Monday, August 24, 2015

“The devil made me do it” is not a defense to insidious wage-and-hour violations

Late last week, the Department of Labor announced that it had filed a wage-and-hour lawsuit against Akron, Ohio, televangelist Ernest Angley and the for-profit buffet his church operates. The allegations are, to put it mildly, ugly. From
  • Defendants improperly treated certain workers as “volunteers” and paid them no wages. These “volunteers” worked in the buffet restaurant cooking, cleaning, waiting on tables, stocking and maintaining the buffet line, and as cashiers.
  • Two dining-room attendants, aged 14 and 15, worked in violation of the restricted hours for minors.
  • Defendants paid four managers weekly salaries that were too low to meet the federal minimum wage, currently $7.25 per hour, and did not pay overtime after 40 hours. The employer incorrectly categorized these managers as exempt from minimum wage and overtime requirements of the Fair Labor Standards Act, though they did not meet the criteria. The managers are due a total of $8,684 in back wages for overtime violations.
  • Two hundred thirty-nine employees, including four of the managers, did not earn the minimum wage of $7.25 per hour and are due a total of $207,975 in back wages.
Most insidiously, according to an exposé done by the Akron Beacon Journal last October (which served as the genesis for the DOL’s investigation and its the eventual lawsuit), Angley (allegedly) willingly violated the FLSA through the use of unpaid volunteers even after a DOL audit told him otherwise, and, most sinfully of all, required the destruction of time records in an attempt to cover his tracks:
A window into Angley’s labor practices opened in early 1999 after a volunteer worker at the Cathedral Buffet was stabbed to death by another volunteer worker. 
Because the use of volunteers at a for-profit restaurant is prohibited, the U.S. Labor Department investigated. The church agreed that spring to stop the practice.
But the practice has resumed. 
Angelia Oborne, 35, has deep, firsthand knowledge of the finances at the buffet, where she was employed for 20 years. She started by busing tables at the restaurant and worked her way up to management. 
“Before we were audited,” she said, “I was instructed to destroy all the timecards and payroll reports for … other years before that.” 
Oborne also echoed what others have said about time-clock fudging. 
“They told every person … that they were required to clock out at 5 p.m. whether their work was done or not. And if their work was not done, they were to go back to their desk.”
The FLSA permits non-profit organizations to use volunteers to perform work related to the non-profit. If, however, the “volunteer” works in a part of the enterprise that serves a commercial business and serves the public (such as a restaurant or a retail store), those workers are employees, not volunteers, and are the employer is bound the FLSA to pay them minimum wage and overtime.

Seems to me that Angley’s best defense is to cut his losses, pay the $200,000+ in back wages, and start operating his buffet like the for-profit restaurant that it is. I’m very curious to see if common sense or hubris prevails.

And now, this…