Date: May 9, 1995
Case No. 92-CLA-69
In the Matter of
ROBERT REICH, Secretary of Labor,
United States Department of Labor,
Plaintiff,
v.
CANADIAN LAKES DEVELOPMENT COMPANY,
A Michigan Corporation,
Defendant.
APPEARANCES:
Karen L. Mansfield, Esq.
U.S. Department of Labor
230 S. Dearborn St., 8th Floor
Chicago, Illinois 60604
For the Plaintiff
Robert D. Stanton, Esq.
P.O. Box 811
Big Rapids, Michigan 49307
For the Defendant
BEFORE: DANIEL J. ROKETENETZ
Administrative Law Judge
DECISION AND ORDER
This case arises under the Fair Labor Standards Act of
1938, as amended, 29 U.S.C. § 201 et seq., (hereinafter
referred to as "the Act") and the regulations promulgated thereun-
der at 29 C.F.R. Parts 570 and 579. On February 7, 1991, pursuant
to Section 16(e) of the Act, the Deputy Regional Administrator,
Employment Standards
[PAGE 2]
Administration, Wage and Hour Division, United States Department of
Labor imposed a civil money penalty in the amount of $4,150.00
against the Defendant as a result of the employment of eight
minors in violation of the child labor provisions of Section 12 of
the Act and regulations issued thereunder. 29 U.S.C. § 216(e).
Defendant timely filed a request for a hearing to contest the
propriety of the civil money penalty issued by the Plaintiff and
for a re-determination of such penalty.
A formal hearing was held on February 18, 1993 in Grand
Rapids, Michigan with both parties being afforded full opportunity
to present evidence. The parties also submitted post-hearing
briefs.
ISSUE
The sole issue in this case is:
1. The determination of the civil money penalty, if
necessary, against the Defendant for its admitted violations of the
child labor provisions of the Act.
STIPULATIONS
The parties have stipulated to various facts (JX 1)[1] ,
including, but not limited, to the following:
1. Defendant employed eight minors whose work, from time to
time, exceeded limitations set forth in the child labor provisions
of the Act. (JX 1, stip. 19)
2. Eight (8) minors were employed by the Defendant in
violation of the child labor provisions of the Act between May 1,
1989 and November 30, 1990. (JX 1, stip. 9-10)
3. The above-mentioned minors were: Holly Beemer, Joe
Donley, Tom Lytle, Jody Newcombe, Don Rankin, Marc Rankin, Jon
Streeter and Kasey Thren. (JX 1, stip. 10)
4. The employment of such minors resulted in the Plaintiff
alleging nine violations of the Act by the Defendant.
Based upon my observation of the appearance and the demeanor
of the witnesses who testified at the hearing and upon a thorough
analysis of the entire record in this case, with due consideration
accorded to the arguments of the parties, applicable statutory
provisions, regulations, and relevant case law, I hereby make the
following:
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FINDINGS OF FACT
The Defendant is a land development corporation which owns and
manages a recreational and resort residential development in
Mecosta, Michigan. (JX 1, stip. 1 & 3) The annual volume of the
Defendant's business in 1989 approximated .4 million. (Tr. 84-85)
The property in Mecosta consists of numerous single-family homes,
three golf courses, two swimming pools and a restaurant. (JX 1,
stip. 4) Defendant employs approximately 25 full-time employees
year-round, and hires approximately 65 additional employees during
the Summer to help operate and maintain the recreational facilities
and the restaurant. (JX 1, stip. 5, 6, 7, 8) Since 1962, the
Defendant has employed over 1,000 high school and college students.
