CASE NO: 94-CLA-38

In the Matter of

ADMINISTRATOR, WAGE & HOUR
DIVISION
U. S. DEPARTMENT OF LABOR,
    Plaintiff,

    v.

DESOTO ENTERPRISES, d/b/a
DESOTO BEACH CLUB
    Respondent

Appearances:

    Leslie John Rodriguez, Esq.
       For the Plaintiff

    Dr. William and Scott Sutlive, pro se
       For the Respondents

Before: RALPH A. ROMANO
    Administrative Law Judge

    This is a proceeding to impose a civil money penalty for violation of the Fair Labor Standards Act of 1938 (hereinafter "the Act") as amended, 29 U.S.C. 201 et seq. and the regulations issued thereunder at 29 C.F.R. 580.3 et seq.

    A hearing was held on October 22, 1996 in Savannah, Georgia, at which time the parties were given full opportunity to present witnesses, and present their claims and defenses. References to the record are ALJ for Administrative Law Judge exhibits; Tr. for transcript of hearing; "P" for Plaintiff exhibits.

    Although the parties were invited to submit briefs, none was filed.

    At issue is: (a) whether Respondents have committed a violation of the Act, and (b) whether the amount of the penalty assessed was appropriate. 29 C.F.R. 580.12(b).

    29 U.S.C. 216(e) reads, in pertinent part, as follows:

(e) Any person who violates the provisions of section 212 of this title, relating to child labor, or any regulation issued under that section, shall be subject to a civil penalty of not to exceed $10,000 for each employee who was the subject of such a violation. Any person who repeatedly or willfully violates section 206 or 207 of this title shall be subject to a civil penalty of not to exceed ,000 for each such violation. In determining the amount of any penalty under this subsection, the appropriateness of such penalty to the size of the business of the person charged and the gravity of the violation shall be considered.

    29 C.F.R. 579.5, in pertinent part, reads as follows:

§579.5 Assessing the penalty.

(a) The administrative determination of the amount of the civil penalty, of not to exceed $10,000 for each employee who was the subject of a violation of section 12 of the Act relating to child labor or of any regulation issued under that section, shall be based on the available evidence of the violation or violations and shall take into consideration the size of the business of the person charged and the gravity of the violation as

provided in paragraphs (b) through (d) of this section.

(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 or violations, taking into account the number of employees employed by that person (and if the employment is in agriculture, the man-days of hired farm labor used in pertinent calendar quarters), dollar volume of sales or business done, amount of capital investment and financial resources 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 appropriateness of such penalty to the gravity of the violation or violations, taking into account, among things, 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 so employed and records of the required proof of age; the occupations in which the minors were so employed; exposure to such minors to hazards and any resultant injury to such minors; the duration of such illegal employment; and, as appropriate, the hours of the date in which it occurred and whether such employment was during or outside school hours.

(d) Based on all of the evidence available, including the investigation history of the person so charged and the degree of willfulness involved in the violation, it shall further be determined, where appropriate.

(1) Whether the evidence shows that the violation is "de minimis" 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

(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 headless 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 a civil penalty in the circumstances is necessary to achieve the objectives of the Act...

    On February 24, 1993, Plaintiff assessed a civil money penalty under the Act against Respondents in the amount of $4,750. This assessment involved six (6) of Respondent's employees for violations of under age, hours and record-keeping deficiencies for the period May, 1990 to June, 1992 (ALJ 1). Respondents timely filed a request for hearing on March 12, 1993 (ALJ 1).

    Wage and Hour Investigator Rhonda Berrien as well as Dr. William Sutlive and Scott Sutlive, owners of Respondent, testified at the hearing.

    Respondents did not present any evidence to suggest that there did not exist a violation of the Act in terms of the employment of minors during Act-prohibited hours, and failure to obtain Act-required birth records. (See Tr. 11; 46; ALJ 3)¹ Accordingly, I find that violations of the Act as found by Plaintiff occurred.

    Investigator Berrien, however, did admit that had she known employee Johnson worked only two (2) hours with Respondent (Tr. 35, 43-45), no fine would have been assessed in this regard (Tr. 66). Thus, $900 of the subject assessment² is found to be not appropriate.

    Further, Investigator Berrien was unable to justify her conclusion that the job of busboy was "...detrimental to one's health", and admitted such conclusion played a role in the amount of her assessments (Tr. 36-39). Accordingly, the entirety of the fines against employees Anderson and Howard (see P-1 and P-2) cannot be sustained. I find $350 of the Anderson fine and $250 of the Howard fine to be not appropriate.³

    Investigator Berrien testified that she considered, relative to the amount of fines assessed, Respondent's failure to "...take reasonable precautions to avoid [the subject] violations" (Tr. 31). But Scott Sutlive credibly testified without contradiction that a prior manager of Respondents was told by his predecessor that the Georgia State Department of Labor had assured that minors could legally be employed provided parental consent was obtained (Tr. 49-51; ALJ 3). Also, Mr. Sutlive similarly testified that he understood that the school principal's permission (or work permit) sufficed for legal minor employment (Tr. 52-53). Accordingly, I find that Ms. Berrien's conclusion that Respondents failed to take reasonable precautions to avoid violations of the Act to be not entirely valid. Considering also that there is no prior history on Respondents' part of violations of the Act (Tr. 30-31), and that Respondents were not shown to have been uncooperative in the subject investigation, I find that $500 of the assessment is not appropriate.

    In summary, of the total $4,750 assessment, I find $2000 to be not appropriate under the circumstances of this case. The amount of $2,750 of assessments are found to be valid and appropriate.

    Based upon the foregoing, Respondents are ORDERED to pay to Plaintiff the sum of $2,750 in penalty

¹ I also find Respondent's defense of justification considering parental consent, and development of sense of responsibility for the minors (Tr. 46-47), to be without merit as a matter of law.

² $700 - Post-Nov. 1990 - 13 yr. old under age, plus $200 - 13 yr. old with no dates of birth on record (see ALJ 1 - List of Violations).

³ Anderson, Post Nov. 1990, 12 yr. old, under age violation,

Howard, Pre Nov. 1990, 13 yr. old, under age violation

(see ALJ-1 List of Violations).