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R. Alexander Acosta v. Ginger Green, Inc.

United States District Court, C.D. California, Western Division

November 6, 2019

R. ALEXANDER ACOSTA, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff,
v.
GINGER GREEN, INC., a corporation; AQUA FASHION, INC., a corporation; CHANG LEE, an individual, HYE KYUNG LEE, an individual; HAE LEE, an individual; GILSU PARK, an individual; JE FASHION, INC., [1] a corporation; KYU YOUNG YOO, an individual, Defendants.

          CONSENT JUDGMENT AND ORDER

         Plaintiff R. Alexander Acosta, Secretary of Labor, United States Department of Labor (“Secretary”), and Defendants Ginger Green, Inc. (“Ginger Green”) Chang Lee, Hye Kyung Lee, and Hae Lee (“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:

         A. The Secretary has filed a Complaint alleging that the Defendants violated provisions of Section 15(a)(1), 29 U.S.C. § 215(a)(1) of the Fair Labor Standards Act of 1938, as amended (“FLSA”), and Section 11(a), 29 U.S.C. § 211(a) of the FLSA.

         B. Defendants appeared by counsel, acknowledged receipt of a copy of the Secretary's Complaint, and filed their answer on August 9, 2018;

         C. The Secretary and Defendants waive Findings of Fact and Conclusions of Law, and agree to the entry of this Consent Judgment;

         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.

         FACTUAL BACKGROUND

         E. Defendant Ginger Green is a garment manufacturer that sells apparel to clothing retailers, including TJX Companies, Inc., Ross, Fashion Nova, Gaudy Me, Suzy Shier, A'Graci Cornerstone, and Windsor. Defendant Ginger Green secures garment orders with their retailers and then contracts with sewing factories, including Defendants Aqua Fashion, Inc. (“Aqua”) and JE Apparel, Inc. (“JE”), to complete the garments for their orders. Ginger Green supplies the cut fabric, design and other style requirements to the sewing factory that produces the finished garments.

         F. Defendants Change Lee, Hye Kyung Lee, and Hae Lee are co-owners of Ginger Green.

         G. The Secretary's investigation of both the Aqua and JE factory revealed violations of the FLSA's minimum wage, overtime, and recordkeeping provisions. At each location, employees are paid a piece rate or a weekly salary, regardless of the number of hours worked, resulting in hourly wages below minimum wage. Employees at each location also work over 40 hours per week but do not receive overtime compensation.

         H. The Secretary's investigation revealed that retailer, TJX Companies, Inc. paid Ginger Green the same unit price for both domestic and foreign made garments.

         I. The Secretary found that workers who produced Ginger Green garments domestically were paid as little as $2.25 per hour.

         J. Under the FLSA's “Hot Goods” provision, 29 U.S.C. § 215(a)(1), all persons are prohibited from introducing into commerce goods that have been worked on by employees who were not paid the wages required under the FLSA.

         K. Following inspection of the Aqua factory, Wage and Hour investigators notified Ginger Green that all garments made by Aqua within the last 90 days were hot goods and that the Secretary objected to shipment of these goods into interstate commerce.

         L. Ginger Green agreed to refrain from shipping or selling hot goods unless and until the Secretary's investigation was resolved with payment to the workers of all monies due. Ginger Green promptly violated this agreement and continued to ship goods identified as “hot goods” while lying to the Secretary about the shipment of these goods and actively obscuring the evidence that they had shipped the hot goods.

         M. After filing his Complaint, the Secretary identified the following seven (7) additional domestic sewing contractors producing garments for Ginger Green, Sung Hee Park dba as Super Seam, Inc., SC Style, Inc., HJ Fashion, Inc., KBKB Fashion, Inc., All is Well, Inc., Keep in Touch TS, Inc., and BSY Fashion, Inc., all of which operated in violation of the FLSA's wage provisions, thus producing hot goods for Ginger Green.

         ORDERED, ADJUDGED, AND DECREED that the Defendants, their officers, agents, servants, 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 they hereby are, permanently enjoined and restrained from violating the provisions of Section 15(a)(1), 29 U.S.C. § 215(a)(1) of the Fair Labor Standards Act of 1938, as amended (“FLSA”), in any of the following manners:

         1. 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 the Defendant 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);

         2. Defendants shall not fail to disgorge, from the gross proceeds of their having sold or shipped in commerce goods that had been worked on by employees of Aqua Fashion, Inc., JE Apparel, Inc., Sung Hee Park dba as Super Seam, Inc., SC Style, Inc., HJ Fashion, Inc., KBKB Fashion, Inc., All is Well, Inc., Keep in Touch TS, Inc., and BSY Fashion, Inc. who were not paid the minimum wage and overtime required by the FLSA, 29 U.S.C. §§ 206 and 207, an amount sufficient to cover the back wages due to these employees under the FLSA. The amount hereby found due to these employees is $357, 993.81 for the following periods:

Aqua Fashion, Inc.: January 10, 2018 to May 7, 2018;
JE Apparel, Inc.: February 9, 2018 to May 9, 2018;
Super Seam, Inc.: March 15, 2018 to June 12, 2018;
SC Style, Inc.: March 15, 2018 to June 12, 2018;
HJ Fashion, Inc.: January 31, 2018 to May ...

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