Help wanted (Calif. shakedown practice)?

Three years ago California’s notorious Trevor Law Group was found to be mass-mailing demand letters to small businesses alleging violations of the state’s ultra-liberal s. 17200 unfair business practices act, then settling the complaints for cash. A major furor ensued, and the state bar and Attorney General Bill Lockyer made gestures toward reforming the law to prevent law firms from running “shakedown” practices. But did it work? Mike Cernovich notices that a law firm has placed an employment ad on Craigslist seeking “additional counsel” to handle an “expanding workload”. What kind of workload? Well, it’s “primarily in the practice of wage and hour law inclusive of class actions … almost all [of our] cases are settled and are rarely tried.”

That business about settling rather than trying “almost all cases” got Cernovich’s suspicions up, and then he “saw something that made my jaw drop:”

In assessing the nature of the work and return on time spent it is helpful to keep in mind that the burden of proof is always on the employer to establish that he has paid the correct wages. The law requires that the employer keep accurate and timely maintained records that show hours worked and amounts paid. Failure to maintain such records is almost always at the heart of the case ….

Furthermore the employer will be liable for our legal fees if he is unable to defense the case. These two elements [the inability to prove us wrong and threat of attorneys fees] provide our clients with extraordinary leverage to resolve the matter.

Cernovich reads this as amounting to: “we sue employers knowing that it’s unlikely they’ll be able to produce records that will prove us wrong. … In other words, let’s just sue someone, hope he can’t produce any employment records to contradict us, threaten him with attorneys fees, and then settle the case post haste.” Or is he being too suspicious? (Mar. 8). (Updated/corrected shortly after posting to fix a mistake on my part about who placed the Craigslist ad; also retitled next morning.)

More on Trevor Law Group here and here. More on wage and hour law: Mar. 10, Jan. 9 and links from there.

One Comment

  • I can thinnk of no better word for it than “shakedown.” This is despicable — too bad the majority of courts are so reticent to employ Rule 11.