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The War of Wages

In winning a $350,000 settlement against his former employers at the Colorado Department of Labor and Employment, Carlos Renteria got his job back at the Labor Standards Unit (LSU), received a promotion and raise--and nearly caused the unit to shut down.

Some of Renteria's critics are practically choking on the irony: The Labor Standards Unit is supposed to help Colorado workers resolve wage disputes with their employers but often is ineffectual, while its boss wins a big case against his employer.

Renteria's own labor dispute began when he claimed in 1988 that he was illegally demoted from his LSU job, setting off more than half a decade of litigation that finally ended last May. Renteria's large settlement was more than half the LSU's yearly budget, and the Department of Labor was at one point faced with closing the LSU for part of last year to scrape together enough money to pay him off.

Not that the LSU's closing would have had that much impact. The division's duties include conducting hearings on employers who refuse to pay their employees and ensuring that wages owed employees are paid immediately--powers Renteria himself helped draft in a 1986 bill. And many Coloradans have tried to avail themselves of the LSU's services: The division's own statistics show 8,129 requests for help from July 1994 to June 1995. But only seventeen hearings were conducted between 1986 and 1992--and none have taken place since 1993. "We discovered that we were not getting anywhere," Renteria says. "We're holding hearings, the employees are not getting paid, and it's costing a lot of money." Each of those hearings, he adds, cost between $1,500 and $2,000.

LSU staffers say just under half of the complaints they field are simply misunderstandings that are easily resolved by a letter or phone call to the employer. About 12 percent of the claims are deemed invalid, and in the rest of the cases, the complainants are told the LSU can't do anything further for them. Those people are told that they always have the option of pursuing court action against their employers. But many of those who go to the LSU are poor and poorly educated--they have neither the money nor the savvy to fight the system. Renteria, meanwhile, was able to successfully negotiate his way through the State Personnel Board's maze of hearings and proceedings and come up a winner.

His lawyer, Eva Camacho Woodard, says it is "very dangerous" to draw any comparison between Renteria's own case and those of the claimants he serves. "It's hard to see the similarity between wage-and-hour cases and Mr. Renteria's," Woodard says. Using a medical analogy, Woodard says Renteria's "ordeal" was like losing a child, while the people who come to the LSU have relatively minor problems, like cutting a finger.

"After five and a half years and beaucoup money for litigation," she says, "he walked a very difficult path." (Renteria's legal fees up to September 1992, according to documents, totaled more than $18,000.)

Not everyone sees Renteria as a martyr, however. Labor attorney Bill Rapson says someone like Renteria might have an advantage that his "customers" do not. "Oftentimes, government bureaucrats are 'in bed' with business," he says. "They see each other every day; they're articulate and understand the business environment." Many employees, especially lower-income workers, he says, "can't talk the same talk."

Rapson has done wage-claim cases before, he says, but he's "never bothered" with the LSU because "I've been told it's a waste of time--they're a bunch of dead-asses."

Even Renteria himself acknowledges that the wage-claim process his division oversees gives employers "the upper hand."

"If the employer has definitely violated the statute," Renteria says, "and refuses to pay, yes, [the employer] would have the upper hand, because the employee would have to pursue them. However, if the employee pursues it and succeeds in court, then the remedy is that the employer has to pay a penalty and attorney fees."

The LSU has no legal authority itself to pursue employers, Renteria says, and little funds to hold hearings or hire new investigators.

All of which is exasperating to people like Moe Zenati, a computer programmer who came to the LSU seeking help last year in a wage dispute with his employer. The LSU pleads poverty, Zenati says, while its boss collected a big settlement. "If you didn't have any money, where is the $350,000 coming from?" asks Zenati.

In fact, the Labor Department said it couldn't afford to pay Renteria and requested a supplemental appropriation from the legislature in March 1995. Most appropriations like that are passed perfunctorily, but the Joint Budget Committee initially voted 5-0 to reject this one.

"I was particularly disturbed, because this involved the department that handles claims against fair labor standards, and they're involved in a discrimination case in their own department," says JBC chairman Gil Romero, a House Democrat from Pueblo. "I thought it was more than ironic. There appeared to be this internal inconsistency."  

