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DOL deal clears the way for $6M settlement of Zillow wage-hour class action

By Pamela Wolf, J.D.

Zillow, Inc., has entered into an agreement with the Department of Labor to resolve a Wage and Hour Division review of its compliance with federal wage and hour laws as to inside sales consultants employed in Zillow’s California and Washington offices during a two-year period between 2013 and 2015. The DOL settlement agreement entered into on November 28 clears the way for the proposed resolution of a class action against the company in the Central District of California, Freeman vs. Zillow, Inc., according to the Form 8-K the company filed with the Securities and Exchange Commission.

The sales consultants were granted Rule 23 class certification in February 2015. The plaintiff alleged that the online real estate marketplace operated an “illegal design to circumvent Federal and State laws with the sole purpose of maximizing profits through a systematic scheme of exploiting and intimidating its employees to miss meal breaks, rest breaks, and work overtime without compensation.” Specifically, the employer prevented employees from recording their “true and correct overtime hours” in order to prevent them from receiving pay for their overtime hours worked. Further, Zillow refused employees’ requests for meal and rest periods and prevented them from leaving the office for lunch, requiring them “to continue working while eating lunch at their desks.”

To resolve the class action, Zillow would pay up to $6,000,000, subject to court approval and contingent upon its resolution of the WHD review.

Under the DOL settlement agreement, Zillow will make the voluntary payments contemplated by the Freeman settlement and establish and maintain certain procedures to promote future FLSA compliance. Zillow is not required to make any payments in addition to those contemplated by the Freeman settlement.

Zillow has not admitted liability with respect to either the DOL or the Freeman settlements.

The class action was filed in the Central District of California; the case is No. 8:14-cv-01843-JLS-DFM.