June 18, 2015

Retaliation, minimum wage trial ends in settlement (Updated)

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Second Judicial District Court in AlbuquerquePhoto Credit: Andy Lyman

A two-year legal battle between an Albuquerque restaurant and a former employee over a  dispute related to paying Albuquerque’s minimum wage is on its way to an end.

Bernalillo County Court House Photo: Andy Lyman

Bernalillo County Court House
Photo: Andy Lyman

In a settlement approved by a district court judge, the Route 66 Malt Shop and a former employee, Kevin O’Leary, agreed out of court in the case. The terms of the agreement are not public.

On Wednesday after a day-long trial, both parties agreed to settle after which  Second Judicial District Court Judge Denise Barela-Shepherd dismissed the jury.

The court case began in 2013, when O’Leary’s attorneys, along with the City of Albuquerque, filed suit against the Route 66 Malt Shop and the family that operates it. According to the complaint, Diane Avila, Eric Szeman and their son Andrew Szeman, who run the restaurant, retaliated against O’Leary after he took his concerns about his wages to the news media.

During the trial, which began on Wednesday, O’Leary’s lawyers and an assistant city attorney argued that Eric Szeman paid his employees less than Albuquerque’s new minimum wage. Albuquerque voters approved a ballot measure to raise wages for both tipped and non-tipped employees in 2012.

One of O’Leary’s attorneys told jurors that the senior Szeman told his employees that he did not intend to raise their wages from the previous $2.13 an hour to $3.83 an hour. These wages were for tipped employees.

O’Leary’s attorneys also argued that once the former employee made his displeasure about the lower wages known, his employers cut his hours from 30 hours to 4 hours a week.

“True to his word, he didn’t,” O’Leary’s attorney Sara Berger said during her opening statement.

She added that he also encouraged his employees to sign a contract agreeing to accept less than the new mandated wage, consequently breaking the law, “plain and simple.”

Along with Berger, private attorney Molly Schmidt-Nowara and Blake Whitcomb, an assistant city attorney, painted a picture of retaliation by the restaurant operators towards O’Leary.

On the witness stand, O’Leary told the court that after he voted in favor of the minimum wage increase during 2012 municipal election he arrived to work where Avila asked him how he voted. According to O’Leary when he confirmed his vote in favor of the increase, Avila told him, “Eric knows and he’s pissed.”

O’Leary said after he took his story to a local television station, he was the victim of verbal and physical threats from the two Szemans.

O’Leary told the court that Andrew Szeman arrived at his house armed with a baseball bat and machete after the local news aired a story about the restaurant not paying employees the correct wage. O’Leary maintained that after Szeman came to his house, he was “flooded with fear” for at least six months.

“I had a vision of being sliced up with a machete,” O’Leary told the court.

Avila and the two Szemans’ attorney Charles Lakins argued that O’Leary’s poor work performance was the reason for the reduced work hours and that Andrew Szeman did not intend to physically intimidate O’Leary, but instead went to talk to him as a friend.

In his opening statement Lakins referenced former radio broadcaster Paul Harvey and encouraged the jurors to hear “the rest of the story.”

“This is not plain and simple,” Lakins argued.

Lakins painted a picture of a family-owned business that treated employees as members of that family. He told jurors that O’Leary was part of the family from early on and that it was actually O’Leary’s idea to create the contract that would allow lower wages.

On the witness stand, Eric and Andrew Szeman told the court that O’Leary’s poor service was to blame for a group of customers leaving the malt shop and subsequently posting a negative review on a social media site.

As for arriving at O’Leary’s house with weapons, Andrew Szeman told attorneys during questioning that he “wanted to have a civil and logical conversation” with O’Leary after the media attention.

Szeman said he arrived with a baseball bat, but left it outside, against a fence and never brought it into O’Leary’s house.

The younger Szeman said the bat belonged to a friend and was left in his car from a previous baseball game between friends. The question of why Szeman took the bat out of the car was not raised before the end of the trial.

A possible turning point in the trial came when Blake Whitcomb questioned Avila, who is the listed officer of Route 66 Malt Shop and Grill LLC, about her role as an owner. When the defense objected to the questions, Whitcomb told the court he was attempting to “pierce the corporate veil,” or hold Avila personally liable instead of her corporation.

A visibly flustered Avila finally told Whitcomb that the senior Szeman was the one who set up the limited liability corporation and she “just cooks”.

“You need to ask him,” Avila told Whitcomb.

After about seven hours of proceedings on Wednesday, Barela-Shepherd called for adjournment for the day. After adjournment, both parties came to an agreement.

Berger, O’Leary’s attorney, told New Mexico Political Report that she was “happy with the results” and that Barela-Shepherd ultimately ruled that the minimum wage law is valid, something the judge decided before the trial began.

While the two parties have settled, the case will not be officially dismissed until an agreement is signed and a motion is filed.

UPDATE: Settlement agreement details added

Through a public records request, New Mexico Political Report obtained a copy of the settlement agreement between the defendants—the Szemans and Avila—and the one of the plaintiffs, the City of Albuquerque.

The settlement, which is partially redacted, states that the defendants do not admit fault and agreed to pay $2,500 to the City of Albuquerque by July 31. The agreement also stipulates that the “Defendants further forgo any claims related to or arising out of this litigation against any of the Plaintiffs or their counsel.”

The agreement is signed by the defendants and their attorney, Assistant City Attorney Blake Whitcomb and the two attorneys for Plaintiff Kevin O’Leary.

New Mexico Political Report contacted the City of Albuquerque’s legal department to inquire how they arrived at the dollar amount, but they could not be reached for comment.

Read a copy of the agreement obtained from the City of Albuquerque below.

Note: Sara Berger has provided legal assistance for ProgressNow New Mexico.

ProgressNow New Mexico has also helped find funding for New Mexico Political Report. ProgressNow New Mexico did not have any input on this story or the decision to write this story, nor does it exercise editorial input on any story or the story selection at New Mexico Political Report.

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