But Romero and JBC colleagues were told by Labor officials that the LSU would shut down if the legislature didn't foot the bill for the Renteria settlement. George Delaney, head of the Office of State Planning and Budgeting, confirms that it probably would have been closed for three months, and the state Labor Department's executive director, John Donlon, says some of the state's forty job-service centers would have shut down indefinitely.

"It actually would have made it worse" not to pass the supplemental appropriation, says Romero. "He's back in there, and they close the department to pay him off."

So the legislature passed the bill. Meanwhile, Renteria, who had gone on full disability after claiming that the stress related to his own job hassle had destroyed his health and led him into alcohol dependence, returned to work in June 1994. But his original job had been abolished, and he was named a "program administrator," with a new salary, according to court documents, of $63,000. That's nearly 30 percent more than he was making at his peak in the late Eighties at the agency.

Renteria says his division does the best it can do under the law, but he doesn't want to talk about his own case.

"It's been behind me a year and a half," he says tersely. "I've got very good support. I'm not looking back. You're asking personal questions. I don't feel comfortable discussing them."

In a later phone conversation, he declines comment on all questions, referring them to Donlon. "The department didn't do it for me," Renteria says. "I did it on my own." And as he is being asked whether his journey through the system is a lesson for people coming to his own division seeking help, he hangs up.

Carlos Renteria worked as head of the LSU between 1981 and 1988; his duties included investigating claims and supervising other investigators. In July 1988, however, his position was abolished and he was "reallocated" to a lower, non-supervisory slot. Renteria's annual salary dropped from $48,108 to $41,556.

He accepted the job transfer in November 1988 but appealed to the State Personnel Board, claiming the move was a disguised demotion to force him out of the department altogether. The board rejected his claim in January 1989. Soon after, he filed suit in Denver District Court against the Department of Labor.

Meanwhile, Renteria continued working in the lower position. Booted out of his office, he says, he had to work in the same space as his former subordinates where he had to endure their "snickering" about his demotion.

"We had a cubicle..." he explained in court, "...you could overhear everything. And they would talk about the change, the change in supervision, and they would laugh about it. They would mention my name. Whenever my presence was noticed, they became quiet...It was all a joke. I mean, I was the laughingstock of the office. I wasn't included in their meetings. They would hold meetings when I was away from the office. I would hear it from the clerical staff because they still felt I was being mistreated. They would tell me, 'Oh, there was a meeting here held while you were gone, and they talked about you. They said bad things about you.'"

Renteria says stress like this led to health problems including depression, high blood pressure and alcohol dependence. He adds that he was hospitalized for alcohol dependence for six weeks in 1989. At one point, he says, he was taking ten different medications. Court transcripts contain detailed discussion of what each drug was intended to do. Among the drugs were Theophylline, Prednisone, Furosemide, Drixoral and two "inhalers."

During his hearings, Renteria contended that "the stress and the deteriorating health conditions, the rage that I had," permanently disabled him from working.

"I had pains, aches and pains," he told Senior Assistant Attorney General Michael Serruto during one hearing. "I had a lot of trouble sleeping. I had trouble eating."

Serruto then asked him: "So, at that time, you were permanently disabled from performing your job duties from your health problems that you've described, your emotional, extreme emotional, stress on the job, right?"

Renteria replied: "It was mostly my mental state of mind."

While fighting his demotion, Renteria stayed on the job until December 1989, when he wrote a letter to the Public Employees Retirement Association and said he had had enough of a "job that requires me to face former subordinates that made statements against me."  

Later that month he went on disability retirement pay through PERA, receiving $1,700 a month, in addition to a $1,000 monthly pension from the Air Force, a yearly total of $32,400 before taxes.

His case dragged on from the State Personnel Board to District Court to the Colorado Supreme Court, which remanded the case back to the personnel board in late spring 1991. It wasn't until January 1993 that an administrative law judge ruled that Renteria be reinstated to his old post with back pay; six months later the board upheld the decision.

By then, Renteria's health apparently had improved--his doctor deemed him fit to return to work full-time. However, because of ongoing appeals, he didn't actually start back to work again until June 1994. It's unknown whether Renteria continued to earn disability pay between the time he says he recovered and the time he went back to work, a period of almost a year; but PERA spokesman Don Schaefer says he was legally entitled to those benefits.

