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Perez v. New Discovery Residential Services, Inc.

United States District Court, Ninth Circuit

January 10, 2014

THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor, Plaintiff,
v.
NEW DISCOVERY RESIDENTIAL SERVICES, INC. a California corporation doing business as NEW DISCOVERY RESIDENTIAL SERVICES; GEORGE CLARDY, an individual and managing agent of the corporate defendant, Defendants.

JANET M. HEROLD, Regional Solicitor, DANIEL J. CHASEK, Associate Regional Solicitor, NIAMH E. DOHERTY, Trial Attorney (CSBN #260749), Office of the Solicitor (SOL#1400021) United States Department of Labor Los Angeles, California, Attorneys for the Plaintiff.

GEORGE CLARDY, Attorney for Defendants.

Geoffrey H. Hopper For the Plaintiff, M. PATRICA SMITH Solicitor of Labor

JANET M. HEROLD, Regional Solicitor,

DANIEL J. CHASEK Associate Regional Solicitor,

NIAMH E. DOHERTY, Trial Attorney, Attorney for the Plaintiff, Secretary of Labor, U.S. Department of Labor.

(PROPOSED) CONSENT JUDGMENT

R. GARY KLAUSNER, District Judge.

Plaintiff THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor ("Plaintiff" or "Secretary") and defendants New Discovery Residential Services, Inc., a California corporation doing business as New Discovery Residential Services ("Corporate Defendant"), George Clardy, an individual and managing agent of the Corporate Defendant (hereafter collectively referred to as the "Defendants") (the Secretary and Defendants hereafter collectively referred to as the "Parties") have agreed to resolve the matters in controversy in this civil action and consent to the entry of this Consent Judgment in accordance herewith:

A. The Secretary has filed a Complaint alleging that Defendants violated provisions of Sections 6, 7, 11(c), 15(a)(2) and 15(a)(5) of the Fair Labor Standards Act of 1938, as amended ("FLSA"), 29 U.S.C. §§ 206, 207, 211(c), 215(a)(2) and 215(a)(5).

B. The Defendants are represented by counsel and acknowledge receipt of a copy of the Secretary's Complaint.

C. The Defendants waive issuance and service of process. In lieu of answering the Complaint and asserting any defenses thereto, the Defendants have agreed to the terms of this Consent Judgment.

D. The Secretary and Defendants waive Findings of Fact and Conclusions of Law.

E. The 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.

F. The Parties agree to the entry of this Consent Judgment in settlement of this action, without contest.

G. Defendants acknowledge that Defendants and any individual or entity acting on their behalf or at their direction (including but not limited to supervisors and/or managers at Defendants' residential care facilities) have notice of, and understand, the provisions of this Consent Judgment.

H. Defendants admit to violating Section 6 and 15(a)(2) of the FLSA during the period of February 8, 2010 through February 7, 2013 ("Subject Period") by paying employees who were engaged in commerce or the production of goods for commerce, within the meaning of the FLSA, or were employed in an enterprise engaged in commerce or in the production of goods for commerce, within the meaning of FLSA § 3(s), wages at a rate less than $7.25 per hour (or at a rate less than such other applicable minimum rate as may hereafter be established by amendment to the FLSA).

I. Defendants admit to violating Sections 7 and 15(a)(2) of the FLSA during the Subject Period by employing employees who were engaged in commerce or the production of goods for commerce, or who were employed in an enterprise engaged in commerce or in the production of goods for commerce within the meaning of the FLSA, for workweeks longer than forty (40) hours, and by failing to pay such employees compensation for their employment in excess of forty (40) hours at a rate not less than one and one-half times the regular rate at which they were employed.

J. Defendants admit to violating Sections 11(c) and 15(a)(5) of the FLSA during the Subject Period by failing to make, keep and preserve records of their employees and of the wages, hours, and other conditions and practices of employment maintained by them as prescribed by the regulations found in 29 C.F.R. Part 516 that are issued, and from time to time amended, pursuant to Section 11(c) of the FLSA.

K. Defendants understand and agree that demanding or accepting any of the funds due employees under this Judgment or threatening any employee for accepting money due under this Judgment or for exercising any of their rights under the FLSA is specifically prohibited by this Judgment and may subject the Defendants to equitable and legal damages, including punitive damages and civil contempt.

Therefore, upon motion of the attorneys for the Secretary, and for cause shown,

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Defendants, their officers, managing agents, and employees and those persons in active concert or participation with them who receive actual notice of this order (by personal service or otherwise) be, and hereby are, permanently enjoined and restrained from violating the provisions of the FLSA, 29 U.S.C. §§ 201, et seq., in any of the following manners:

1. Defendants shall not, contrary to Sections 6 and 15(a)(2) of the FLSA, 29 U.S.C. §§ 206 and 215(a)(2), pay any employee who in any workweek is engaged in commerce, within the meaning of the FLSA, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, within the meaning of the FLSA, wages at a rate less than $7.25 per hour (or at a rate less than such other applicable minimum rate as may hereafter be established by amendment to the FLSA).

