IR #2011-18
Septenber 26, 2011

Dean Fryer
Patricia Ortiz
(510) 286-1161


CA Labor Commissioner files $17 million suit against ZipRealty for minimum wages

Oakland California State Labor Commissioner Julie Su today filed a statewide lawsuit in excess of $17 million against Emeryville based ZipRealty to recover unpaid minimum wages and overtime pay for hundreds of agents throughout California. The lawsuit was filed with the Superior Court for Alameda County.

The California Department of Industrial Relations’ (DIR) Division of Labor Standards Enforcement headed by the State Labor Commissioner found that ZipRealty violated State law over a four year period by paying its real estate agent employees less than the minimum wage and no premium for overtime hours worked.

“It is our job to provide basic protections for all employees working in California,” said DIR Acting Director Christine Baker. “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.”

California’s minimum wage laws were first established in 1937 and employers are currently required to pay employees the state minimum wage of $8.00. The lawsuit seeks minimum wages in excess of $7,500,000, overtime of $1,250,000, as well as damages and penalties in excess of $9,000,000.

“In times like these, enforcement of the minimum wage is critical to maintaining a floor that allows workers to survive,” said Labor Commissioner Julie Su. “This enforcement is important not just for employees, but for hardworking employers who shouldn’t have to compete against law-breakers. We want the message to be clear: for employers who play by the rules we are on your side; employers who don’t play by the rules should be prepared to face the consequences of paying twice the amount of wages owed, as well as penalties and interest,” added Su.

The lawsuit follows a decision issued by Kern County Superior Court Judge Stephen Schuett on September 1. ZipRealty filed an appeal of an administrative award of $75,000 issued by the Labor Commissioner based upon wage claims filed in the Bakersfield office by four former ZipRealty agents. The Court Judge quadrupled the amounts previously awarded the agents to over $330,000 in damages and interest on the same claims now being asserted statewide by the Labor Commissioner.

“We learned in the course of the Bakersfield case that ZipRealty real estate agents frequently received no pay at all. As employees, these agents were entitled to payment of at least the minimum wage for all hours worked each pay period. The lawsuit filed today seeks to remedy the multiple violations statewide and to get these workers the wages they earned,” said Julie Su.
In the Bakersfield trial, ZipRealty asserted that it didn’t have to pay its agents the minimum wage or overtime premium because they were exempt “outside salespersons.” However, Judge Schuett concluded that the agents worked less than fifty percent of the time away from their offices and therefore they were non-exempt. The court also awarded substantial damages for overtime violations, pay stub violations, and interest.

The California Department of Industrial Relations’ Division of Labor Standards Enforcement adjudicates wage claims, investigates discrimination and public works complaints and enforces state labor law.  To learn more about the functions of the Division of Labor Standards Enforcement, visit our Web site at  Employees with work-related questions or complaints may call the California Workers’ Information Hotline at (866) 924-9757.

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