Laura A. Lambert, et al. v. Barry Ackerly, et al.

Violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 215
(a)(3), and in violation of the public policy of the state of
Washington. Wash. Rev. Code § 49.46.100(2).

The plaintiffs in this action were six former ticket sales
agents of the Seattle SuperSonics, a National Basketball
Association team. As "account executives" for the Sonics, the
plaintiffs were responsible for selling season tickets, multigame
packages, and group-ticket packages. They also were responsible
for staffing a season ticket information booth at Sonics
basketball games. Beginning in 1991, the agents were paid a base
salary of $13,000, and received the remainder of their
compensation through commissions earned for their ticket sales.
Rather than paying overtime in accordance with the actual number
of hours worked by each employee, the Sonics paid each account
executive $2000 per year for "overtime." Under the Sonics' plan,
each employee was paid $166.67 per month regardless of the
overtime actually worked by the account executive.

In 1993, however, apparently because the Sonics had sold
almost all of their tickets, the account executives' workweek was
reduced to 20 hours, and the monthly "overtime" payments were
discontinued. In 1994, plaintiff Laura Lambert became concerned
that she and her fellow account executives had not been paid for
all of the overtime hours they had actually worked. Accordingly,
in May of 1994, she left a note with Sonics Controller Brian
Dixon requesting a meeting to discuss overtime wages. Lambert
also telephoned the United States Department of Labor and
requested information regarding federal overtime laws. After
speaking with the Labor Department, Lambert raised the issue of
unpaid overtime with the Sonics head of ticket sales, Bob
Boustead. Boustead told Lambert that the overtime question was a
"dead issue." According to Lambert's testimony, Boustead also
said"[i]f you want to sue the Sonics, go ahead and do us all a
favor."

On May 20, 1994, the Department of Labor informed Lambert
that the Sonics' overtime scheme did in fact violate the overtime
provisions of the Fair Labor Standards Act. Lambert told Dixon of
the Labor Department's conclusion and Dixon, according to
Lambert's testimony, told her that "his hands were tied" because
William Ackerley (Chief Operating Officer of Ackerley
Communications, Inc., the corporate parent of the defendant
corporations) "will not pay overtime and doesn't care what the
laws are." (SER 192-94). Dixon then told Lambert that if she
continued to press for her statutory right to overtime pay:

you will definitely not have a job here, you will be
fired. The decision is up to you. Everyone else in the
office will love you, but you are jeopardizing your
job. Is it worth it to you for a thousand dollars?

The Sonics eventually settled the overtime claims with
Lambert, and paid the other account executives the amounts due
them for overtime. Less than a week later, on October 12, 1994,
John Dresel, the Sonics Executive Vice President, wrote a memo to
William Ackerley informing him that he was planning to lay off
all of the account executives by November 30, 1994. In October of
1994, Full House Sports & Entertainment, Inc. was organized to,
among other things, run the Sonics ticket sales operations.
Dresel was named as President. In December 1994, Dresel
discharged nine of the ten account executives, including the six
plaintiffs here. The one sales agent not discharged was the one
agent who had never complained about the overtime violations.

Following a three-week trial, the jury returned a verdict for the plaintiffs on both the federal and state causes of action and awarded $697,000 for lost wages, and $75,000 to each plaintiff for emotional distress. The jury further awarded $12 million in punitive damages on the FLSA claim.

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The defendants moved for
judgment as a matter of law, or in the alternative for a new
trial and/or a remitittur of damages. The district court remitted
the punitive damages award to $4,182,000, but denied all other
defense motions. The district court also awarded the plaintiffs
$389,117.50 in attorneys' fees, and later awarded them an
additional $44,075 in supplemental fees in connection with the
post-trial motions.

The 9th Circuit Court of Appeals affirmed.

The U.S. Supreme Court on Tuesday refused to hear an appeal of a
decision that reinstated $7.4 million in damages, interest and attorney fees to six former
Seattle SuperSonics ticket-sellers who were fired for protesting loss of their overtime pay.
Note: The date shown above is the date of the United States Supreme Court decision and not the trial date.