(Tr. 69) Prior to the matter at hand, Defendant did not have any
child labor violations cited by the Department of Labor. (Tr. 71)
During the period from May 1, 1989 through November 30, 1990, the
Defendant employed various high school students including: Holly
Beemer, Joe Donley, Tom Lytle, Jody Newcombe, Don Rankin, Marc
Rankin, Jon Streeter and Kasey Thren. (JX 1, stip. 9 & 10)
Holly Beemer (DOB 5/14/75) worked for the Defendant in June,
July and August of 1989 and from May through October, 1990. At the
commencement of her employment with the Defendant, Beemer was 14
years old . Beemer worked in the restaurant as a busgirl and dish-
washer, and worked past 9:00 p.m. during the Summer on nineteen
(19) occasions. On at least one occasion, Beemer worked 16 hours
in one day and over 40 hours in one week. During the school year,
i.e., before June 1 or after September 3, 1990, Beemer
worked past 7:00 p.m. on sixteen (16) occasions and worked in
excess of three hours per day on three (3) occasions. (JX 1, stip.
11)
Joe Donley (DOB 6/2/74) worked for the Defendant from June
until October, 1990. At the commencement of his employment with
the Defendant, Donley was 17 years old. Donley worked on
maintenance of the golf course. As part of his job, Donley hauled
a lawnmower from the storage building to the golf course in a
pickup truck on public roads. Donley drove the truck on these
public roads at least once per week during the duration of his
employment with the Defendant. Donley also worked in excess of 40
hours per week on multiple occasions. (JX 1, stip. 12)
Tom Lytle (DOB 2/7/73) was employed by the Defendant from June
through September, 1990. At the commencement of his employment
with the Defendant, Lytle was 17 years old. As part of his job,
Lytle drove a pickup truck on public roads, delivering supplies,
once or twice per week. On at least one occasion, Lytle worked in
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excess of 40 hours in one week. (JX 1, stip. 13)
Jody Newcombe (DOB 9/7/74) worked for the Defendant from May
until September, 1990. At the commencement of her employment with
the Defendant, Newcombe was 15 years old. On six (6) occasions
during the school year, she worked past 7:00 p.m., and on three (3)
occasions during the same period, she worked in excess of 3 hours
per day. On 23 occasions during the Summer, Newcombe worked later
than 9:00 p.m. (JX 1, stip. 14)
Don Rankin (DOB 7/3/73) was employed by the Defendant from
May, 1989 until November, 1990. At the commencement of his
employment with the Defendant, D. Rankin was 15 years old. Don
worked in the golf course pro shop where he maintained the shop,
collected fees from golfers, and sold golf merchandise. At age
17, Rankin drove his own car to transport merchandise from one shop
to another and also to deliver documents. In the Summer of 1990,
Rankin drove on public roads at least once per week as part of his
employment. Also, he worked between two and four days per week and
ten to fourteen hours each work day. (JX 1, stip. 15)
Marc Rankin (DOB 7/28/75) worked for the Defendant from June,
1989 until November, 1990. At the commencement of his employment
with the Defendant, he was 14 years old. In the Summer of 1990,
his job entailed cleaning the pro shop, parking and refueling golf
carts, helping customers, and answering telephones. Marc worked
fourteen hours per week on two or three days. Prior to June 1,
Marc worked past 7:00 p.m. on two (2) occasions and in the Summer,
he worked past 9:00 p.m. on two (2) other occasions. Also, Marc
worked more than eight hours per day on eighteen (18) occasions.
Finally, on at least two (2) occasions, Marc drove golf carts
across public roads. (JX 1, stip. 16)
Jon Streeter (DOB 8/3/74) was employed by the Defendant from
May through December, 1990. At the commencement of his employment
with the Defendant, he was 15 years old. Streeter worked as a pro
shop attendant and often worked over 40 hours per week. In the
Summer of 1990, Streeter worked in excess of eight hours per day on
eight (8) occasions and past 9:00 p.m. on four (4) occasions. At
the age of 16, Streeter drove his own car at work, helping prepare
for a golf tournament. He also drove on public roads at least once
per week in the Summer of 1990, transporting documents and
merchandise among shops. (JX 1, stip. 17)
Kasey Thren (DOB 4/6/74) worked for the Defendant from May
through August, 1990. At the commencement of his employment with
the Defendant, Thren was 16 years old. As part of his job, Thren
[PAGE 5]
drove a pickup truck on public roads at least once per week
throughout the duration of his employment.
