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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