An employee of real estate giant Zillow Group has filed a class-action lawsuit against the company, alleging ongoing labor code violations, including failure to pay overtime wages and unfair business practices.
Zillow business consultant Nicole Correa filed the complaint in California Superior Court in Orange County on March 18. She has worked at Zillow since October 10, 2016 as part of the company’s inside salesforce. According to the complaint, Zillow’s salesforce is made up of sales executives who make initial sales to agents and business consultants who handle the accounts.
Screen shot of Nicole Correa’s LinkedIn profile
Business consultants make $24.04 an hour and also earn sales commissions, as do sales executives. They are assigned a monthly quota and paid based on “churn”: how much new business they produce and existing business they lose. The complaint alleges that Zillow uses an illegal chargeback policy that nets out the new business revenue and the loss of revenue in a salesperson’s accounts — regardless of whether the salesperson was personally responsible for the loss and even if the salesperson could do nothing to prevent it, such as when an agent never pays or their credit card is denied.
The suit also alleges that Zillow failed to calculate overtime wages correctly, basing them on a salesperson’s hourly rate rather than a combination of the hourly rate and commission wages, thereby violating minimum wage and overtime regulations.
“Zillow’s conduct of creating an illegal commission structure; its failure to pay the minimum wage for all hours worked; its failure to pay the proper overtime rate; its failure to reimburse its employees for necessary expenditures; allowing its employees to work without providing accurate itemized wages statements; and failing maintain accurate records directly violate state law, constitute and was intended to constitute unfair competition and unlawful and unfair acts and practices within the meaning of the [Unfair Competition Law],” Correa’s attorneys wrote in the complaint.
In an emailed statement, a Zillow Group spokesperson told Inman, “We are aware of the lawsuit filed in California Superior Court. While we won’t discuss ongoing litigation, we take seriously any allegations regarding our employee compensation practices.”
The suit seeks to represent an estimated 200 to 300 employees who worked for Zillow as sales executives or business consultants in the past four years and were paid according to the commission scheme described in the complaint.
The claims in the suit include unlawful deductions from wages, failure to pay minimum wage, failure to pay overtime wages, failure to furnish timely and accurate itemized wage statements, failure to keep required payroll records, failure to pay all compensation due upon discharge, and unlawful and/or unfair business practices.
“California employees are entitled to receive all the wages that they earn and oftentimes in commission-type jobs they are denied compensation for what they do,” Aashish Desai of Desai Law Firm, one of Correa’s attorneys, told Inman in a phone interview.
“Salespeople are the backbone of many companies including Zillow and [Zillow] should carefully follow the law.”
He expects to find out by the end of the year whether the suit is granted class-action status.
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