Opinion
2:23-cv-10306-HDV-E
05-06-2024
JULIE A. SU, ACTING SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff, v. GOOD CASH, LLC, a limited liability company; GOOD CASH, a corporation; PREMIUM QUALITY APPAREL, LLC, a limited liability company; PREMIUM QUALITY APPAREL, a corporation; RAMON NONATO TECUM CHIGUIL, an individual; MARISELA ROMERO, an individual, aka DIANNA TECUM, aka DIANA TECUM, aka DIANA ROMERO, aka DIANNA ROMERO; JOSEPH DELAO, an individual; Defendants.
For the Plaintiff: MARC A. PILOTIN Regional Solicitor BORIS ORLOV Counsel for Wage and Hour KATHRYN A. PANACCIONE Trial Attorney
For the Plaintiff:
MARC A. PILOTIN
Regional Solicitor
BORIS ORLOV
Counsel for Wage and Hour
KATHRYN A. PANACCIONE
Trial Attorney
[PROPOSED] CONSENT JUDGMENT AND ORDER
HONORABLE HERNAN D. VERA, UNITED STATES DISTRICT JUDGE. Plaintiff Julie A. Su, Acting Secretary of Labor, United States Department of Labor (“Acting Secretary”), and Defendants Good Cash, LLC; Good Cash, Inc., dba Good Cash; Premium Quality Apparel, LLC; Premium Quality Apparel, dba Premium Quality Apparel, Inc.; Ramon Nonato Tecum Chiguil, Marisela Romero, aka Dianna Tecum, aka Diana Tecum, aka Diana Romero, aka Dianna Romero (“Romero”) and Joseph Delao (collectively, “Defendants”), have agreed to resolve the matters in controversy in this civil action and consent to the entry of this Consent Judgment in accordance herewith.
STATEMENTS AND AGREEMENTS BY THE PARTIES
A. The Acting Secretary filed a Complaint in the above-captioned proceeding naming Defendants and alleging they violated provisions of sections 7, 11(c), 15(a)(1), 15(a)(2), 15(a)(3) and 15(a)(5) of the Fair Labor Standards Act of 1938, as amended (“FLSA”), 29 U.S.C. §§ 207, 211(c), 215(a)(1), 215(a)(2), 215(a)(3) and 215(a)(5).
B. Defendants have retained defense counsel and acknowledge receipt of a copy of the Acting Secretary's Complaint in this action.
C. Defendants waive issuance and service of process of the Summons and Complaint and waive their response to the Acting Secretary's Complaint.
D. Defendants admit that the Court has jurisdiction over the parties and subject matter of this civil action and that venue lies in the Central District of California.
E. Defendants admit they failed to pay their employees overtime for all hours in excess of 40 hours worked in a workweek and failed to accurately record employees' hours and pay, in violation of Sections 7 and 11 of the FLSA. Specifically, Defendants' workers regularly worked around 52 hours per week but were paid for only between 40 and 49 hours per week. Further, Defendants did not pay the workers an overtime premium for hours worked in excess of 40 in a workweek.
F. The parties agree to waive findings of fact and conclusions of law and agree to the entry of this Consent Judgment without further contest.
G. Defendants agree herein to resolve all allegations of the Acting Secretary's Complaint.
H. The following Defendants are garment contractors: Premium Quality Apparel, dba Premium Quality Apparel, Inc; Premium Quality Apparel, LLC; Good Cash, LLC; Good Cash, Inc., dba Good Cash.
I. Defendant Ramon Tecum is the sole owner of Good Cash, LLC. Defendant Joseph Delao was the sole owner of Premium Quality Apparel, Inc. (“PQA Inc.”) through September 2023. Defendant Marisela Romero operates and manages all six corporate Defendants, and is primarily responsible for the daily operation of each. Defendants Tecum, Delao and Romero are employers in relation to the employees listed on Exhibit A.
