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USDOL v. Schrock Road Markets, Inc., 2001-CLA-73 (ALJ May 19, 2003)


U.S. Department of LaborOffice of Administrative Law Judges
36 E. 7th Street, Suite 2525
Cincinnati, OH 45202

(513) 684-3252
(513) 684-6108 (FAX)

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Issue Date: 19 May 2003

Case No.: 2001-CLA-0073

In the Matter of:

ELAINE L. CHAO, SECRETARY OF LABOR,
UNITED STATES DEPARTMENT OF LABOR,
    Plaintiff

    v.

SCHROCK ROAD MARKETS, INC.
d/b/a JUBILEE FOODS,
    Respondent

APPEARANCES:

Linda M. Hastings, Esq.
U.S. Department of Labor, Office of the Solicitor
    For the Plaintiff

Dennis L. Pergram, Esq.
Manos, Martin, Pergram & Dietz
    For the Respondent

BEFORE: Robert L. Hillyard
    Administrative Law Judge

DECISION AND ORDER

   This proceeding arises under the Fair Labor Standards Act, as amended, 29 U.S.C. §§ 201 et seq., (the Act), and the regulations promulgated thereunder at 20 C.F.R. Parts 570, 579, and 580. The Wage and Hour Division of the Department of Labor, after investigation, assessed a civil money penalty against the Respondent, in the amount of $11,250.00 for the employment of twenty-five minors contrary to the Act and the Regulations. Schrock Road Markets, Inc., doing business as Jubilee Foods (Respondent or Jubilee Foods), disputes the accuracy and reasonableness of the penalty and requests review of the imposition of the civil money penalties imposed pursuant to Section 16(e) of the Act and Titles 29 C.F.R. 570, 579, and 580 for alleged violations of the Child Labor Provisions of the Act.

   A formal hearing was held in Columbus, Ohio on June 26, 2002. Each of the parties was afforded full opportunity to present evidence and argument at the hearing, as provided in the Act and regulations issued thereunder, which are found in Title 29 of the Code of Federal Regulations. Regulation section numbers mentioned in this Decision and Order refer to sections of that title. Post-hearing briefs were filed by the Plaintiff and the Respondent, and have been considered in this decision.


[Page 2]

I. BACKGROUND

   The Respondent operates a grocery store under the trade name, Jubilee Foods. Beth Phillips-Glacken (Glacken), an investigator employed by the Wage and Hour Division of the Employment Standards Administration, U.S. Department of Labor, visited the Respondent's store and reviewed payroll records to determine compliance with child labor laws (Tr. 23, 36)1 . She found violations of the time and hour restrictions imposed by 29 C.F.R. § 570.35,2 which provides:

    (a) Except as provided in paragraph (b) of this section, employment in any of the occupations to which this subpart is applicable shall be confined to the following periods:

(1) Outside school hours;
(2) Not more than 40 hours in any 1 week when school is not in session;
(3) Not more than 18 hours in any 1 week when school is in session;
(4) Not more than 8 hours in any 1 day when school is not in session;
(5) Not more than 3 hours in any day when school is in session;
(6) Between 7:00 a.m. and 7:00 p.m. in any 1 day, except during the summer (June 1 through Labor Day) when the evening hour will be 9:00 p.m.

   The specific violations are listed on Wage and Hour Form 103 (WH-103)(PX 2). The penalty originally assessed was $11,700.00, representing $450.00 each for twenty-six minors who were found to be employed in violation of the child labor provisions of the Act (ALJX 2). The complaint was later modified, to allege twenty-five violations, and the civil money penalty was reduced by $450.00 to $11,250.00 (ALJX 6; PX 2).

II. ISSUES

   The specific issues presented for resolution as noted at the formal hearing are as follows (Tr. 12):

1. Whether the Respondent employed minors in violation of the time and hours restrictions promulgated by the Secretary of Labor. Specifically, the Respondent is charged with violating the following regulations:

a. Employing a minor for more than 3 hours on a school day (29 C.F.R. § 570.35(a)(5));

b. Employing a minor for more than 18 hours in a school week (29 C.F.R. § 570.35(a)(3));

c. Employing a minor past 7:00 p.m. in any one day, or past 9:00 p.m. between June 1st and Labor Day (29 C.F.R. § 570.35(a)(6)); and,

d. Employing a minor for more than 8 hours on a non-school day (29 C.F.R. § 570.35(a)(4)).

