USDOL v. House of Fabrics, 94-FLS-34 (ALJ Jan. 17,
1996)
U.S. Department of Labor Office of Administrative Law Judges
501 W. Ocean Boulevard, Suite 4300
Long Beach, California 90802
(310) 980-3594
(310) 980-3596
FAX (310) 980-3597
DATE: January 17, 1996
CASE NO.: 94-FLS-00034
In the Matter of
MARIA ECHAVESTE, ADMINISTRATOR,
WAGE AND HOUR DIVISION, USDOL,
Plaintiff,
v.
HOUSE OF FABRICS, d/b/a
SO-FRO FABRICS,
Respondents.
DECISION AND ORDER BASED UPON CONSENT
FINDINGS
This matter arises under Section 16(e) of the Fair Labor Standards
Act of 1938 (the "FLSA" or "Act"), as amended, 29 U.S.C.
§ 216(e), and in accordance with 29 C.F.R. Part 580. This matter is referred for
a determination of whether Respondents have committed violations of Section 12 of the
Act and the appropriateness of the penalties assessed by the Administrator.
Procedural History
Pursuant to a letter dated November 22, 1993, Plaintiff assessed
a civil money penalty against Respondents in the amount of $4,000.00 for violations of
the FLSA. By letter dated December 6, 1993, Respondents filed their Exceptions to
Assessment and a Request for Hearing in accordance with the applicable regulations.
The matter was thereafter referred to the Office of Administrative Law Judges on
September 16, 1994.
On March 30, 1995, the undersigned notified the parties that this
matter would be called for a telephonic prehearing conference on April 19, 1995, and
that a formal hearing would be held on May 10, 1995.
By way of letter dated April 6, 1995, addressed to the Plaintiff,
and received in this office via facsimile on April 19, 1995, counsel for Respondents
notified Plaintiff that Respondents had filed Chapter 11 petitions under the Bankruptcy
code. 11 U.S.C. § 101 et seq. As such, counsel noted that "all
entities are stayed from commencing or continuing any judicial, administrative or other
action or proceeding against House of Fabrics, Inc., or Sofro Fabrics, Inc., that could
have been commenced before November 2, 1994, pursuant to Bankruptcy Code §
362(a)(1), 11 U.S.C. § 362(a)(1)." As such, counsel requested that the
hearing in this matter be "dismissed."
Via a telephone conversation with this office on May 5, 1995,
counsel for Plaintiff notified the undersigned that the parties had reached a settlement
in this matter. Based thereon, the formal hearing scheduled for May 10, 1995, was
removed from calendar. On May 26, 1995, the undersigned received the Consent
Findings executed by counsel for both parties.
Consent Findings
The consent findings submitted by the parties provide:
1. By notice dated November 22, 1993, pursuant to Section
16(e) of the FLSA, civil penalties in the amount of $4,000.00 were assessed by Plaintiff
against Respondents as a result of the employment of several minors in violation of the
child labor provisions of Section 12 of the FLSA;
2. By letter dated December 6, 1993, Respondents filed a
timely exception to the assessed penalties;
3. Subsequent to the filing of the exception, this matter was
referred to the Office of Administrative Law Judges;
4. Plaintiff alleges and Respondents admit that at all times
pertinent hereto, Respondents have been engaged in commerce or in the production of
goods for commerce within the meaning of Sections 3(r) and 3(s) of the FLSA;
5. Respondents certify that they are presently in compliance
with the provisions of Section 12 of the FLSA, and further state that they will continue
in compliance therewith;
6. Upon reconsideration of the amount of penalties assessed
for employment of several minors in this case, Plaintiff hereby modifies the letter
assessing the penalties of $4,000.00 by reducing the assessment of civil money
penalties to $2,000.00;
7. Respondents agree that said amended penalties shall be the
final determination of the Secretary;
8. Because Respondents are undergoing Chapter 11
bankruptcy, they agree to seek approval for this settlement before the bankruptcy court.
Upon execution of these Consent Findings and approval by the bankruptcy court, Plaintiff
shall have an allowed, unsecured creditor's claim against Respondents in the amount of
$2,000.00;
9. The entire record upon which the Consent Findings and
Order are based consists solely of the letter assessing the penalties, as modified herein,
the Order of Reference, and these Consent Findings;
10. All further procedural steps before the Office of
Administrative Law Judges, and any rights to challenge or contest the validity of these
Consent Findings or any Order issued pursuant thereto are waived by the parties;
11. Each party agrees to bear its own fees, costs, and other
expenses incurred by such party in connection with any stage of this proceeding;
12. The parties agree that the Order in this case shall have the
same force and effect as an order made after full hearing.
The undersigned finds that the above consent findings are
reasonable, and comply with the requirements of 29 C.F.R. § 18.9. Therefore,
the undersigned adopts these consent findings as findings of fact and conclusions of
law.
Order of the Bankruptcy Court
As provided for in the consent finding identified numerically above
as number eight (8), Respondents filed a "Motion to Approve Compromise With
United States Department of Labor" with the United States Bankruptcy Court for
the Central District of California. The bankruptcy court issued its "Order Approving
Compromise with United States Department of Labor" on August 10, 1995.
ORDER
IT IS HEREBY ORDERED that:
1. Respondents shall pay to Plaintiff the sum of $2,000.00,
said sum representing civil money penalties for Respondents' violations of the Fair Labor
Standards Act;
2. As Respondents have filed for Chapter 11 bankruptcy
protection, and in accordance with the Order of the United States Bankruptcy Court for
the Central District of California, Plaintiff shall have an allowed, unsecured creditor's
claim against Respondents in the amount found to be due and owing herein.
Entered this 17th day of January, 1996, at Long Beach, California.