J. In October 2023, Defendants' attorney Joshua Mizrahi indicated that he would consider acquiring ownership rights to PQA Inc. If attorney Mizrahi does become an owner of PQA Inc. or any of the other garment contractor Defendants, attorney Mizrahi agrees to be bound by the terms of this Consent Judgment, and agrees that Defendants will in the future operate in full compliance with the FLSA.
K. At all relevant times, Defendants' employees were engaged in commerce and/or handling and working on goods that have been moved in commerce, as they regularly handle goods that had or have been shipped from places outside the state of California. Defendants' enterprise has and at all relevant times has had an annual gross volume of sales made or business done of no less than $500,000.00, and said enterprise constitutes and at all relevant times has constituted, an “enterprise engaged in commerce or in the production of goods for commerce” as defined by FLSA 3(s), 29 U.S.C. § 203(s). As such, Defendants' employees are covered by the FLSA. Defendants admit they are employers covered and subject to the FLSA.
K. Following an investigation, on or about August 31, 2023, Wage and Hour investigators notified Defendants that garments made by Defendants for I Am Beyond, LLC (“I Am Beyond”), located at 11248 Playa Court, Suite A, Culver City, CA 90230, are goods made in violation of Sections 7 and 11 of the FLSA and that the Acting Secretary objected to shipment of the goods made into interstate commerce. On or about September 5, 2023, I Am Beyond agreed to refrain from shipping or selling these goods. On or about October 17, 2023, I Am Beyond paid $1,164,635.80Jo the Department of Labor, which represents the back wages and liquidated damages owed to Defendants' workers for Defendants' violations of sections 7, 11(c), 15(a)(1), 15(a)(2), 15(a)(3) and 15(a)(5) of the FLSA, 29 U.S.C. §§ 207, 211(c), 215(a)(1), 215(a)(2), 215(a)(3) and 215(a)(5). The Acting Secretary is allocating and distributing those funds to Defendants' workers. In exchange for I Am Beyond's payment, the Acting Secretary lifted her objection to I Am Beyond shipping or selling the goods in interstate commerce.
PERMANENT INJUNCTION
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 17 of the FLSA, 29 U.S.C. § 217, Defendants, their officers, agents, servants, employees, successor companies, parties in interest, and all persons and entities acting at their direction or in concert or participation with them, are permanently enjoined and restrained from violating the FLSA, including through any of the following manners:
1. Defendants shall not, contrary to FLSA § 7, 29 U.S.C. § 207, employ any employee who in any workweek is engaged in commerce, within the meaning of FLSA § 3(s), or is employed in an enterprise engaged in commerce or in the production of goods for commerce, within the meaning of FLSA § 3(s), for any workweek longer than 40 hours unless such employee receives compensation for his or her employment in excess of 40 hours in such workweek at a rate not less than one and one-half times the regular rate at which he or she is employed.
2. Defendants shall not, contrary to FLSA § 15(a)(1), 29 U.S.C. § 215(a)(1), transport, offer for transportation, ship, deliver, or sell in commerce (or ship, deliver, or sell with knowledge or reason to believe that shipment, delivery, or sale in commerce is intended) goods in the production of which any employee (of Defendants or other(s)) has been employed in violation of the FLSA's minimum wage (29 U.S.C. § 206) or overtime pay provisions (29 U.S.C. § 207).
3. Defendants shall not contrary to Section 15(a)(3) of the FLSA, discharge; threaten to discharge, lay off, reduce the work schedule or wages, intimidate; or in any other manner discriminate against any employee as a result of this litigation or because such employee has filed any complaint under or related to the FLSA or has spoken or provided information to the Acting Secretary's representatives or participated in or received a distribution from the proceeds of this action.
4. Defendants shall not fail to make, keep, make available to authorized agents of the Acting Secretary for inspection, transcription, and/or copying, upon their demand for such access, and preserve records of employees and of the wages, hours, and other conditions and practices of employment maintained, as prescribed by regulations issued, and from time to time amended, pursuant to FLSA §§ 11(c) and 15(a)(5), 29 U.S.C. §§ 211(c) and 215(a)(5) and the implementing regulations found in Title 29, Code of Federal Regulations, Part 516.