2. Whether the minors were actually working during these hours, despite the fact that they were paid for these hours;

3. Whether the civil money penalties assessed by the Department of Labor are appropriate and reasonable in light of 29 C.F.R. § 579.5 and the facts of this case; and,

4. Whether the alleged violations are de minimus.


[Page 3]

III. STIPULATIONS

   The parties agreed to the following stipulations (Tr. 10):

1. The Respondent is an employer subject to the Fair Labor Standards Act and its regulations; and,

2. Exhibit 2 [PX 2], the WH-103 prepared by Investigator Glacken shall be made a part of the record.

IV. EVIDENTIARY RECORD

   The evidence upon which this Decision and Order is based consists of the testimony of the witnesses who testified at the hearing and documentary evidence which was introduced at the hearing. The following witnesses testified at the hearing:

   Andrew Michael Shafer, a former employee of Jubilee Foods, testified concerning his experiences as a minor employee with Jubilee Foods, including the hours he clocked in and out, and the hours he actually worked.

   Beth Phillips-Glacken, an investigator for the Wage and Hour Division of the U.S. Department of Labor, testified about her investigation of the Respondent's employment practices and the subsequent violations she recorded.

   Richard E. Blaylock, Assistant District Director for the Columbus, Ohio District Office of the Wage and Hour Division, testified concerning his review of the report and violations found by Ms. Glacken.

   Joseph A. Cousins, Manager, President, and Owner of Jubilee Foods, testified about the hiring practices, scheduling, and payment of minors and all employees at Jubilee Foods.

V. TESTIMONY

   Andrew Michael Shafer (Shafer) testified about his employment as a cashier and a bagger with Jubilee Foods from mid-summer 2000 through the early summer of 2001 (Tr. 14) Shafer said that he was fourteen years old when hired, and fifteen years old when he resigned. Shafer testified that he once worked until after 10:00 p.m., and occasionally worked until 8:30 p.m. on Fridays during the school year (Tr. 15-16). According to Shafer, he would walk to work, punch in at the time clock, and immediately begin working (Tr. 16). He stated that he never waited to start working after punching in at the time clock, because he did not want to "get in trouble" (Tr. 16). According to Shafer, he was told to "punch in and only be on the clock when [he was] working" (Tr. 21).


[Page 4]

   Glacken, an investigator for the Wage and Hour Division, testified about her investigation and findings of violations at Jubilee Foods. Glacken based her findings on interviews with Jubilee Foods employees, and a review of the time records at the store. She testified that Jubilee Foods violated the hours restrictions for the employment of minors, because they allowed minors to work more than three hours on a school day, past 7:00 p.m. during the school year, past 9:00 p.m. between June 1st and Labor Day, and in excess of 18 hours in a school week (Tr. 26-31). Glacken said that she assessed penalties based on a form which sets out the formula for calculating the penalty (Tr. 32). She determined that twenty-five minors were in violation of the Act, and the penalty for each minor in violation is $450.00, for a total of $11,250.00. She stated that the $450.00 is the fine imposed by the Field Operations Handbook (Tr. 32). A reduction in the penalty amount may be allowed, based on the size and dollar volume of the store (Tr. 33). According to Glacken, Jubilee Foods was not eligible for a penalty reduction, because its dollar volume was over $800,000.00 per year (Tr. 33).

   Richard E. Blaylock, (Blaylock), the Assistant District Director for the Columbus District Office of the Wage and Hour Division, testified that he reviewed Ms. Glacken's investigative file on Jubilee Foods (Tr. 60). He said her documentation was in order, and that her penalty assessment was correct (Tr. 62). Blaylock testified that Jubilee had no prior record of violation, which could act as an aggravating factor and would cause the penalty to be increased (Tr. 62). He would not consider mitigation in this case, due to the dollar volume of the store and the number of minors involved (Tr. 62). Blaylock concluded that the violations were not de minimus, because there were twenty-five minors involved and there was more than one violation for each minor (Tr. 63).

