Ignoring the FLSA: Another case of Stupid HR

Even pizza restaurants must comply with the FLSA.
Even pizza restaurants must comply with the FLSA.

Companies often make mistakes in complying with the Fair Labor Standards Act (FLSA) not intentionally, but by mistake. As my friend Jon Hyman has stated in the past “Most employers don’t make mistakes of commission, but rather mistakes of omission.” This is a great quote, and in my experience is generally correct. Occasionally, however, you find someone who appears to purposely ignore the law. When they do that they are engaging in STUPID HR!

The Alleged Wrong-doing

On September 30th, 2014 the Thomas Perez, Secretary of Labor, filed a complaint against a restaurant company in Atlanta based on an investigation conducted on July 9th at one of the restaurants included in the company. Based on the complaint filed the alleged wrong-doing consists of:

  • Working employees over 40 hours per week (60 hours) and not paying overtime;
  • Retaliation against employees
  • Threatening to report employees to immigration authorities
  • Intimidating employees
  • Terminating employees who were believed to have talked to investigators
  • Compelling employees to lie about hours worked to investigators
  • Encouraging employees to leave the premises when investigators were onsite in order to avoid being questioned

What the DOL says

According to the filed complaint the USDOL says:
In order to prove a violation of Section 215(a)(3) the Secretary must make a prima facie showing of (1) participation in protected activity under the FLSA; (2) an adverse employment action; and (3) a causal link between the activity and the adverse action…. If the Secretary meets this burden, the Defendants must then articulate a legitimate, non-discriminatory reason for their actions…The burden then shifts to the Secretary to demonstrate that the Defendants’ proffered reason is a pretext for discrimination. Here, the Secretary meets all three required elements to make his prima facie showing of retaliation and will further demonstrate that these unlawful acts of intimidation and threats will continue without relief from this Court.”
The USDOL feels they have a pretty strong case against the company and the owner, particularly in the retaliation claims.

What was stupid

Here the things that could be labeled as Stupid HR:

  1. Violating the FLSA to begin with. The law has been around since 1938 and in the last several of years the Department of Labor has made it very clear they are in a very active mode of tracking down companies they consider ‘wrong-doers’.
  2. Not paying overtime
  3. Retaliating against employees.
  4. Intimidating employees
  5. Threatening employees with deportation. This threat is most likely going to prompt an investigation by ICE (Immigrations and Customs Enforcement).
  6. Thinking you have more power than the Federal government.

I have a feeling this company is not going to fair well with this in this endeavor. Someone should have counseled this owner, but somehow I have a suspicion he would not have taken the advice.

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