As a result of the Defendant's practices in his employment of
the individuals discussed above, the Defendant was cited with nine
violations of the child labor provisions of the Act. Additionally,
a civil money penalty in the amount of $4,150.00 was assessed
against the Defendant.
CONCLUSIONS OF LAW
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).
Likewise, 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 . . . 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 to be particularly hazard-
ous for the employment of children between such ages or
detrimental to their health and well-being.
29 C.F.R. § 570.117(a). The Secretary has, by regulation,
proscribed minors either 16 or 17 years of age from operating a
motor vehicle as part of their employment. 29 C.F.R. § 570.52.
Additionally, the Secretary has, also by regulation, prohibited the
employment of minors under age 16 from working in excess of three
hours per day and eighteen hours per week when school is in
session, and in excess of eight hours per day and forty hours per
week during the Summer. 29 C.F.R. § 570.119(f). Also,
employees under age 16 may not work later than 7:00 p.m. during the
school year or later than 9:00 p.m. during the Summer. Id.
The parties stipulated that the Defendant committed nine
violations of the child labor provisions of the Act in regard to
the employment of the eight above-mentioned individuals. (JX 1,
stip. 19) Such violations include five instances of employees
under age 18 operating a motor vehicle as part of their employment,
as well as four instances of employees under age 16 working in
excess of the hour and time limitations detailed in the Act.
Because the parties have stipulated to the violations, I will focus
on the imposition of the civil money penalty on the Defendant.
Regulations issued under the Act provide that penalties "may
[PAGE 6]
be imposed" for violations of the Act unless the employment of the
minors falls within one of the Act's specific exceptions. 29 C.F.R
§ 579.3(a) The Defendant has stipulated to its violation of
the Act regarding its employment practices of the eight aforemen-
tioned individuals, and thereby does not allege that its actions
fall within one or more of the Act's exceptions.[2] Rather, the
Defendant simply contests the issuance and the amount of the civil
money penalty assessed because of such violations. The Defendant
alleges that the violations were only "technical violations" and
de minimis, and that the regulations point to the conclusion
that a civil money penalty is not necessary to correct the
violations and thus achieve the Act's objectives. Conversely, the
Plaintiff contends that the $4,150.00 penalty assessed against the
Defendant was the "lowest possible penalty" and that such penalty
is appropriate considering the regulatory factors and facts of this
case. (Tr. 7, 20, 25; Plaintiff's Post-Hearing Brief, at 6)
The regulations promulgated at 29 C.F.R. § 579.5
enumerate the factors that must be taken into consideration in the
assessment of child labor civil money penalties. The factors
listed under subsection (b) include the violator's:
business size
number of employees
dollar volume of sales
amount of capital investment resources
financial resources
The factors listed under subsection (c) include:
the gravity of the violation
history of prior violations
evidence of willfulness or failure to take reasonable
precautions to avoid violations
number of minors illegally employed
ages of minors so employed
occupations in which the minors were employed
exposure of minors to hazards
any resultant injury to minors
duration of illegal employment
hours of the day of the illegal employment
whether such employment was during or outside school hours
Furthermore, subsection (d) requires examination of:
(1) Whether the evidence shows that the violation is "de
minimis" and that the person so charged has given
[PAGE 7]
credible assurance of future compliance, and whether such a penalty
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.
