WA pay transparency lawsuits spark ‘cottage industry’ claims

After two years and roughly 250 lawsuits, Washington’s pay transparency law is entangled in an unexpected kind of allegation. 

The Seattle-based Emery Reddy law firm, which has filed the majority of those cases, has been accused in recent public hearings of creating a “cottage industry” to benefit from the regulation enacted in 2023.

The law, an update to Washington’s Equal Pay and Opportunities Act, is meant to help close the gender wage gap by requiring employers to include a salary range in every job posting. Doing so ensures companies offer a fair wage to job candidates, regardless of gender or past salary history, according to advocates of the law.

Now, a handful of business advocacy groups, like the Chamber of Commerce, and companies that have been on the receiving end of Emery Reddy’s lawsuits are accusing the law firm of taking advantage of the statute. 

“Serial” job applicants scour the internet for job postings that might not comply with the law and then file numerous lawsuits against those companies, the business groups allege. Those job applicants don’t apply for the role in hopes of securing a job, the groups continue, but instead to reap the financial benefit of a favorable court ruling.

Timothy Emery, the founding partner at the Emery Reddy law firm, doesn’t see it that way. 

In his eyes, the slew of lawsuits from his firm are an ongoing battle against corporations that don’t want to share wage information because it would upend the historical precedent of paying women and people of color less money than their white male colleagues. 

“The law is doing what it was intended to do,” Emery said. “Through our lawsuits, through our advocacy on behalf of workers, the compliance rate is ticking up quickly. … With every new lawsuit, it continues to improve.”

The lawsuits and resulting allegations against Emery caught the attention of Washington legislators. Last month, Sen. Curtis King, R-Yakima, introduced an amendment to the pay transparency law that would give employers a grace period to change a job posting after they have been notified by job seekers or government officials that the job ad is not in compliance with the law.

The allegations also made their way to the Washington Supreme Court, which is now considering how to define a “job applicant” in this statute.

Both decisions could change how the law is enforced. Those on the business side say the changes would alleviate pressure on companies that are trying to comply with the legislation and can’t afford the crushing legal fees of a class action lawsuit. The law was not intended to spark a frenzy of litigation, those groups argue.

On the other side, Emery, job seekers and other worker advocacy groups worry any changes to the law would weaken it, leading to noncompliance and hampering progress on wage equality. Companies are incentivized to comply to avoid costly litigation, they say. 

It could take months to see a decision from the Supreme Court or a vote from the state Legislature, and just as long for the hundreds of lawsuits to reach a resolution. But in the meantime, advocates from both sides say these decisions will set a lasting precedent for job seekers and employers in the state. 

Private right of action

Washington’s law provides two ways to check that employers are following the statute, which sets it apart from similar legislation in 14 states around the country.

Like other states, Washington’s Department of Labor and Industries is able to investigate and penalize employers if they post jobs that don’t comply with the pay transparency law.

Job applicants in Washington are also granted a “private right of action,” or the ability to sue employers for alleged noncompliance. California is the only other state with a similar provision.

That private right of action has led to higher compliance here than in other states with similar laws, according to Cassandra Lenning, an attorney with the law firm Outten and Golden who follows pay transparency legislation around the country.

In states that relied only on investigations from government agencies, the law didn’t move the needle on closing the gender wage gap, Lenning said. That’s partly because government investigators are strapped for resources.

“What we’re noticing is in the states where the legislature delegated private citizens to act as enforcers … employers are getting on board,” Lenning said.

In Washington, L&I has received 268 formal complaints since the law took effect, according to a spokesperson. Of those, it closed 225 cases, mainly because L&I did not accept the complaint.

The number of complaints the agency accepts has decreased over the lifespan of the law, the spokesperson said, because L&I has worked to make sure the complainants are applying for jobs in good faith.

Since 2023, nine employers were penalized for a total of $4,500, the spokesperson said.

Separately, under the other enforcement mechanism in the pay transparency statute, roughly 250 employers in Washington have been sued for allegedly posting jobs without a salary range. There’s no overlap between L&I investigations and the lawsuits, the spokesperson said.

If the court rules in favor of job applicants, each individual can collect $5,000 in statutory damages as well as attorney’s fees, according to the state law.

Many of the lawsuits that have been filed are seeking class action status to represent any individual who responded to the noncompliant job ad. That means the lawsuits could cost employers millions of dollars.

Just as Lenning believes the private right of action has led to higher compliance among employers, those groups representing the business community say it has opened the floodgates to “cookie-cutter lawsuits for the sole purpose of a quick profit,” according to court records.

Lindsey Hueer, the government affairs director with the Association of Washington Business, said the slew of lawsuits isn’t indicative of a “widespread problem with employer postings” but instead points to “a cottage industry.” AWB represents about 6,000 companies in the state and has been outspoken about concerns with the pay transparency law since its passage in 2022.

In court records, AWB accused job seekers who had filed multiple lawsuits of being “bounty hunters,” looking to collect the $5,000 legal remedy rather than start a new job.

As of Dec. 20, seven plaintiffs out of more than 70 have filed 10 or more cases, according to an AWB analysis. One plaintiff filed 16, while another filed 20.