2. Defendants shall not, contrary to Sections 7 and 15(a)(2) of the FLSA, 29 U.S.C. §§ 207 and 215(a)(2), employ any employee who in any workweek is engaged in commerce, within the meaning of the FLSA, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, within the meaning of the FLSA, for any workweek longer than forty 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.

3. Defendants shall not fail to make, keep, preserve, and make available to authorized agents of the Secretary for inspection, transcription, and/or copying, upon their demand for such access, records of their employees and of the wages, hours, and other conditions and practices of employment maintained by them, as prescribed by the regulations issued, and/or amended, pursuant to Sections 11(c) and 15(a)(5) of the FLSA, 29 U.S.C. §§ 211(c) and 215(a)(5), and the implementing regulations found in Title 29, Code of Federal Regulations, Part 516.

4. Defendants, jointly and severally, shall not withhold payment of $299, 045.81, in gross unpaid back wages and overtime pay, plus an additional $1, 497.29 in interest, for a total of $300, 543.10, hereby found to be due under the FLSA to 17 employees, as a result of their employment by Defendants during the Subject Period, as set forth in the attached Exhibit A, showing the name of each employee and listing on the same line the gross back wage amount due the employee and the period covered by the Consent Judgment.

5. To accomplish the parties' agreement as specified in Paragraph 4:

a. On or before August 31, 2013, and continuing on the last day of each month thereafter until July 2014, Defendants shall repay back wages, overtime pay and interest to each person named in Exhibit A. Defendants shall repay such back wages, overtime pay and interest according to the monthly installment schedule provided in the attached Exhibit B. Defendants shall deliver separate checks or money orders to each person named in the attached Exhibit A, and such checks shall be made payable to the order of the particular person and shall be in amounts listed in the installment amortization schedule provided in the attached Exhibit C. Each repayment amount will be paid to the particular person after the employer has made legal deductions (which deductions shall be submitted by Defendants to the federal and state agencies entitled to them, when due and no later than one year after submitting to the Secretary the last payment due hereunder) from the total gross amounts provided in the last column by his or her name in the attached Exhibits A and C.

b. On or before the last day of each month, until July 2014, Defendants shall deliver to the Secretary's representative, Wage and Hour Division, United States Department of Labor ("U.S. Wage and Hour Division"), located at 100 N. Barranca Street, Suite 850, West Covina, CA 91791, evidence of payment to each person named in the attached Exhibit A of the amounts set forth in Paragraph 5, subpart (a), and pursuant to the schedule in Exhibit C. Such evidence of payment shall include any and all signed U.S. Wage and Hour Division Receipt for Payment of Back Wages, Employment Benefits, or Other Compensation Form WH-58 receipt forms the Defendants have received at that time.

c. On or before September 28, 2014, Defendants shall provide U.S. Wage & Hour Division with a listing of all unlocated employees, their last known address, social security number (if possible), and their gross and net amounts due and any and all remaining signed Form WH-58 receipt forms not yet provided to U.S. Wage and Hour Division, or a cancelled check (or some reasonable facsimile) for every person listed on Exhibit A that the Defendants have paid per the terms of this Consent Judgment, and shall deliver to U.S. Wage and Hour Division a cashier's or certified check, payable to "Wage and Hour Division - U.S. Dept. of Labor" to cover the total gross and net amounts due all such employees.

6. In the event of a default in the timely making of any of the payments specified herein, the entire unpaid balance due under this Consent Judgment, plus post-judgment interest at the rate of one percent (1%) per year from the date of this Consent Judgment until the amount of this Consent Judgment is paid in full, shall become immediately due and payable directly to the U.S. Department of Labor by certified check to the Wage and Hour Division upon the Secretary's sending by ordinary mail a written demand to the last business address of the Defendants then known to the Secretary. A penalty at the rate of six percent (6%) per year will be assessed on any portion of the debt remaining delinquent for more than 90 days.

IT IS FURTHER ORDERED that in the event that any employees cannot be located, or refuse to accept the back wages, the Secretary shall allocate and distribute the remittances received from the employer for such employees, to the persons named in the attached Exhibit A, or to their estates if that be necessary, and any money not so paid within a period of three years from the date of its receipt, because of an inability to locate the proper persons or because of their refusal to accept it, shall be deposited in the United States Treasury, pursuant to 29 U.S.C. § 216(c).

7. Defendants shall maintain their payroll practices to comply with the FLSA. To accomplish the provisions of this paragraph:

a. Defendants shall record all hours worked by employees in the payroll records.

b. Defendants shall maintain all required records of time worked and payroll records for a period of ...


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