   Joseph A. Cousins, (Cousins), the Manager, President, and Owner of Jubilee Foods, testified that "about 50 percent of our employees are minors," and that during 1999 and 2000, his store was "twenty-five percent short of help," leading them to hire "as many minors as possible to work, just to cover" (Tr. 82). Cousins said that the minors punched in at the time clock upon arrival at the store, and then changed into work clothes before starting work (Tr. 70-71). He noted that some employees from "ARC" and "United Methodist"3 "wouldn't even know how to read a time clock," and "[w]e would actually have to find them and kind of bring them up to . . . the time clock" (Tr. 72). According to Cousins, some of the minors would forget to punch out and would call the store and have another minor punch them out on the time clock (Tr. 73). He stated that "what we would try and do is take a notepad, write that individual down," and then call ADP to adjust the time clock (Tr. 73). Cousins said that in 1999 and 2000, minors were paid for time they did not actually work, because the time clock had to be audited through the computer and "[w]e are not the most computer-literate people" (Tr. 74).

   The store used ADP payroll service, which supplied them with "an old time clock" that is "actually a converted Veriphone or credit card machine" (Tr. 69). According to Cousins, he could not afford a more sophisticated time clock which would cost approximately $56,000.00, if he split the cost with another store (Tr. 75-76). He said that Jubilee Food's gross revenues were about five million dollars in 1999 and about six million dollars in 2000 (Tr. 76). Since the investigation, his store "underschedules" minors, by ending their shifts at 6:45 p.m., and scheduling them seventeen hours per week (Tr. 75). Following the investigation, he now separates the names of the minors on the time schedule, and posts the schedule near the time clock, so that the manager on duty can "check those employees" (Tr. 82).


[Page 5]

VI. FINDINGS OF FACT

   Based upon my review of the record, as summarized above, I make the following credibility and factual findings:

   1. The Respondent violated the Act on 18 occasions between 1999 and 2000. Eighteen minors worked at Jubilee Foods during times that were either; more than 3 hours on a school day, more than 18 hours in a school week, after 7:00 p.m. in any one day, or after 9:00 p.m. between June 1st and Labor Day; or, more than 8 hours on a non-school day.

   2. The penalty of $11,250.00, was based on the Wage and Hour Field Operations Handbook.

   3. In determining the penalty to be imposed, Glacken and Blaylock took into consideration the factors listed at § 579.5, including the number of minors involved, the size and dollar amount of the business, prior history of violations, and whether the violations were de minimus.

   4. The policies established by the Respondent to ensure compliance with the child labor laws were largely implemented after the Wage and Hour investigation.

   5. The Respondent has no history of prior violations of the Act.

VII. PENALTY EVALUATION

   My evaluation of the above penalty involves a two-tiered analysis. Part I of my analysis involves examining each of the violations to determine whether: (1) the Plaintiff has proven the violation; and, (2) if the violation has been proven, to decide whether the Plaintiff applied the proper penalty amount. The penalty amount listed in Part I of the analysis represents the penalty assessed by the Plaintiff, subject to change under Part II of the analysis. Part II of the analysis involves the application of the factors found in § 579.5, to determine if any reduction in the penalty is merited.

Part I: Alleged violations of 29 C.F.R. § 570.35

   The child labor provisions of the Fair Labor Standards Act seek to "protect the safety, health, well-being, and opportunities for schooling of youthful workers." 29 C.F.R. § 570.101(a). Section 12(c) of the Act provides that "no employer shall employ any oppressive child labor." 29 U.S.C. § 212(c). Oppressive child labor is defined as a condition of employment under which . . .

(2) any employee between the ages of sixteen and eighteen years is employed by an employer in any occupation which the Secretary of Labor shall find and by order declare to be particularly hazardous for the employment of children between such ages or detrimental to their health and well-being . . .

