Maria Echaveste, Administrator, Wage and Hour Division, U.S. Department of Labor v. Q. & D., 92-CLA-21 (Sec'y May 11, 1994)

May 9, 2009

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Maria Echaveste, Administrator, Wage and Hour Division, U.S. Department of Labor v. Q. & D., 92-CLA-21 (Sec'y May 11, 1994)

U.S. DEPARTMENT OF LABOR
SECRETARY OF LABOR
WASHINGTON, D.C.

DATE: May 11, 1994
CASE NO. 92-CLA-21

IN THE MATTER OF

MARIA ECHAVESTE, ADMINISTRATOR,
WAGE AND HOUR DIVISION,¹
PLAINTIFF,

Q. & D. d/b/a LAMPLIGHTER
TAVERN AND JACK QUINN,
RESPONDENTS.

BEFORE: THE SECRETARY OF LABOR

FINAL DECISION AND ORDER

The captioned case has been appealed to me pursuant to the oppressive child labor provision (Section 12) of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 212 (1988), and the implementing regulations. 29 C.F.R. Part 580 (1993). On August 10, 1992, the Administrative Law Judge (ALJ) issued his Decision and Order ("D. and O."), finding that Respondents Lamplighter Tavern and Jack Quinn (collectively referred to as "Lamplighter") violated Section 12 and ordering them to pay a civil money penalty of $4,500.00. D. and O. at 9. Lamplighter filed an appeal with the Office of Administrative Appeals (OAA). Thereafter, the Administrator of the Wage and Hour Division filed a Motion to Dismiss Lamplighter's appeal on the ground that it was filed out of time. Lamplighter opposed that motion. On November 11, 1992, OAA issued an Order Establishing Briefing Schedule. OAA noted that the Motion to Dismiss was pending before the Secretary for decision and set forth a schedule for briefing on the merits. Both parties have filed briefs. I will first deal with the Administrator's procedural challenge to Lamplighter's appeal and then address the merits of the case. The essential facts regarding the filing of Lamplighter's appeal are not in dispute. The ALJ issued his decision on August 10, 1992. Lamplighter's appeal is dated September 7, 1992, but the regular mail envelope in which the notice was sent is postmarked

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"p.m." September 8, 1992. The appeal was marked received by OAA on the morning of September 10, 1992. The procedural rule applicable to this proceeding provides in pertinent part that:

Any party desiring review of a decision of the Administrative Law Judge shall file an appeal with the Secretary. To be effective, such appeal must be received by the Secretary within 30 days of the date of the decision of the Administrative Law Judge. . . . If no timely appeal has been filed, the decision of the Administrative Law Judge shall be deemed the final agency action.

29 C.F.R. § 580.13 (1993). Section 580.14(c) of 29 C.F.R. states that, "[d]ocuments are not deemed filed with the Secretary until actually received by the Secretary either on or before the due date. No additional time shall be added where service of a document requiring action within a prescribed time was made by mail." Emphasis supplied.

The Administrator argues that Lamplighter's appeal was filed one day late, and therefore must be dismissed. Motion to Dismiss at 2. Lamplighter responds that: 1) September 7, 1992, the date upon which Lamplighter's attorney prepared the Notice of Appeal, was Labor Day, and if the postal system had been operating on that date the Notice of Appeal surely would have reached OAA by September 9, the last date for receipt under the rules. Memorandum in Opposition to Motion to Dismiss ("Memorandum") at 2-3; and 2) Although the Notice of Appeal was date stamped by OAA on the morning of September 10, 1992, there is "no way for the Department to ascertain when the Notice of Appeal was received, only when it was time stamped." Memorandum at 2.

Lamplighter's first argument is unpersuasive. Attorneys are constantly being required to file documents with agencies and courts within set time-frames. The fact that a federal holiday, or a Sunday, intervenes is just one of those many details to which attorneys are expected to pay attention. It is also the case that just as Lamplighter asserts that OAA's date stamp is not proof that the appeal was actually received on September 10, the fact that Lamplighter's attorney dated his appeal September is not proof that he actually drafted it and put it in the mail system on that date.

