California Realtor Settles Labor Lawsuit for $5 Million
The Labor Commissioner alleged that ZipRealty failed in its mandate to pay California real estate agents minimum wage and overtime, as dictated by California labor law at the time. The defendant maintained, according to the report, that real estate agents working as agents of ZipRealty were commissioned agents only, and thus were paid commissions on those transactions.
The California Labor Commissioner, however, held that ZipRealty sales agents were classed as outside workers at the time and thus, would qualify for minimum wage and overtime according to California labor employment law.
The plaintiffs in the lawsuit originally sought $17 million in damages and compensation. However, according to the Thomson report the Office of the Labor Commissioner and ZipRealty settled on $5 million in exchange from a release from the Labor Commissioner related to all claims, in addition to no admission of wrongdoing.
ZipRealty, according to a statement made by the firm's President and CEO, felt the lawsuit was without merit. "We are settling this matter because we believe it is in the best interest of our customers, agents, employees and investors to avoid the cost and risk associated with trial," said Lanny Baker, "and to instead devote our resources to strengthening the technology-enabled solutions we provide to consumers, agents and other leading brokerages."
There was no statement from the Office of the California Labor Commissioner, in the report denoting the alleged violation to California and labor law.
It was reported the $5 million, as agreed in the settlement between the two parties, would be held on account for distribution to those individuals who were employed by the firm during the time frame represented by the California labor lawsuit.