29 C.F.R. § 570.117(a). Pursuant to 29 C.F.R. § 570.35(a)(1)-(6), the following periods and conditions of employment are applicable to 14-16 year olds:

(1) Outside school hours;
(2) Not more than 40 hours in any one week when school is not in session;
(3) Not more than 18 hours in any one week when school is in session;
(4) Not more than 8 hours in any one day when school is not in session;
(5) Not more than 3 hours in any one day when school is in session;
(6) Between 7:00 a.m. and 7:00 p.m. in any one day, except during the summer (June 1 through Labor Day), when the evening hour will be 9:00 p.m.


[Page 6]

   A. Supported Violations

   I find that the following alleged violations of § 570.35 have been established:

   1. David Bennett's Timecard Report for Tuesday, August 22, 2000 shows that he worked past 9:00 p.m. during the summer (June 1 through Labor Day)(ALJX 12; PX 1).

   2. Timothy Bennett's Timecard Report for Tuesday, September 5, 2000 shows that he worked past 7:00 p.m. on any one day after Labor Day (ALJX 12).

   3. a. Eric Clark's Timecard Report for Friday, May 26,

2000 shows that he worked past 7:00 p.m. [3:58 p.m. to 8:27 p.m., and 8:44 p.m. to 9:15 p.m.], on any one day after Labor Day (ALJX 12).

       b. Eric Clark's Timecard Report for Saturday, July 15, 2000, shows that he worked past 9:00 p.m., [9:08 p.m.] on any one day between June 1st and Labor Day (ALJX 12).

   4. Noelle Drewes' Timecard Report for September 9, 2000 shows that she worked until 9:04 p.m. on a day after Labor Day (ALJX 12).

   5. Joel Friedman's Timecard Report for September 5, 2000 and September 7, 2000 shows that he worked past 7:00 p.m. [7:11 p.m. and 7:22 p.m., respectively] on a day after Labor Day (ALJX 12).

   6. Amanda McClary's Timecard Report for September 12, 2000 through September 17, 2000 shows that she worked past 7:00 p.m. on: September 13, 2000 [7:03 p.m.]; September 14, 2000 [7:01 p.m.]; and September 16, 2000 [7:03 p.m.].

   7. Bronwyn Meyer's Timecard Report for August 14, 1999 and August 15, 1999 shows that he worked past 9:00 p.m. on August 14, 1999 [9:29 p.m.]; and August 15, 1999 [9:30 p.m.].

   8. Harrison Meyer's Timecard Report for January 22, 2000 and January 28, 2000 shows that he worked past 7:00 p.m. on January 22, 2000 [8:58 p.m.]; and January 28, 2000 [9:02 p.m.].

   9. Adam O'Brien's Timecard Report for September 8, 2000 and January 25, 2001 shows that he worked past 7:00 p.m. on September 8, 2000 [7:10 p.m.]; and January 25, 2001 [7:06 p.m.].

   10. Daniel Puckett's Timecard Report for Saturday, October 16, 1999, shows that he worked in excess of 8 hours on a non-school day [8.25 hours total].

   11. Meghan Rau's Timecard Report for Friday, March 10, 2000, and Friday, April 7, 2000, shows that she worked past 7:00 p.m. on March 10, 2000 [8:10 p.m.]; and April 7, 2000 [7:05 p.m.].


[Page 7]

   12. Victor Rendina's Timecard Report for Saturday, October 16, 1999, shows that she worked more than 8 hours on a non-school day [8.63 hours].

   13. a. Ciera Seipel's Timecard Report for August 6, 2000 August 11, 2000, and September 9, 2000 shows that she worked past 9:00 p.m. between June 1st and Labor Day [10:01 p.m., 9:54 p.m., and 10:27 p.m., respectively].

       b. Ciera Seipel's Timecard Report for Saturday, August 12, 2000 shows that she worked more than 8 hours on a non-school day [8.63 total].

   14. a. Andrew Shafer's Timecard Report for Tuesday, August 15, 2000 shows that he worked past 9:00 p.m. [10:17 p.m.] on a day between June 1st and Labor Day.

       b. Andrew Shafer's Timecard Report for Monday, December 11, 2000 shows that he worked past 7:00 p.m. [7:02 p.m.] on a day between Labor Day and June 1st.

   15. Keali Stewart's Timecard Report for Wednesday, August 9, 2000 shows that she worked past 9:00 p.m. [10:12 p.m.] on a day between June 1st and Labor Day.