5. Defendants shall comply with the FLSA, and if not already in effect at the time of entry of this Consent Judgment, shall amend and maintain their payroll practices as follows:
a. Defendants shall pay all employees on an hourly basis.
b. Defendants shall accurately record the information required by 29 C.F.R. § 516.2 in the payroll records, including (1) all hours worked
by employees each workday and workweek; (2) the rate(s) of pay for each of the hours worked during the workweek; (3) the basis of pay, including identifying whether workers are paid per piece; (4) the total weekly straight-time earnings for the hours worked during the workweek;
(5) the total premium pay for overtime hours.
c. Defendants' electronic timekeeping system shall permit employees (as opposed to supervisors) to track their individual work hours daily. The electronic timekeeping system shall be used to calculate hours worked for payroll purposes. If changes in the time records later are required, Defendants shall designate and authorize one or more individuals to correct time entry errors, and the employee must sign off on the change.
d. Defendants shall pay all employee wages for each pay period with one check and not break wages up into multiple checks or payments from multiple entities.
e. Defendants shall maintain all time and payroll records, including any records of cash payments to employees, for a period of not less than three years.
f. Defendants shall record all wages paid to employees, regardless of the manner of payment, on their payroll records, and any expense reimbursements may be recorded in Defendants' accounting system.
g. Defendants shall provide employees with a paystub that accompanies their pay, on each payday, that reflects the employee's amount of pay, rate of pay, hours worked, and any and all deductions.
h. Defendants shall inform all supervisors, managers, and persons performing payroll duties of the requirements of this Consent Judgment and shall provide a copy of this Consent Judgment to all supervisors, managers, and persons performing payroll duties.
i. Defendants shall not alter or manipulate time or payroll records to reduce the number of hours actually worked by an employee, and Defendants shall not encourage workers to under-report their hours worked.
j. Defendants shall not direct supervisors, managers or persons performing payroll duties to falsify time or payroll records in any manner including reducing the number of hours worked by employees, and Defendants shall direct their supervisors, managers, and persons performing payroll duties to encourage workers to report all hours worked.
6. Defendants, their officers, agents, servants, and employees and those persons in active concert or participation with them, shall not in any way directly or indirectly, demand, require or accept any of the back wages or liquidated damages from any of the employees listed on the attached Exhibit A. Defendants shall not threaten or imply that adverse action will be taken against any employee because of their receipt of funds due under this Consent Judgment. Violation of this Paragraph may subject the Defendants to equitable and legal damages, including punitive damages and civil contempt.
7. Defendants, their officers, agents, servants, and employees and those persons in active concert or participation with them, shall not in any way retaliate or take any adverse employment action, or threaten or imply that adverse action will be taken against any employee who exercises or asserts his or her rights under the FLSA or provides information to any public agency investigating compliance with the FLSA. Violation of this Paragraph may subject the Defendants to equitable and legal damages, including punitive damages and civil contempt.
8. Defendants shall provide all persons or entities for which they produce goods with a copy of this Consent Judgment.
9. For seven years from the Court's entry of this Consent Judgment, the individual Defendants shall on a quarterly basis report the name of their employer or business they operate and all sources of income in excess of $500 monthly to Wage and Hour Division Director of Enforcement Michael Eastwood (eastwood.michael@dol.gov) or his successor or designee, and Wage and Hour Division District Director for the Los Angeles District Office Kimchi Bui (bui.kimchi@dol.gov) or her successor or designee. Along with this report, the individual Defendants shall also identify any relationship to any garment contractor and/or garment manufacturer, whether as owner, employee or consultant. Defendants shall also report their work address and personal residence addresses. Further, Defendants shall advise the Wage and Hour Division within 30 days of any change in corporate status or name change, change in their employer, or change in the business they operate.
