Recent Gender Discrimination Verdict Highlights Risks To Employment Attorneys

The recent verdict in the Ellen Pao trial (against her employer for gender discrimination) highlights the risks employment lawyers face in trial. Pao sought nearly $16 million in lost wages and millions more in punitive damages. Had a verdict been returned in her favor, her attorney, Alan Exelrod, could have also petitioned the court for attorneys’ fees, estimated to be in the millions.

While attorneys’ fees are widely available in successful employment claims, they are often criticized by employers for encouraging litigation, in spite of the strong public policy that support attorneys’ fees.

While Pao’s case was in the millions, many times the recovery of wages for low-wage workers can be small. Without attorneys’ fees, employment attorneys working on a contingency fee basis alone would otherwise be dissuaded from pursuing a low-damages trial.

However, sometimes the smallest recovery can be the most important to employees. In my own practice, a recovery of $500 against an employer who wrongfully withheld $500 can make all the difference to an employee’s ability to pay rent, a cell phone, gas, food, etc. A small recovery may also represent the end of an illegal wage practice.  Imagine an employer who requires employees to work “off the clock.” or denies rest-breaks or meal periods.  In total, these damages may not amount to millions, but pursuing recovery of these small claims ensures workers are paid correctly under the law.

These attorney fee statutes for wage cases are designed to permit employees to recover full wages where legal fees would greatly exceed the underlying claim.[1] The purpose of the fee award is to “ensure effective access to the judicial process by providing attorneys’ fees for prevailing plaintiffs with wage and hour grievances”.[2]

[1] See, e.g.: Brandt v. Impero, 1 Wn. App. 678, 682, 463 P.2d 197 (Div. I, 1969).

[2] Fegley v. Higgins, 19 F.3d 1126, 1134-35 (6th Cir. 1994).

Paseo, The Workers, and The Sandwich Caught In-Between

Yesterday, hungry customers of beloved Paseo Restaurant in Seattle were met with a simple sign on restaurant doors reading

“Due to unfortunate circumstances, we are closing our doors. We appreciate all the support and loyalty you have shown us over the years. We will miss you. Thank you, The Paseo Crew.”

Paseo’s two restaurants in Fremont and Ballard, serving its famous cuban sandwich, have received national acclaim for its cheap eats cuisine and is a favorite among Seattleites.

However, local media, including the Puget Sound Business Journal, The Seattle Times, and The Stranger have reported on the possible reasons for the closing, namely, a lawsuit filed by four Paseo workers for unpaid overtime, rest-break violations, and alleged racial discrimination on September 14, 2014 in King County Superior Court (No. 14-2-24553-0 SEA). The complaint mainly alleges that employees were paid straight time wages for hours worked over 40 hours and not paid the additional 50% premium amounting to time-and-a-half. Non-exempt employees working over 40 hours per week, generally must be paid time-and-a-half their hourly rate under RCW 49.46.130.

As an attorney who regularly represents employees failing to receive wages and denied rest breaks inconsistent with the Washington Minimum Wage Act, Industrial Welfare Act and Federal Labor Standards Act, the Paseo workers’ claims, if true, are not uncommon in the restaurant industry.[1]

Workers who allege unpaid wages or denied rest breaks may file a claim at the Department of Labor & Industries or hire a private attorney. The "Dept. of L&I" may issue penalties and pressure businesses with threats to their licenses while private attorneys may seek recovery of the wages through the court system. Attorneys generally work on a contingency fee basis or recover attorneys’ fees from the other side if successful. This allows for low-wage workers to seek the services of a private attorney without the expense of hiring a lawyer by the hour.

Seattle has stepped-up efforts to address wage theft concerns by proposing new minimum-wage investigators in the Mayor’s new budget. The City of Tacoma is also making efforts to address wage theft by holding a Wage Theft Workshop for employees on November 20, 2014. For more information about the seminar, visit the City of Tacoma Human Rights Commission.

[1] See As Bad You Think It is, It’s Worse: Wage Theft Comes to America by Les Leopold published in the HUFFINGTON POST on November 11, 2014.