   16. a. Kathleen Steyer's Timecard Report for Sunday, December 24, 2000 shows that she worked more than 8 hours on a non-school day [8.38 hours].

       b. Kathleen Steyer's Timecard Report for Saturday, January 6, 2001 shows that she worked past 7:00 p.m. [8:56 p.m.] on a day between Labor Day and June 1st.

   17. Zach Treadway's Timecard Report for Monday, July 19, 1999; Tuesday, July 20, 1999; and, Thursday, July 22, 1999 shows that he worked past 9:00 p.m. [10:04 p.m., 9:39 p.m., and 10:10 p.m., respectively] on a day between June 1st and Labor Day.

   18. a. Alan Yost's Timecard Report for Saturday, August

12, 2000 shows that he worked more than 8 hours [8.56 hours] on a non-school day.

       b. Alan Yost's Timecard Report for Thursday, January 18, 2001; Friday, January 19, 2001; and, Saturday, January 20, 2001 shows that he worked past 7:00 p.m. [7:03 p.m., 7:01 p.m., and 9:00 p.m., respectively], on a day between Labor Day and June 1st.

   B. Unsupported Violations4

   I find that the following alleged violations of § 570.35 have not been established:


[Page 8]

   1. The Plaintiff is unable to support its claim that Christopher Bachelor worked more than three hours on any one day while school was in session. The only evidence given to support this claim is Mr. Bachelor's timecard report, and Glacken's hand-written transcript of the report, which lists the total hours worked each day (ALJX 12; PX 1). Although the report shows that Mr. Bachelor worked in excess of three hours on certain weekdays, the Plaintiff has not produced any evidence that school was in session on those days. I cannot assume that school was in session. Therefore, I find that this violation has not been established. See U.S. Dept. of Labor v. Sewell-Allen, Inc. and Piggly Wiggly Memphis, Inc., 1992-CLA-160; 1992-CLA-161, slip. op. at 35-36 (May 24, 1995)(finding that a violation is unsupported where no evidence is proffered indicating how many hours were worked each day, or whether the days in question were school days).

   2. The Plaintiff is unable to support its claim that David Bennett worked past 7:00 p.m. and more than three hours on a school day. Mr. Bennett's Timecard for January 12, 2001 shows that he punched out exactly at 7:00 p.m. For the reasons stated above, at B.1., the Plaintiff has not supported its claim that Mr. Bennett worked more than three hours on a school day.

   3. The Plaintiff is unable to support its claims that Timothy Bennett worked more than 3 hours on a school day, and more than 18 hours in a school week. The evidence submitted to support the claims is Mr. Bennett's Timecard Report, which shows that he worked in excess of 18 hours during the week ending October 14, 2000, and more than three hours on Tuesday, September 5, 2000, and during the week ending October 14, 2000. However, the Plaintiff submitted no evidence to show that school was in session on September 5, 2000, or during the week ending October 14, 2000. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Mr. Bennett worked in excess of three hours on a school day. Additionally, the Plaintiff has failed to show that Mr. Bennett worked in excess of eighteen hours in a school week, because I cannot assume that certain weeks of the year qualify as school weeks.

   4. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Brian Carnahan worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   5. None of the timecards submitted for Eric Clark show that he worked more than 8 hours on a non-school day. Therefore, this violation is not established.

   6. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Jessica Cowans worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   7. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Noelle Drewes worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   8. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Joel Friedman worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   9. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Elizabeth Hughes worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   10. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Elias Marzan worked more than three hours on any day while school was in session. Therefore, this violation is not established.


[Page 9]

   11. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Amanda McClary worked more than three hours on any day while school was in session, or more than 18 hours in a school week. Therefore, this violation is not established.

   12. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Harrison Meyer worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   13. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Adam O'Brien worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   14. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Daniel Puckett worked more than three hours on any day while school was in session. Additionally, the Plaintiff has failed to show that he worked past 7:00 p.m. on any day after Labor Day, because he punched out at exactly 7:00 p.m. on Tuesday, November 9, 1999. Therefore, this violation is not established.

