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2015 Clearinghouse Rev. 1 (2015)

handle is hein.journals/clear49 and id is 1 raw text is: Finishing What You Started Collecting on Judgments for Low-Wage Workers BY MICHAEL HOLLANDER As employment attorneys, we must ask ourselves what rights we are vindicating for our worker-clients when we win a judgment against a bad em- ployer but do not collect on that judgment. To many small employers on the margins of the business world, a judgment is nothing more than a pesky piece of paper. Unless that paper is turned into real consequences, the employer will freely go about business as usual: shortchanging workers. Here I examine the collections process for wage judgments, with a focus on employment cases for low-wage workers. I review how to collect in employment cases and touch on ancillary issues that may come up in collections cases. I discuss wage liens, a new tool being introduced throughout the country to aid in collections of wage judgments for low-wage workers. Although I focus on collections in low-wage-worker cases, the concepts can be applied to any collections case.' A Typical Worker Story Javier Lopez worked at a trendy restaurant in downtown Philadelphia in 2008.2 Lopez was fired and, as is common, was not paid for his last two weeks of work. He was owed just over $700. Community Legal Services filed suit for Lopez for 1 The wage-judgment collections discussed here present a role reversal for typical legal services attorneys usually we are defending our clients against creditors, rather than acting as a creditor's advocate. But regardless of which side of the table our clients sit on, they are always at a disadvantage compared to their larger and more sophisticated adversary. Helping our clients collect their unpaid wages is critical to their economic security and finding a road out of poverty. 2 I am using a pseudonym for our client. $2,700, a figure that included penalties and attorney fees, and we won a default judgment. Then the real work began. Although the restaurant was still operat- ing, it was doing very badly. We tried to garnish the restaurant's bank account, but it was empty. The owner offered to pay $75 a week, but Lopez rejected that offer, as it would have taken Lopez the better part of a year to collect his judgment with such a low weekly payment. And the owner's proposed plan assumed that the restaurant would stay open that long. are assets that would allow collections on an eventual judgment and (2) whether there are alternatives to litigation that will improve the client's chances of getting paid and getting paid more promptly. Making the first evaluation can be difficult, if not impossible, before a case begins. Large employers and their assets can be tracked by using various online databases.3 Small, fly-by-night employers, however, may leave no trace of their existence (often by design). What rights are we vindicating for our worker-clients when we win a judgment against a bad employer but do not collect on that judgment? Ultimately we listed the contents of the restaurant for sheriff's sale. To generate bidders for the sale and put pressure on the owner, we notified all of the local restaurant supply stores about the pending sale. For fear of losing all of his equipment at pennies on the dollar, the owner had his brother pay the judgment the night before the sale. The restaurant permanently closed the next day. The Collections Process for Wage Judgments The collections process for wage judg- ments begins the moment a client walks into your office. From the inception of a case, a lawyer should evaluate, with respect to collections, (1) whether there Prelitigation Asset Evaluation. When evaluating whether the employer has assets, look for these generally good signs: *Your Client Was Paid by Check. Great- we know where the employer's bank account is or was, unless, of course, our information is from bounced checks. * The Employer Has a Physical Location such as a Store or Restaurant. A physical presence suggests that the employer is not fly-by-night and likely has a bank account. Even if the employer has no bank account, the employ- 3 E.g., Lexis Public Records Search, Westlaw Public Records, Dunn and Bradstreet, Experian's Debt Recovery Services, and UCC liens. JANUARY 2015 CLEARINGHOUSE ARTICLE I CLEARINGHOUSE ARTICLE I JANUARY 2015

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