I do find a particle of merit in Lamplighter's second argument, however. We are essentially dealing with an appeal document that was at most a half day late in arriving at OAA. The rule does not specifically state that OAA's date stamp shall be determinative of the time a document was actually received. It is a common practice among members of the local bar to serve time sensitive documents on OAA personally and to ask for a date stamped copy to establish timely filing. Lamplighter's attorney did not have that luxury, as he is located in Havertown, Pennsylvania. Moreover, it cannot be established with certainty that Lamplighter's appeal did not arrive in the offices of OAA until the morning of September 10. I am reluctant to deny appeal rights to a party under these very unusual circumstances, especially when no prejudice to the Administrator has been shown. Therefore, I decline to dismiss the appeal as untimely filed. However, this should not be read as an invitation to flout the time period established in 29 C.F.R. § 580.14(c) (1993). My decision in this regard is dictated by the facts peculiar to this case.

With regard to the merits, I conclude that Lamplighter violated the oppressive child labor provision of the FLSA, and that the penalty assessed by the ALJ is appropriate.

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a. Violations.

Lamplighter was charged with violating Section 12 of the FLSA, 29 U.S.C. § 212 (1988), and its implementing regulations, 29 C.F.R. Part 570 (1993), by employing four underage children, by employing them past the hours permitted by regulation, and by failing to maintain date of birth records for these employees who were under the age of 19. Order of Reference, Administrative Law Judge Exhibit ("ALJ-") 1. The ALJ held a hearing, at which three of the four children involved, the Wage and Hour Investigator, and Jack Quinn testified. The ALJ concluded that the four children--Jillian Hines (age 13), Karl Baur (age 13), Joyce Roberts (age 13), and Andrea Geary (age 12)--had been employed by Lamplighter at a time when they were under 14 years of age in violation of Section 12. D. and O. at 5. The ALJ also found that Baur, Roberts, and Geary were employed beyond 7:00 p.m. during the school year and/or beyond 9:00 p.m. during the summer in violation of 29 C.F.R. § 570.35 (1993).² The ALJ found that testimony by Hines regarding the evening hours in which she worked was not reliable, and therefore concluded that the Administrator had not established that Lamplighter had violated the work hours rule with regard to her. Finally, the ALJ concluded that with regard to all four children, Lamplighter had failed to maintain date of birth records required by 29 C.F.R. § 516.2 (1993).

Lamplighter challenges the ALJ's findings of fact. For the reasons that follow I conclude that the findings of fact critical to the conclusion that each of the violations occurred clearly are supported by the evidence in the record and therefore do not warrant modification. I will review the evidence and the ALJ's findings with regard to each child in turn.

Karl Baur.

Mr. Quinn admitted that Karl Baur worked for Lamplighter. Transcript ("T.") 57. It is undisputed that Baur was under theage of 14 at the time. See T. 23, 46. Baur testified, without contradiction, that he worked as a dishwasher as late as 10:30 or ll:00 at night. T. 24.³ Finally, Lamplighter admitted that it had failed to maintain date of birth records for Baur. Government Exhibit ("GX-") 1; T. 59.

Joyce Roberts.

Mr. Quinn admitted that Joyce Roberts worked for Lamplighter. T. 57-58. It is undisputed that Roberts was 13 at Roberts testified, and the ALJ found, that she worked later than 9:00 p.m. during the school year. D. and O. at 6; T. 18.⁴ Lamplighter admitted that it failed to maintain employment records regarding Joyce Roberts. GX-1.

Jillian Hines.

Hines testified that she worked for Lamplighter sometime in 1989, when she was 12 years old. Although Hines' testimony is not a model of clarity, it appears that she worked two nights "[a]t the most." T. 15. Quinn denied that Hines had ever worked for Lamplighter. However, the ALJ found Hines' testimony more credible, at least with regard to the fact of employment.⁵

On appeal Lamplighter argues that Quinn's testimony is "more credible and must be given greater weight than the inconsistent and irreconcilable statements of Hines and Geary . . . ." Brief at 8. Lamplighter does not take account of the established legal principle that the fact-finder's credibility determinations are to be given great deference,

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particularly where the trier of fact has had the opportunity to observe variations in demeanor and tone of voice. See, e.g. Rule 52(a), Federal Rules of Civil Procedure. I find no reason to overturn the ALJ's credibility findings regarding Hines. They appear well grounded in the record and in logic. The ALJ could think of no reason (and none was presented) why Hines would lie about working at Lamplighter. D. and O. at 5. The ALJ implicitly found Quinn's testimony to the contrary incredible. Id. Quinn failed to produce any employment records. Such records might have lended inferentialsupport to Quinn's claims if they had shown that Baur and Roberts worked for Lamplighter and didn't mention Hines (or Geary, see below). Quinn's failure to produce such records lends support to the ALJ's credibility determination.⁶

Andrea Geary.