   15. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Meghan Rau worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   16. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Victor Rendina worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   17. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Andrew Shafer worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   18. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Keali Stewart worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   19. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Patricia Ward worked more than three hours on any day while school was in session. Therefore, this violation is not established. Additionally, the Plaintiff has failed to demonstrate that Patricia Ward worked past 7:00 p.m. between Labor Day and June 1st, or worked past 9:00 p.m. between June 1st and Labor Day, because she punched out at exactly 7:00 p.m., and exactly 9:00 p.m. on the dates in question.

   20. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Alan Yost worked more than three hours on any day while school was in session. Therefore, this violation is not established.


[Page 10]

   21. For the reasons stated above, at B.1., the Plaintiff has failed to demonstrate that Andrew Zeidner worked more than three hours on any day while school was in session. Therefore, this violation is not established.

   Based upon the foregoing, I find that the Respondent employed eighteen minors in violation of the hours restrictions imposed by 29 C.F.R. § 570.35 (a)(3)-(6). I find that the Plaintiff has not established twenty-one of the violations noted on form WH-103, primarily relating to working more than three hours on any school day, because the Plaintiff has not established which days of the year that school is in session. Although twenty-one violations are unsupported, the penalty will be reduced by only seven violations (the difference between the twenty-five original violations as charged, and the eighteen violations I found to be supported), because the Respondent was charged a penalty for each minor employed in violation of the Act, not for each specific violation of the Act. As such, I find that eighteen violations of the Act are supported. Relying on the penalty amount of $450.00 per minor (PX 2, ALJX 2), these violations result in a penalty of $8,100.00. See U.S. Dept. of Labor v. Sewell-Allen, Inc. and Piggly-Wiggly Memphis, Inc., 1992-CLA-160, 1992-CLA-161, slip. op. at 37 (May 24, 1995). This amount will now be reviewed in light of § 579.5 to determine whether any further reductions are merited.

Part II: Application of § 579.5

   I will review the violations, and determine whether a reduction in the penalty is warranted. A reduction must be based on a thorough evaluation of the factors. See U.S. Dept. of Labor v. Sewell-Allen, Inc. and Piggly Wiggly Memphis, Inc., 1992-CLA-160; 1992-CLA-161, slip. op. at 38 (May 24, 1995); Acting Administrator, Wage and Hour Division v. Supermarkets General Corp., 1990-CLA-0034 (Sec'y Jan. 13, 1993).

   Twenty-nine C.F.R. § 579.5 states, in pertinent part:

(b) In determining the amount of such penalty there shall be considered the appropriateness of such penalty to the size of the business of the person charged with the violation . . . taking into account the number of employees employed by that person, dollar volume of sales . . . and such other information as may be available relative to the size of the business of such person.

(c) In determining the amount of such penalty there shall be considered . . . the gravity of the violation taking into account . . . any history of prior violations, any evidence of willfulness or failure to take reasonable precautions to avoid violations; the number of minors illegally employed, the age of the minors . . .; the occupation in which the minors were so employed . . .; exposure of such minors to hazards and any resultant injury to such minors; the duration of such illegal employment; and as appropriate, the hours of the day in which it occurred and whether such employment was during or outside school hours.

   The mandatory language in subsections (b) and (c) dictates that all of the specified elements must be considered in assessing the penalty. Furthermore, subsection (d), discussed infra, sets forth two alternatives, (d)(1) and (d)(2), wherein if either is satisfied, a penalty reduction is appropriate. The criteria in subsection (d) is joined by "and," signifying that all factors listed in (d)(1), or all the factors in (d)(2) must be satisfied before the penalty may be reduced. See Acting Administrator, Wage and Hour Division v. Supermarkets General Corp., 1990-CLA-0034, slip. op. at 3 (Sec'y Jan. 13, 1993).


