Follow us on LinkedIn to see future News.
January 17, 2024
The U.S. Department of Labor (“DOL”) recently announced a recovery of more than $1 million in back wages and damages for 165 California garment workers whose contractors[1] denied them overtime wages and then tried to conceal the misconduct.
The DOL investigation revealed that the sewing contractors violated the Fair Labor Standards Act by failing to pay overtime for hours over 40 in a workweek to employees who worked an average of 52 hours per week. The contractors then falsified payroll records and issued fake checks to mask their violations. In the face of an inspection warrant, several of the owners pretended to be workers, shut off power to the facility, and ordered employees to leave the worksite.
The DOL enforced a “hot goods” hold[2] on the apparel produced by the contractors’ employees for I Am Beyond LLC, d/b/a the Beyond Yoga apparel brand. When informed of its contractors’ violations, Beyond Yoga agreed to pay $582,317 in back wages and another $582,317 in damages. Beyond Yoga also entered into a compliance agreement with the DOL in which it agreed to update its code of conduct for garment contractors. The compliance agreement/code requires full compliance with the Fair Labor Standards Act, a program to monitor compliance, and directs all contractors to display information for workers on how to file complaints of potential labor violations confidentially, including through Beyond Yoga’s worker hotline.[3]
To avoid potential liability, employers must ensure compliance with the Fair Labor Standards Act (and its state counterparts) in their own company and must monitor their supply chains to make sure that the goods that they purchase are being made in compliance with the law. When issues arise, seek legal counsel and cooperate with investigators. And, by all means, don’t try to “fabric”-ate evidence; it’ll all come “unraveled.”
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in California, Pennsylvania, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
[1] The investigation identified four Los Angeles sewing contractors in violation: Good Cash LLC and its associated entities, Good Cash Inc., Premium Quality Apparel LLC, and Premium Quality Apparel Inc. Good Cash and Premium Quality Apparel are owned by Ramon Tecum; Marisela Romero a/k/a Diana Tecum; and Joseph Delao. The investigation also revealed that former California Deputy Labor Commissioner Conrado Gomez played a significant role in the businesses.
[2] Federal law prevents interstate shipment of “hot goods” produced in violation of minimum wage, overtime, or child labor regulations and applies to the employer and anyone in possession of the goods.
[3] The Office of the Solicitor obtained a consent judgment in the U.S. District Court for the Central District of California against the Good Cash and Premium Apparel entities and its owners requiring them to pay $200,000 in civil money penalties for its Fair Labor Standards Act violations.
