Agent is alleging she’s owed for working full-time hours at a Miami sales center
A Miami real estate agent is challenging the time-honored notion of agents as independent contractors with a lawsuit that seeks class action status.
Former Cervera Real Estate agent Beatriz Santamaria is suing the Miami brokerage for allegedly misclassifying salespeople as independent contractors and violating minimum wage and overtime provisions of the Fair Labor Standards Act.
Santamaria is alleging that Cervera, led by Veronica Cervera Goeseke and Alicia Cervera Lamadrid, has a
longstanding policy of misclassifying its employees as independent contractors. The Miami real estate agent worked out of the University Bridge Residences sales gallery near Florida International University, allegedly working more than 40 hours a week.
Like most agents working at new development projects, Santamaria’s only form of payment was in the form of a draw, or advance, on sales commissions that agents are required to pay back to their brokerage, according to the lawsuit. She did not receive a salary or hourly wages.
The lawsuit was filed earlier this month in Miami federal court.
Because independent contractors are exempt from the Fair Labor Standards Act, they don’t receive the same minimum wage and overtime benefits.
The timing is auspicious.
In California, agents will also not be included in a new state bill that seeks to reclassify independent contractors of the gig economy. That kind of change would force brokerages to reclassify their agents as employees, driving up costs and threatening their bottom lines.
Florida courts rely on the federal Fair Labor Standards Act, and Florida has specific provisions related to issues such as minimum wage.
Attorney Brett Schneider, who leads Weiss Serota Helfman Cole & Bierman’s labor and employment practice group, said that because most real estate agents are classified as independent contractors, a change to that practice could have a major impact on the industry. He is not involved in the Cervera lawsuit.
There are certain factors that help determine whether someone is an employee or an independent contractor, according to the U.S. Department of Labor. Those include the permanency of the relationship between the employer and the alleged contractor and the extent to which the services rendered are an integral part of the employer’s business.
“It’s not up to the employer to determine whether the employee is an independent contractor or an employee,” Schneider said. “As I tell clients frequently, ‘You can call an elephant a tiger, but it doesn’t make them a tiger.’”
Government agencies, such as the Internal Revenue Service, and the courts classify workers and can issue penalties if employers misclassify them.
Raymond Dieppa, Santamaria’s attorney, said the next step for the lawsuit would be for the court to certify it as a class action lawsuit. He said he could not disclose whether he was speaking with other Cervera agents to join the suit.
The class action certification could happen between three and six months, he said.
A spokesperson for Cervera said the firm does not comment on litigation.
Cervera was ranked No. 18 in Miami-Dade County, according to The Real Deal’s ranking of top brokerages, based on sales that closed between July 15, 2018 and June 15, 2019. The firm closed 301 deals totaling $184.5 million. The ranking does not include development presales.
According to the lawsuit, agents spent over 90 percent of their normal work days in the sales center, and could rarely leave the office. Being absent, the complaint alleges, could result in discipline of a salesperson. Agents were required to complete paperwork, attend events and complete other office duties.
In March 2018, the developers canceled the University Bridge condo project, at 740 Southwest 109th Avenue in Miami, and converted it to rentals, returning deposits to more than 200 buyers.
Dieppa said that while the draw system is very common in new development sales, “unfortunately what ends up happening is they work a lot more hours than what their draw is, or are given some excuse as to why they can’t get their commissions.”
In a separate but similar lawsuit filed in 2017, Dieppa represented a Fortune International Realty agent who sued the brokerage for unpaid work. That resulted in a settlement, he said.
“It’s not a good system,” Dieppa added. “It’s not a legal system.”