[Page 11]

   Applying the factors in § 579.5 (b) and (c), the circumstances in the present case do not merit a reduction in the penalty, except where I found that twenty-one violations were unsupported. In regard to the eighteen supported violations, most damaging to the Respondent's cause is the fact that the violations were willful. Conduct is considered willful where the employer knew or showed reckless disregard for whether conduct was prohibited by statute. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). Bad purpose or evil intent on the part of a respondent is not necessary to demonstrate that the violations were willful. Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139 (5th Cir. 1971). In the present case, Cousins testified that "about 50 percent of our employees are minors," and that during 1999 and 2000, his store was "twenty-five percent short of help," which led him to hire "as many minors as possible to work, just to cover" (Tr. 82). In its Post-Hearing Brief, the Respondent argues that "it is virtually impossible to track these minors for every minute of the day to make certain that they clock in when they are supposed to and clock out when they are supposed to" (Respondent's Post-Hearing Brief, at 5). However, Mr. Cousins, testified that after Glacken visited the store and recorded the violations, his management staff began separating the names of the minors on the time schedule, scheduling them to work earlier hours, and posting the time schedule near the time clock (Tr. 82). Additionally, the Plaintiff provided the testimony of former employee Andrew Shafer, who was employed at Jubilee Foods from the ages of fourteen to fifteen. Shafer testified that he once worked until after 10:00 p.m., and occasionally worked until 8:30 p.m. on Fridays during the school year (Tr. 15-16). According to Shafer, he walked to work, punched in at the time clock, and immediately began working (Tr. 16). He was told to "punch in and only be on the clock when [he was] working" (Tr. 21). Respondent offered no testimony from other employees to refute Shafer's testimony.

   Respondent's casual business practices regarding the employment of fourteen and fifteen-year-olds may not be used as an excuse to warrant a reduction in the penalty. Additionally, the number of minors found to be employed in violation of the Act, the fact that many minors named were found to be employed in violation of the Act more than once, and the ease with which the Respondent could have been discovered these violations, constitutes a reckless disregard for compliance with the Act. See Acting Administrator, Wage and Hour Division v. Supermarkets General Corp., 1990-CLA-0034 (Sec'y Jan. 13, 1993). Therefore, based upon the foregoing, no reduction in the penalty is warranted.

   Another component preventing further reduction of the penalty is the duration of the illegal employment. The violations in question were repetitive, and took place over the two year period analyzed by Glacken. Given the longevity of the violations, penalty reduction is not merited.

   While the occupations in which the minors were employed were non-hazardous (baggers, stockers, cashiers), the majority of violations took place after Labor Day and before June 1st, and all of the violations involved students fourteen or fifteen years of age. Although Cousins testified that many of his employees were from community outreach programs such as "ARC" and "United Methodist," I find this to be an even more compelling reason for refusing to grant a reduction in the penalty. The non-hazardous nature of the minors' intended duties is not a controlling factor in reducing the penalty.

   The Respondent's lack of prior violations is not sufficient to merit reduction in the penalty. Given the repetitive nature of the violations and the number of minors involved, I do not find that the absence of prior violations merits reduction in the penalty.


[Page 12]

   Twenty-nine C.F.R. § 579.5(d) sets forth two additional factors which, if applicable, may lead to a reduction of the penalty. Twenty-nine C.F.R. § 579.5(d)(1) and (2) allow for the consideration of:

(d)(1) Whether the evidence shows that the violation is "de minimus" and that the person so charged has given credible assurance of future compliance, and whether a civil penalty in the circumstances is necessary to achieve the objectives of the Act; or

(d)(2) Whether the evidence shows that the person so charged had no previous history of child labor violations, that the violations themselves involved no intentional or heedless exposure of any minor to any obvious hazard or detriment to health or well-being and were inadvertent, and that the person so charged has given credible assurance of future compliance, and whether the civil penalty in the circumstances is necessary to achieve the objectives of the Act.

   Many factors, discussed supra, at pages 15-16, prevent the violations from being classified as de minimus, including: the age of the minors in question [fourteen and fifteen-year-olds]; the repetitive nature of the violations; the fact that the majority of violations took place after Labor Day and before June 1st; Mr. Cousins' testimony regarding the large number of minor employees [50 percent], at least a few of whom were hired through community outreach programs, and the Respondent's inability or unwillingness to keep track of those employees. See Administrator, Wage and Hour Division v. Lamplighter Tavern, 1992-CLA-21 (Sec'y May 11, 1994) (Secretary found violations were not de minimus where there were multiple violations regarding each child); Acting Administrator, Wage and Hour Division v. Supermarkets General Corp., 1990-CLA-34 (Sec'y Jan. 13, 1993). For the reasons stated, I find that the violations are not de minimus.