10. Defendants shall, within thirty (30) business days after entry of this Consent Judgment and Order by the Court, hold meetings with all employees of all Defendants, at time(s) and date(s) agreeable to the Wage and Hour Division, at which representatives of Wage and Hour Division will be invited and can be present, either in person or virtually at their choice. At the all-employee meeting(s), Defendants Marisela Romero and Ramon Tecum must be present. Wage and Hour Division personnel will tell all employees that 1) employees will be paid hourly; 2) hourly employees will receive hourly pay for all hours worked up to forty in a workweek; and 3) hourly employees will receive time and a half of their actual hourly rate for hours worked over forty in a workweek. They will explain that this meeting is required by the Court because of the Consent Judgment. They will also tell employees various things about their rights under the FLSA, including that they have the right to talk to Wage and Hour Division for any reason including if they believe they are not being paid properly, and that Defendants will take no action to deter them or retaliate if they do so. They will also tell employees that Defendants are required to keep proper time records of hours worked, and Defendants will provide employees with paystubs when employees receive their pay. They will also notify the workers of DOL's contact information and that they can call the DOL about any wage problems or retaliation and their information will remain confidential. Defendants will have enough copies for all employees of Exhibit B to distribute at this meeting(s).
11. Defendants shall, within thirty (30) days of signing this Consent Judgment, shall engage, at their own expense, an independent third-party monitor, not connected with their businesses, for the purposes of conducting two annual FLSA compliance audits. The monitor shall not be considered independent if it represents either the manufacturer or contractor involved in this action in any dealings with other parties or the Department of Labor.
a. The audits shall contain, at a minimum, notes from employee interviews, the name, address, phone number of each employee and whether the employee is classified as FLSA exempt, FLSA non-exempt, if the employee receives a daily rate, if the employee is paid in cash or by check, the start and end times of each employee's work day for every work day during the period covered by the third-party audit, the regular rate of pay for each employee, the gross weekly straight time and overtime wages owed to each employee for each pay period covered by the third-party audit based on the employee's hours worked and regular rate of pay; and the gross weekly straight time and overtime wages actually paid to each employee for each pay period covered by the third party audit;
b. The independent third-party monitor shall request and conduct interviews with Defendants' employees as part of the audit process. Such interviews and other communications between workers and the monitor may be kept confidential (except to authorized representatives of the U.S. Department of Labor) at the option of each worker and copies of all notes and interviews conducted by the monitor may be turned over by the monitor to the District Director, Los Angeles office, U.S. Department of Labor, along with the audit report, if requested by the District Director, Los Angeles office, U.S. Department of Labor.
c. Before the third-party monitor begins work (and no later than 30 days from the date of this Judgment), Defendants shall provide the identity and curriculum vitae of said proposed third-party monitor to the District Director of the Wage and Hour Division's Los Angeles office. The District Director shall have the right to reject the selected monitor within 10 days and direct that a different monitor be proposed. If the third-party monitor is not rejected by the District Director within this 10-day period, Defendants' proposed third-party monitor will be deemed to be approved by the District Director. If a proposed third-party monitor is rejected by the District Director, Defendants shall propose a new third-party monitor within 15 days of the rejection. If the District Director rejects three monitors proposed by the Defendants, the Acting Secretary may file a motion within 15 days of the third proposed third-party monitor being rejected asking the Court to select the third-party monitor (in any such motion the Acting Secretary must propose a third-party monitor). If no motion is made within this period, the Acting Secretary will be deemed to have waived the third-party monitor requirement. Once a third-party monitor is approved by the District Director, such monitor does not have to be re-approved before each audit, instead only a change in the third-party monitor (after initial approval) would require new District Director approval.
d. The third-party monitor shall have the ability to communicate with Defendants' employees in their native language(s), or, shall be provided with an interpreter as necessary at Defendants' expense.
e. Defendants shall cooperate in full with the third-party monitor, including providing the monitor access to the worksite(s) of the employees and to payroll and time records.
f. If the third-party monitor finds violations of the FLSA, or regulations issued under the FLSA, that result in back wages due, Defendants shall pay the wages due within 30 days and shall provide a copy of the written report to the District Director of the Wage and Hour Division's Los Angeles office.
g. If the third-party monitor directs changes in Defendants' policies and/or procedures, or directs that the Defendants take action to comply with the FLSA or regulations issued under the FLSA, the Defendants shall do so.
