DATE: February 21, 1996
CASE NO. 92-CLA-13
IN THE MATTER OF
MARIA ECHAVESTE, ADMINISTRATOR,
WAGE AND HOUR DIVISION,
UNITED STATES DEPARTMENT OF LABOR,
PLAINTIFF,
v.
NAVAJO MANUFACTURING,
RESPONDENT.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
This case arises under the child labor provisions (Section
12) of the Fair Labor Standards Act of 1938, as amended, (FLSA or
the Act) 29 U.S.C. § 212 (1988) and its implementing
regulations at 29 C.F.R. Parts 570, 575, 579, and 580 (1994).
The case is before me for final review of an April 19, 1994
Decision and Order (D. and O.) of the Administrative Law Judge
(ALJ) that vacated $2,600 in civil money penalties (cmp's)
assessed against Respondent (Navajo) by the Wage and Hour
Division Administrator (Administrator) for alleged violations of 29 C.F.R. §§
211 and 212 and 29 C.F.R. Parts 579 and 580.[1]
The Administrator has appealed the D. and O. and seeks a
total restoration of the vacated cmp's. For the reasons set
forth below, that portion of the ALJ's decision which vacated the
penalty assessed by the Administrator is reversed. The total
amount of the penalty is reduced by seventy five percent.
BACKGROUND
[PAGE 2]
Navajo is a wholesale distributor of general merchandise
(such as sunglasses and silk flowers), D. and O. at 2, primarily
to 7-11 chain stores. Navajo s employees, including the five
underaged minors involved in the violations, process goods for
shipment. This work involves the packing, repacking and labeling
(application of bar codes and price stickers to the repackaged
goods) merchandise. Id.
The facts as found by the ALJ, D. and O. at 2-3, are mostly
uncontroverted. The issue is squarely one of statutory and
regulatory interpretation. In this regard, Section 16(e) of the
FLSA provides that any person who violates the provisions of
Section 212 shall be subject to a civil money penalty for each
violation. 29 U.S.C. § 216(e). The DOL regulations provide,
at 29 C.F.R. § 579.5(a), that the determination concerning the
amount of the penalty shall take into consideration the size of
the business and the gravity of the violation. 29 U.S.C. §
216(e) (1988).
The regulation at 29 C.F.R. § 579.5, concerns the
entire assessment scheme, including both the amount of an
assessment and its appropriateness. It reads as follows:
(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 persons charged and the gravity of the
violation as provided in paragraphs (b) through (d) of
this section.
Paragraphs (b) through (d) provide as follows:
(b) in determining the amount of such penalty there
shall be considered the appropriateness of such penalty
to the size of the business . . . taking into account
the number of employees employed . . . dollar volume of
sales or business done, amount of capital investment
and financial resources . . .
(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; 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
[PAGE 3]
minors were so employed; 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 . . . 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.
ANALYSIS AND CONCLUSIONS
The four 14 year-old and one 13 year-old minors in question
were hired by Navajo at the behest of their parents (who were
simultaneously employed by Navajo), and were employed for periods
ranging from two (2) days to one month during the Christmas,
spring and summer school breaks. D. and O. at 2. It is
uncontested, and thus taken as fact, that none of the minors
involved herein were injured during the period of time they
worked for Navajo; that Navajo has no prior history of non-
compliance with the FLSA; that Navajo cooperated in the
investigation of this matter (including its decision to terminate
the minors' employment upon being notified of the violations);
and that Navajo made a credible assurance that it would comply in
the future with the provisions of the Act. D. and O. at 2-3.
While the parties agree with the basic facts as set forth
above, they disagree as to how these facts should have been
interpreted and analyzed, under the governing regulations, by the
relevant Agency enforcement personnel and the ALJ. Central to
the Administrator's position that the cmp's should be completely
reinstated is her contention that, "[t]he regulations . . . do
not contemplate an 'in depth' consideration of each violation in
the manner suggested by the ALJ (at D. and O. p.6); they permit
the fact of violation to merit a penalty, and then permit the
[PAGE 4]
penalty to be mitigated . . . ." Id.
On the other hand, the record supports the ALJ's assertion
that some type of critical analysis is required by those
who assess the penalties as well as those whose job it is to
review the assessor's work. Indeed, there would be no need for a
mitigating scheme, as set forth in § 579.5, if the
mitigating factors were not to be conscientiously considered.
After weighing all of the evidence, including the testimony
of the Agency s primary assessors -- compliance officer Crosby
and Wage and Hour District Director Hill, the ALJ found that when
considered as a whole, and in particular under the mitigating
provision of § 579.5(d), the particular facts of this case
warrant a finding that the violations were de minimis in
nature. D. and O. at 8. I find the ALJ s conclusion that,
[b]ased on the specific wording of subsection (1), . . . the
assessment of a civil money penalty is not mandatory merely
because there has been single or multiple violations, D. and O.
at 8, to be contrary to the legislative intent of the FLSA.
Congress previously amended the child labor enforcement
provisions of the FLSA in an effort to strengthen and provide
vigorous enforcement of the child labor restrictions.
See the Statement of the Administrator (SA) at 9, citing
S.Rep. 300, 93 Con., 1st Sess. 31 (1974).
The real dispute in this case is about the amount of
analysis or, in the ALJ s words, conscientious consideration,
which is to be expected of those Departmental officials who
determine and review cmp assessments. In this regard, I accept
the ALJ s conclusion that the analysis which preceded the initial
assessment and accompanied the review of that assessment in this
case was lacking, i.e. too perfunctory to meet the
regulatory requirement, as well as the previously enunciated
standard that all of the specified elements [of 29 C.F.R.
§ 579.5] must be considered in assessing the penalty.
United States Department of Labor v. Supermarkets Gen.
Corp., Case No. 90-CLA-34, Sec. Dec. issued Jan. 13, 1993,
slip op. at 4 (emphasis supplied).
I agree with the Administrator that, in many respects, and
in particular with the emphasis on the nature of the work
performed by the minors here, the ALJ s analysis went beyond what
was required by regulation and substituted the ALJ s own
standards for those mandated by § 579.5. In this regard, I
find it dispositive that there were actual violations involving
underaged children working in a warehouse -- a working practice
and a working environment that the Secretary of Labor has
determined to be unacceptably hazardous. 29 C.F.R.
§§ 570.34(b)(9) and 29 C.F.R. § 570.35.
The two central findings are that: (1) there are actual
violations which merit a penalty and (2) the analysis of the
[PAGE 5]
penalty amount was not carried out consistently with the
mitigating factors set forth at § 579.5. The reinstatement
of the vacated penalties, is appropriate, but I also recognize
that, in the circumstances which the violations here took place,
a reduced penalty will not jeopardize the Administrator s
position regarding the application of cmp s. Cf.
Administrator v. D. D. and D. Inc. D/B/A Sizzler Family
Steakhouse, Case No. 90-CLA-35, Sec. Dec. issued April 3,
1995. I will therefore reduce each individual assessment 75%.
Accordingly, IT IS ORDERED that Respondent pay a civil money
penalty in the amount of $650.00 to the United States Department
of Labor.
SO ORDERED.
_______________________
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1]
The specific violations charged are: the illegal employment of
a minor under age 13 (,000) and, with respect to the four 14
year old minors, the illegal employment of a minor in a specific
occupation (an occupation in connection with warehousing and
storage -- Child Labor Reg. 3, 29 C.F.R. § 570.33 (f)(2)) at
$400 per violation. The total amount assessed was, thus,
$2600.00.