   A civil penalty is necessary to achieve the objectives of the Act. The purpose of the Act is to "protect the safety, health, well being, and opportunities for schooling of youthful workers . . ." 29 C.F.R. § 570.101. As noted by the Secretary in Acting Administrator, Wage and Hour Division v. Chism Trail, Inc. d/b/a Maxi Food and Ray Chism, Jr., Case No. 1992-CLA-45 (June 30, 1993), "The legislative history of the increased CMP [civil money penalties] provision as well as the Department's own regulatory history establishes that the substantial increase in the CMP maximum was to have an impact on penalty sizes – even in cases which do not present the most egregious violations." Id., slip op. at 9. See also, Maria Echaveste, Administrator, Wage and Hour Division v. Tom Saylor, Tom Scott, and Scott & Saylor Western Steer Steakhouse, Inc., Case Nos. 1993-CLA-18, 1993-CLA-22, 1993-CLA-23 (Sept. 27, 1996), "One cannot review the legislative history of this amendment without coming to an understanding that the key underlying Congressional purpose in its enactment was to provide more vigorous enforcement of the child labor restrictions, including . . . the use of the CMP mechanism." Id. slip op. at 3. Since the violations in the case at bar threatened the safety, health, and well being of the minors, the assessment of a civil fine is necessary to deter future like conduct. The Respondent's assurances of future compliance are not enough to further reduce the penalty, given the overall weight of the evidence against them.

   The penalty cannot be further reduced, due to the willful nature of the violations, the repetitive nature of the violations, and the potential effects on the minors' health and well being. Since the Respondent satisfied only one element of subsection (d) (assurance of future compliance), the penalty will not be reduced.

   After completely and thoroughly reviewing the factors contained in § 579.5, I find that the weight of the evidence does not support further reduction in the penalty.


[Page 13]

VIII. CONCLUSION

   The Plaintiff's request for a penalty of $11,250.00 for 25 minors employed in violation of the Act is reduced to $8,100.00 for eighteen minors employed in violation of the Act, based on the Plaintiff's failure to prove all of the alleged violations. Further reduction of the fine based on the application of § 579.5 is not merited.

IX. ORDER

   It is, therefore,

   ORDERED, that the Respondent, Schrock Road Markets, Inc. d/b/a Jubilee Foods, is hereby assessed a penalty of $8,100.00 for violations of the Act, as determined in this Decision and Order.

       ROBERT L. HILLYARD
       Administrative Law Judge

NOTICE OF APPEAL RIGHTS: Pursuant to 29 C.F.R. § 580.13, any party dissatisfied with this Decision and Order may appeal it to the Secretary of Labor within thirty (30) days of the date of this Decision, by filing a Notice of Appeal with the Secretary of Labor, United States Department of Labor, Washington, D.C. 20210. A copy of the Notice of Appeal must be served on all parties to this Decision and Order and on the Chief Administrative Law Judge, United States Department of Labor, 800 K Street, N.W., Suite 400, Washington, D.C. 20001-8002. If no timely appeal is made, this Decision and Order shall be deemed the final agency action.

[ENDNOTES]

1 In this Decision and Order, "ALJX" refers to the Administrative Law Judge's Exhibits, "PX" refers to the Plaintiff's Exhibits, "RX" refers to the Respondent's Exhibits, and "Tr." refers to the transcript of the June 26, 2002 hearing.

2 Pursuant to § 570.32, § 570.35 applies to minors between the ages of fourteen and sixteen.

3 Cousins testified that ARC and United Methodist are programs for students with disabilities or "wayward children," who are available to work during the day (Tr. 83).

4 The civil money penalty was calculated at the rate of $450.00 per minor, not per violation. Therefore, although the Plaintiff is unable to support the violations listed under section B, infra, the Respondent may still be responsible for a penalty relating to a named minor, if there is also a supported violation (under section A, supra), involving that minor.



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