Renteria's appeals were fueled by his contention that he was due both back pay and disability pay. The JBC's Romero says the lengthy and costly appeals were a big reason that legislators initially rejected the supplemental appropriation request to settle Renteria's case.

"We wanted to send a message" to the Labor Department, Romero says. "If you mishandle a case, it's gonna come out of your hide. The question I was asking was, how could you let it go this long? Why did you continue to pursue it to the absolute outcome?"

The AG's office, says First Assistant Attorney General David Kaye, continued the litigation for so long to prevent Renteria from collecting disability and back pay. And, in fact, the AG's office succeeded, because there was an out-of-court settlement and no legal precedent was set. "Conceding on those principles, particularly the issue of double recovery, likely would have cost the taxpayers far more in the long run through repetition in other cases," Kaye says. "The matter had to be resolved when first raised in this case."

In the end, Renteria's $350,000 settlement included back pay, interest and attorney's fees--but not disability pay. The state legislature agreed to pay $273,000; the rest was absorbed by the Labor Department.

While Renteria was busy breaking the bank, other Coloradans were coming to his division for aid and getting nowhere. Joe Kennedy lost his job as an engineering technician several years ago and filed a claim against his former employers, charging that they owed him back wages and had not paid. He waited three months before he was told by an LSU compliance officer to pursue the matter in court. Eventually, Kennedy found a lawyer, pursued his claim in court and won a settlement several months later.

"Trying to make the system work was defeatist," Kennedy says. "Trying to get into the system, follow it step by step, was fruitless. I wish they could tell me up front, 'We can't do anything. We're just doing this to get paid.' Maybe they're as frustrated as I am, but they don't make us aware of that."

Stronger labor departments in other states--such as Utah, Wyoming, California and Montana--can make legally binding decisions and often represent claimants in court; in Colorado, the LSU can do neither. Colorado's average wage collected per claim is lower than the amounts collected in Montana, Utah or California.

"We don't tell anybody that there's no more we can do," says Colleen Strasburg, acting supervisor of the Industrial Commission of Utah's labor division. "We don't just arbitrarily pull out because a suit is too gray."

Some Coloradans say that is exactly what happens here. Tom Snedden made $45,000 as a finance vice-president at the same company Moe Zenati worked for, Mainstreet Homes, until Snedden lost his job in March 1995. He says he was due vacation pay and thirty days of severance pay. He filed a claim with the LSU but says nothing came of it.

"They agreed my claim was valid," Snedden says, "but they said they didn't have the legal resources to get into that. My comment was, what are they there for if they're just going to write two letters?"

Snedden couldn't afford to pursue his claim in court, and it took him half a year to find a new job, as a sales manager for a construction company in Iowa. "I feel I'm an educated individual," he says, "and if I don't have a chance, then what about the poor?"

Even Colorado officials say Snedden has a point. "I think they're up a creek," Donlon says when asked the same question. "I think they're at kind of a loss." The LSU doesn't keep statistics on the number of claimants who actually pursue their complaints in court, but Donlon says he "doubts seriously" that there are very many of them.  

Zenati is one. Hired as a computer programmer on contract by Mainstreet Homes in January 1994, Zenati claims he became an employee of the company by October of the same year and wants $100,000 in wages and overtime for hours worked between that time and April 1995, when he was fired. The company paid him $5,000 upon his termination but contends he was always an independent contractor, never an employee.

Mainstreet argued that Zenati had never filled out an employee agreement or a W-4 form and that he had submitted invoices to them, an action typical for a contractor but not an employee. On June 23 of last year, the LSU rendered its determination: "It appears there will be no resolution of your claim through this office."

Zenati compiled affidavits of colleagues who believed he was an employee, and when that didn't accomplish anything, he sought Renteria's help. (In the meantime, Zenati learned of Renteria's own labor dispute.)

He and Renteria give different accounts of what transpired during their few conversations. "I thought we were having a good dialogue," Renteria says, "and all of a sudden he got an opinion that I wasn't being fair. So he asked me to pull out, so I did. He did the right thing: He filed a lawsuit."

"If he's saying we had a good dialogue from the very beginning, that's a fabrication," Zenati says. "I pointed out to him that I felt he should have been more sensitive to due process, having gone through the same thing.


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