Department of Labor investigation, litigation recovers $11.4M in back wages, damages for more than 1K employees of East Coast restaurant chain
WASHINGTON – The U.S. Department of Labor has recovered $11.4 million in back wages and liquidated damages for more than 1,000 employees of an East Coast restaurant chain after a series of investigations and litigation by the department.
The recovery is related to a consent judgment entered by the U.S. District Court for the Eastern District of Virginia in Norfolk that resolves litigation by the department’s Office of the Solicitor related to pay practices at more than 40 Plaza Azteca Mexican restaurant locations owned by Ruben Leon in seven states. After an investigation by the department’s Wage and Hour Division, the department filed a complaint alleging Leon and the restaurants violated overtime and minimum wage provisions of the Fair Labor Standards Act.
The employers agreed to the consent judgment after months of litigation and just before a jury trial was scheduled to begin. The lawsuit included Plaza Azteca locations in Connecticut, Maryland, Massachusetts, New Jersey, North Carolina, Pennsylvania and Virginia.
“Our investigators found Plaza Azteca knew of its legal obligations to pay workers minimum wage and overtime and keep accurate payroll records and yet, willfully disregarded federal law,” said Wage and Hour Administrator Jessica Looman. “The employers failed to pay full wages to more than 1,000 employees. The court’s action in this case is an important step in our efforts to make a meaningful difference in the lives of these workers by recovering their hard-earned wages.”
Specifically, the department alleged that numerous Plaza Azteca Mexican restaurants paid back-of-the-house employees predetermined amounts. By doing so, the employers failed to pay some employees who worked up to 40 hours in a workweek the required minimum wage and did not pay some employees time-and-a-half for hours over 40 in a workweek. The employers also failed to maintain accurate records of employees’ work hours and wages, as required.
Due to the repeat and willful nature of the violations, the consent judgment also recovered $625,000 in civil money penalties from the employers.
“This outcome sends a strong message to other restaurant industry employers of the costly consequences that can occur when they deprive employees of their full and rightful wages,” said Solicitor of Labor Seema Nanda. “As we did in this case, the U.S. Department of Labor will strategically deploy our investigative and litigation resources to remedy systemic violations of the law at a national scale across an enterprise’s locations.”
In addition to the back wages and penalties, the consent judgment forbids the employers from violating the FLSA in the future and requires them to retain a qualified independent consultant to make certain the employers’ payroll and recordkeeping practices comply with the FLSA.
The back wages and liquidated damages are due to certain current and former employees of Plaza Azteca restaurants regardless of their immigration status. As some of the workers affected by this case may have relocated, the Wage and Hour Division encourages former or current affected employees to contact the division at 215-861-5180 with any questions.
The Wage and Hour Division district offices in Boston, Pittsburgh and Wilkes-Barre, Pennsylvania, and Richmond, Virginia, conducted the investigations. The Boston and Philadelphia Regional Solicitor’s offices litigated the case.
For more information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). The department can speak with callers confidentially in more than 200 languages, regardless of their immigration status. Download the agency’s new Timesheet App for Android and iOS devices – free and now available in English and Spanish – to ensure hours and pay are accurate.