The Emery Reddy law firm faced the same accusations, with critics claiming it was out to collect millions in attorney’s fees.

Based on 20 lawsuits that have been publicly settled, the AWB calculated that attorneys could collect $183 million if all of the pending lawsuits go in their favor. Because Emery Reddy has filed 75% of the roughly 250 lawsuits, it would collect the majority of that sum.

Emery pushed back on the idea that there were serial job applicants looking to profit from the noncompliant job postings. It’s not unusual for job seekers to apply for multiple jobs at once.

To Lenning, there’s an easy fix. “As long as (employers) are in compliance and only putting forward compliant job postings, that cottage industry disappears,” she said.

Supreme Court question

In December 2023, Cherie Burke, a King County resident, applied for a cashier and customer service position at Washington Fine Wine and Spirits’ Tukwila location.

Last March, another King County resident, Lisa Branson, applied for two roles at Fine Wine and Spirits: a delivery driver and merchandiser position at the Lynnwood store and an assistant manager role at the Tukwila location. 

Both women later sued Fine Wine for failing to include wage information on the job postings. Because they could not determine a plausible wage scale, attorneys alleged in court records, Branson and Burke could not compare the pay with other open jobs at the time or prepare for negotiating a salary if the company made an offer. 

Fine Wine declined to comment for this story but said in court records that it had not violated Washington’s pay transparency law. It argued that Branson and Burke did not apply in good faith and did not intend to take the job. 

They were not “bona fide” applicants under the pay transparency statute, attorneys for Fine Wine wrote in court documents.

That case is now before the state Supreme Court after a federal district judge in Seattle asked the higher court to answer a question: What does a plaintiff need to prove to be a “job applicant”?

Emery argues a job applicant should simply be anyone who applies for a job. Creating additional requirements would subject job seekers to hours of scrutiny if they raise concerns, he argued.

Vanessa Herold, a plaintiff in several of Emery’s cases, testified at a recent Senate hearing that after she sued US Foods for failing to include a salary range, attorneys representing the company spent seven hours questioning her about financial history, years of previous job applications, tax records and the whereabouts of her children. 

Herold has filed seven lawsuits accusing Washington employers of failing to include salary information.

Attorneys for Fine Wine are arguing that the ability to sue should only apply to “bona fide” job candidates to prevent “fraudulent” job seekers from taking advantage of the pay transparency statute. 

“The purpose of the statute was not to penalize employers. The purpose of the statute was to create a level playing field for job applicants or potential employees,” attorney William Murphy, who is representing Fine Wine, said at a Supreme Court hearing in February. 

“That purpose does not apply when the applicant is not really seeking a job. They’re not interested in playing on the field.”

At the February hearing, the Supreme Court justices put attorneys for both parties under pressure. They questioned the broad definition that anyone who submitted an application should count. What about an 18-year-old who applied for a neurosurgeon role without a medical degree, or a college degree?

And they pushed Fine Wine to specify how courts should determine who is a qualified candidate for job postings that don’t include specific certifications and went so far as to accuse the company of using the type of discriminatory language that the pay transparency statute was intended to prevent. Murphy denied that Fine Wine had been discriminatory and said the company was an equal opportunity employer.

Justice Helen Whitener opined that the intent of the job applicant might not matter because, either way, “they’re holding the employer accountable.” 

Change to the law

When the Supreme Court issues an opinion on the definition of a job applicant, it could set a precedent for the dozens of pending lawsuits. But Lenning, from Outten and Golden, said that won’t be the end of the battle. 

“I don’t think the state Supreme Court will be the final arbiter of this question,” she said. “It’s not at all uncommon for states, or even Congress, to go back to the drawing board.” 

That’s already happening in Washington.

In January, King introduced an amendment that would give employers 10 to 14 days to correct a job posting after they have been notified that it does not include a salary range. It is meant to bring the law back to its original purpose, King said. 

The bill still has to go to a vote before the state Senate and House, but it appears to have bipartisan support. Sen. Rebecca Saldaña, a Democrat who represents parts of Seattle and Renton, said at a February hearing she appreciated “all the parties coming together to address what I don’t think was really a huge problem but we did have a couple of instances.” 

Business trade groups cheered the proposed amendment as a “compassionate fix for a great policy idea,” as Gabriel Neuman, from Washington’s LGBTQ+ Chamber of Commerce, testified at a January Senate hearing. But others worried it would put barriers up for reporting noncompliance and weaken enforcement.

Emery said it would create a “whack-a-mole” situation for job applicants — once one posting is changed, they’ll have to alert the employer about another. 

Emery didn’t set out to be a crusader for Washington’s pay transparency law, he said, but now he feels he doesn’t have a choice. He’s fighting a “multiple-front battle” as the Supreme Court considers the language of the statute at the same time the Legislature considers a change. 

“None of this is happening in a vacuum,” Emery said, emphasizing that the rest of the country is watching how these cases play out in Washington to determine what steps they might take when it comes to pay transparency litigation. 

“Understand that we have a civil rights movement for pay equality in its infancy, and this either lives or dies here,” Emery said. 

Earlier this month, his firm filed four more lawsuits accusing Washington employers of failing to post a salary range.