawsuit against ZipRealty for alleged failure to pay overtime and minimum wage to hundreds of agents throughout California. The lawsuit was filed with the Superior Court for Alameda County.

The California Department of Industrial Relations' Division of Labor Standards Enforcement found that ZipRealty violated state law over a four-year period by paying employees less than minimum wage and no overtime.

"It is our job to provide basic protections for all employees working in California," said Department of Industrial Relations acting director Christine Baker in a statement issued Monday. "This lawsuit involving career real estate agents highlights a rapidly changing economy and labor market. Wage compression and violations of the minimum labor standards are now occurring in a wide variety of occupations even affecting employees outside traditional low-wage occupations."

ZipRealty did not respond Monday to requests for an interview.

By law, California employees must be paid at least $8 an hour.

The lawsuit seeks more than $7.5 million in back wages, $1.25 million in overtime pay, and damages and penalties of more than $9 million.

The filing not only defends employees, but also protects employers who obey the law from an unfair playing field, Labor Commissioner Su said.

Kern County Superior Court Judge Stephen Schuett on Sept. 1 issued a judgment in favor of four Bakersfield agents over similar issues. The local agents were Patrice Parsons-Adams, Steven Kinney, Nadine Radovicz and Marilee Tomczak.

Parsons-Adams, 60, started working for ZipRealty in fall 2008 but quit after less than a year.

"I figured out really quickly that it wasn't profitable for me," she said.

Parsons-Adams said she didn't join the lawsuit to be vindictive or spiteful. "I felt it was just a matter of being fair," she said. "Fair is fair."

Radovicz, 57, worked for the company for about three years and said she, too, found she couldn't really make a living at ZipRealty.

"They didn't pay us any wage," she said. "It was commission only, and it declined each year."

The Bakersfield case originally went to the Labor Commissioner, which awarded the agents $75,000. ZipRealty appealed to Kern County Superior Court, which quadrupled the amounts previously awarded to more than $330,000 in damages and interest.

ZipRealty argued that its agents were exempt "outside salespersons," but the judge concluded the agents were not exempt because they worked less than 50 percent of the time away from their offices.

Radovicz said in her job interview, the phrase "independent contractor" never came up.

"We were employees," she said.