Quinn denied that Geary had ever worked for Lamplighter. T. 57, 58, 60. However Wage and Hour investigator Price testified that Geary had told him that she had worked at Lamplighter for one month in the fall of 1989, when she was 13. T. 31-32. She told Price that she had worked as a bus person and had worked at least one weekend night each week until as late as approximately 10:00 p.m. T. 32. The ALJ found Price's testimony regarding Geary credible, and implicitly found Quinn's testimony incredible. D. and O. at 5. Although we do not have Geary's direct testimony, and the ALJ therefore could not evaluate her credibility as a witness, I find no reason to overturn the ALJ's credibility findings regarding Quinn. Quinn did not present himself as either reliable or candid (see below). In the absence of a credible denial that Geary worked for Lamplighter, Wage and Hour Investigator Price's testimony was given appropriate credence by the ALJ.⁷

For the reasons stated above, I affirm the ALJ's findings of fact regarding the four children. I conclude that Lamplighter violated the age and records of employment provisions of Section 12 of the FLSA and its implementing regulations with regard to all four children, and the hours of employment requirements contained in 29 C.F.R. § 750.35(a)(6) (1993) with regard to minors Baur, Roberts, and Geary.

b. Penalty

Lamplighter argues that the ALJ assessed inappropriate penalties because he failed to apply the criteria contained in 29 C.F.R. § 579.5 (1993). Brief at 11-18. As I concur with the ALJ's determination of penalty, I affirm that part of his decision as well.

Lamplighter recognizes that the Department of Labor regulations grant the Department broad discretion when assessing penalties. See Br. at 11. It argues that the ALJ abused that discretion because he "did not adequately consider . . . whether the violation was de minimus [sic] and assurance of future compliance, in their entirety." Brief at 12. Lamplighter misapprehends the clear meaning of the penalty provisions of 29 C.F.R. § 579.5 (1993). Those provisions state in pertinent part:

(a) The administrative determination of the amount of the civil penalty . . . 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

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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 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 other 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 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.

(d) Based on all 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 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 a civil penalty in the circumstances is necessary to achieve the objectives of the Act.

29 C.F.R. § 579.5.⁸

Lamplighter admits that the ALJ considered the size of the business and the gravity of the violations in reaching his conclusion regarding penalties. Brief at 12. Although Lamplighter argues that the "alleged" violations "were not of such gravity as to warrant the imposition of civil penalties," Brief at 13, it fails to account for many of the factors enumerated in the gravity provision of Section 579.5. Thus, Lamplighter fails to discuss "willfulness or failure to take reasonable precautions to avoid violations. . . ." 29 C.F.R. § 579.5(c) (1993).

In fact, although Mr. Quinn testified that he did not know that he was required to determine the ages of his minor employees, T. 59, and apparently did not know what the other child labor regulations required, his major concern when Wage and Hour Investigator Price notified him of the violations was who had "turned him in." T. 35; D. and O. at 8. Quinn also was nonchalant regarding the employment of minors. Thus, he testified with regard to Baur: "The parents brought him up. And when parents condone it, I figure it is okay." T. 59. When asked if he had asked for Robert's birth certificate, Quinn testified:

No, because the father brought her up and I assumed --I mean when that kid walks in the door, you think she is 17-years-old. She is six-foot tall, and the father brings her up there; what are you going to do?

T. 60. Of course the fact that Quinn might have thought Roberts was 17 misses the point, as the regulations require that employers maintain date of birth records for any employee under the age of 19. 29 C.F.R. § 516.2(a)(3) (1993). Thus Quinn's testimony establishes conclusively that Lamplighter either was willful or failed to take reasonable precautions to avoid the records violations.

In contrast to Lamplighter's incomplete reference to the factors to be considered when determining the gravity of the violation, the ALJ performed a systematic analysis, taking all factors into account and weighing them. See D. and O. at 7-8. That is precisely what the fact finder is required to do, and I find no error in the ALJ's analysis of the gravity of the violations in this case.

Next Lamplighter argues that it should be entitled to application of the de minimis exemption contained in 29 C.F.R. § 579.5(d)(1) (1993). The ALJ found that exemption inapplicable to the facts presented in this case, and I concur. First, application of the exemption is required to be "[b]iased on all the evidence available, including the investigation history of the person . . . charged and the degree of willfulness involved in the violation . . . ." 29 C.F.R. § 579.5(d). The investigation history of this case is one of non-cooperation and general evasiveness. Thus, Quinn and his accountant repeatedly promised information which they never produced. D. and O. at 4, 7.

