ZipRealty Inc. has agreed to pay $586,000 to settle claims by the California Labor Commissioner that the company failed to pay minimum and overtime wages to four of its agents in Kern County.
The Emeryville, Calif.-based brokerage denies the allegations, and California Labor Commissioner Julie Su will continue to press a case filed on Sept. 26 in Alameda County seeking more than $17 million in back wages, damages and penalties on behalf of ZipRealty agents throughout California.
In Kern County, a Superior Court Judge on Sept. 1 awarded $330,000 to four former ZipRealty agents who filed complaints with the labor commissioner last year. ZipRealty filed a motion for a new trial on Nov. 1, but the settlement vacates the decision and ends the litigation in Kern County.
The Kern County settlement requires ZipRealty to pay the four agents the $330,000 judgment, plus an additional $25,000 each, for a total payout of $430,202. ZipRealty also agreed to pay $155,866 in attorney’s fees and expenses to the Labor Commissioner.
The decision of the Kern County Superior Court will not be binding on a case currently pending in Alameda County, "but the analysis of the Bakersfield court is extremely compelling and we believe that there will be a similar result in the case pending in Alameda County," Su said in a statement.
ZipRealty is "pleased to have reached a resolution vacating the judgment against ZipRealty in the Kern County matter and eliminating the need for an appeal," company Vice President and General Counsel Samantha Harnett said in a statement.
"This enables us to focus our efforts on aggressively defending against the Department of Labor’s claim and establishing that our practices across the state of California were lawful."
In a Sept. 26 complaint in Alameda Superior Court, California regulators claimed ZipRealty agents often worked far in excess of 40 hours in a week, but "typically received no pay for a large majority of the pay periods they worked after 2005," when housing sales slowed.
ZipRealty has denied the allegations, saying its agents were classified as "outside salespersons" exempt from overtime wage requirements.
ZipRealty agents were compensated "in full compliance with California law" during the period in question, Vice President and General Counsel Samantha Harnett said in a statement released by the company after the Alameda County case was filed.
Before converting its agents to independent contractors last year, ZipRealty paid them commissions, customer satisfaction bonuses, and benefits.