JUDGMENT AND ORDER
FURTHER, JUDGMENT IS HEREBY ENTERED, pursuant to Sections 16(c) and 16(e) of the FLSA, 29 U.S.C. § 216(c) and (e), in favor of the Secretary and against Defendants, jointly and severally, in the amount of $200,000. Pursuant to this Judgment, IT IS HEREBY ORDERED THAT
12. Defendants shall pay $200,000 as a civil money assessment under 29 U.S.C. § 216(e).
13. Defendants will comply with paragraph 12 of this judgment by making payments as described in Exhibit D. Defendants may pay without penalty all or a portion of the amount owed earlier than the applicable payment date indicated in Exhibit D.
14. Defendants shall make the payments required by this Consent Judgment (plus interest as applicable) by going to https://pay.gov/public/form/start/77743734 or by going to www.pay.gov and searching “WHD Civil Money Penalty Payment Form - Western Region.” If unable to pay online, submit payment by certified check or money order made out to “Wage and Hour Division, U.S. Department of Labor” delivered or mailed to Western Regional Office, U.S. Dept. of Labor, Wage and Hour Div., 90 7th Street, Suite 4-390, San Francisco, CA 94103-6710.
15. Within 30 days of entry of this Consent Judgment, Defendants shall deliver a schedule containing the full name of each employee listed on the attached Exhibit A, the employee's current address or last known address, home phone number, cell phone number, and other known contact information of the employee.
16. In the event of any default in the timely making of any payment due hereunder in excess of five business days, the full amount due which then remains unpaid, plus post-judgment interest at the rate of 10% per year, from the date of this Judgment until paid in full, shall become due and payable upon the Acting Secretary's sending by ordinary mail a written demand to the last business addresses of Defendants then known to the Acting Secretary with electronic copies also concurrently e-served on Defendants' counsel of record.
17. In the event of any default in the timely making of any payment due hereunder in excess of five business days, then Defendants consent to entry of a writ of execution pursuant to Rule 69 of the Federal Rules of Civil Procedure, to enforce this Consent Judgment's monetary terms. Such a writ of execution shall be limited to the pending balance of the Defendants' monetary obligations under this Consent Judgment, including any post-judgment interest, at the time such writ is issued. The Acting Secretary may represent in filing for such a writ that Defendants consent to its issuance. Upon request from the Acting Secretary, Defendants agree to furnish a complete and accurate list of their real, personal, and business property and other assets, including bank accounts with account numbers, that have an estimated value of $2,000.00 or more and the locations of such property for purposes of the Acting Secretary seeking a Writ of Execution in accordance with this paragraph of the Consent Judgment.
18. Within thirty (30) days of the entry of this Judgment, Defendants shall supply all of its employees with copies of the attached Exhibits B and C. In addition, Defendants shall provide copies of Exhibits B and C to all new hires and post a copy at work location where it is visible to employees.
19. Defendants agree and acknowledge that any successors or purchasers of the corporate Defendants will be bound in full to the terms of this Consent Judgment. ORDERED that the filing, pursuit, and/or resolution of this proceeding with the entry of this Judgment shall not act as or be asserted as a bar to any action or claim under FLSA § 16(b), 29 U.S.C. § 216(b), as to any employee not named on the attached Exhibit A, nor as to any employee named on the attached Exhibit A for any period not specified therein, nor as to any employer other than Defendants.
ORDERED that each party shall bear their own fees, costs, and other expenses incurred by such party in connection with any stage of this proceeding, including but not limited to attorneys' fees, which may be available under the Equal Access to Justice Act, as amended, to the date of entry of the Judgment herein; and, it is further
ORDERED that this Court retains jurisdiction of this action for purposes of enforcing compliance with the terms of this Consent Judgment.
For Defendants:
The Defendants appear and hereby consent to the entry of this Judgment and waive notice by the Clerk of Court.
Good Cash, LLC
Good Cash Inc., dba Good Cash
Premium Quality Apparel, LLC
Premium Quality Apparel, dba Premium Quality Apparel, Inc.