In addition it is apparent from the record of this case that Lamplighter had a reckless disregard for the requirements of the child labor laws. Quinn felt that his responsibility ended if the parents of minors condoned their working in his establishment. See p.11, above. Thus, Lamplighter approaches the de minimis provision of Section 579.5 with two strikes against it.

Even if Lamplighter were to pass these two introductory hurdles, however, its claim to the exemption contained in Section 579.5(d)(1) would fail. Although there is not instructive case law on the reach of the term de minimis as used in this section, the violations in this case clearly do not qualify. Here we have multiple violations regarding each child: age, records, and hours violations with regard to three of the four children; age and records violations regarding the fourth child. I agree with the ALJ that these are not de minimis violations. Second, Lamplighter has not given credible assurance of future compliance. Lamplighter's attorney has,⁹ but given Mr. Quinn's obdurate attitude toward the child labor provisions of the Act it is not a foregone conclusion that Lamplighter will, in fact, carry out the commitment that its attorney has made in its name.

I also conclude that in this case a penalty is necessary to achieve the objectives of the Act. Again, Mr. Quinn presented himself as a willfully ignorant employer, who did not particularly care what the law required and turned a blind eye to violations that were being committed in his establishment. A penalty of the size ordered by the ALJ will help to assure that Mr. Quinn keeps the promises which Lamplighter's attorney has made.

Finally, Lamplighter is not entitled to the exemption contained in section 579.5(d)(2) because, in addition to the reasons detailed above, the violations were not "inadvertent," which means "due to oversight" or "unintentional." Webster's New World Dictionary, Third College Edition at 680. Mr. Quinn testified that he thought Baur was fifteen and that Roberts was 17. These were errors of fact which could have been discovered with ease, and were irrelevant to the records requirement violations and the hours violations regarding Baur in any event. As I pointed out above, the records regulation requires that employers maintain date of birth records for children under the age of 19. The hours provisions apply to children under the age of 16. Mr. Quinn intended to employ the minors in question, and failed to make any attempt to assure that he was complying with applicable law in doing so. That is not "inadvertent" behavior.

For the foregoing reasons I conclude that the penalties assessed are appropriate. The ALJ's decision is AFFIRMED, and the Respondents are ordered to pay $4,500.00 in civil penalties.

SO ORDERED.

Robert Reich
Secretary of Labor

Washington, D.C.

[ENDNOTES]

¹The case caption is hereby corrected pursuant to 29 C.F.R. § 580.10 (1993).

²Of course the hours requirements are applicable to children under 16, not just to children such as these who were under 14. See 29 C.F.R. § 570.34 (1993).

³Lamplighter argues that there is a conflict in the evidence because Baur testified that he had worked for Lamplighter "probably around October to a little in December" (T. 23) and as late as 10:30 or 11:00 at night (T. 24), whereas the "Notice to Employer" contained in ALJ-1, stated that Baur worked from "9/89-present" (i.e. March, 1990), and that he worked "as late as 11:30 p.m." The ALJ correctly disregarded these discrepancies. D. and O. at 5-6. Whether Baur worked until 10:00 or 11:30 is irrelevant, as working on any day of the year after 9:00 p.m. constitutes a violation of the hours requirements. 29 C.F.R. § 57035(a)(6) (1993). Moreover, as I discuss in greater detail below, it was Lamplighter which failed to produce any employment records. Respondent therefore lacks standing to complain about the details of the dates upon which Baur worked.

⁴Again, the fact that there are discrepancies between the hours of the day noted by the Wage and Hour investigator and Roberts is irrelevant, because the times indicated by both were after 9:00 p.m. See ALJ-1; D. and O. at 6; T. 18.

⁵The ALJ found that Hines' testimony regarding hours of work was tentative and unreliable. He therefore concluded that the penalty assessed based on Hines' work hours was not warranted. D. and O. at 6. That finding is supported by substantial evidence in the record.

⁶As noted above Lamplighter admitted failing to maintain date of birth records.

⁷Again, having found that Geary worked for Lamplighter, the ALJ correctly applied to Geary Lamplighter's admission that it had not maintained date of birth records.

⁸Lamplighter's expurgated version of these provisions, contained in its brief at pp. 11-12, seriously distorts the evaluative process which is to take place in determining whether a penalty shall be assessed, and if so the size of that penalty.

⁹See Letters from John L. Shearborn to Administrator, Wage and Hour Division, dated May 9, 1991 and April 11, 1990, attached to ALJ-1.