Based upon the language contained in the applicable regula-
tions, the Plaintiff is erroneous in its contention that the lowest
possible penalty was assessed against the Defendant. As the
regulations contain language indicating that penalties "may" be
assessed, the clear intention of Congress is that civil money
penalties are not mandatory for all violations. Thus, the "lowest
possible penalty" would be no penalty at all. This is not to say
that the Department was erroneous in its computation of the $4,150
penalty, only in its contention that a penalty in at least that
amount must be assessed.[3]
The Defendant presented evidence, in the form of testimony
from employees and their parents, concerning the employment of
minors at Canadian Lakes. The overwhelming weight of the evidence
indicated that minors and their parents in the Defendant's
community appreciated and enjoyed the jobs offered to high school
age students by the Defendant. All witnesses were unanimous in
their support of the Defendant's business and its employment of
minors. The evidence indicated that none of the child labor
violations were intentional or heedless. In fact, concerning the
time and hour violations, the evidence indicated that the viola-
tions occurred not through the scheduling of the employer, but
rather because of the employees' requests for extra work or certain
days off. The Defendant's only fault concerning these violations
was allowing his underaged employees to violate the time and hour
limitations so that they could either earn extra money or be
excused from work during certain days and/or times. However, I
find that both the Defendant and its employees violated the time
and hour limitations unknowingly. While the Defendant correctly
states in its brief that ignorance of the law is no excuse, such
unintentional behavior is properly considered in determining the
propriety of a civil money penalty. 29 C.F.R. § 579.5(d)(2).
Consequently, I find that the violations of the child labor
provisions regarding time and hour limitations did not include any
intentional or heedless exposure of any of the minors to obvious
[PAGE 8]
hazards.
Regarding the five violations surrounding the operation of a
motor vehicle by employees under age 18, I also find these
violations to be minor. In fact, had the Defendant not stipulated
to the violations, I likely would have found that the actions of
the employees in these five instances would be excluded from the
Act's prohibition under the "incidental and occasional" exception.
29 C.F.R. § 570.52(b)(1). Even considering these instances
to be in violation of the Act, I nonetheless find the violations to
be very minor. Evidence indicated that all motor vehicle operation
concerned transporting golf carts, golf merchandise, or other golf
course related items among the Defendant's three golf courses. The
golf courses are all within six miles of each other and the
majority of the roadways traveled by the employees were within
private property of the Defendant's development. Also, the
operation of motor vehicles occurred only occasionally, on average
once per week, and were purely incidental to the employees' primary
job duties. Therefore, I find that the operation of motor vehicles
which is the basis for five violations of the Act, while perhaps
technically "particularly dangerous," in reality posed only an
incidental, occasional and de minimis threat to the safety
and well-being of the minor employees.
As a whole, the Plaintiff failed to produce any evidence that
any of the Defendant's nine violations were anything but de
minimis. The Secretary of Labor noted that "de minimis"
is shorthand for the maxim "the law does not care for, or take
notice of, very small or trifling matters." Echaveste v. Horizon
Publishers and Distributors, 90-CLA-29, Sec'y Decision (May 11,
1994), aff'd on recon. (July 21, 1994) (quoting
BLACK'S LAW DICTIONARY, at 388 (5th ed. 1979). I find that the
Defendant's violations were unintentional, and that the Defendant
has displayed no intent to retard the purpose and objectives of the
child labor provisions of the Act. On the contrary, the Defendant
has proven his support for his high school age employees' scholarly
and extracurricular endeavors. Witnesses testified that the
Defendant allowed its young employees to do their homework during
slow periods at work and also allowed the employees to practice
various sports on its facilities.
Furthermore, in examining all regulatory factors, I find no
support for the imposition of a civil money penalty on the
Defendant. Over the past 30 years, the Defendant has employed over
1,000 minor employees and has no history of child labor violations.
The violations did not expose the minors to any special hazards and
any injuries to minors resulted from the violations. Also, the
[PAGE 9]
Defendant has changed its employment practices and given credible
assurances of future compliance with the Act. Furthermore, the
weight of the evidence indicated that the violations were
unintentional and inadvertent, and did not involve heedless
exposure of any minors to obvious hazards or detriment to their
health or well-being.
In conclusion, I find that the violations of the Act committed
by the Defendant were de minimis and thus, a civil money
penalty is not necessary to achieve the objectives of the Act.
ORDER
IT IS ORDERED that pursuant to 29 C.F.R. § 580.12,
the imposition by the Administrator, Employment Standards Adminis-
tration, Wage and Hour Division, United States Department of Labor,
of a civil money penalty in the amount of $4,150.00 against the
Defendant is hereby REVERSED.
___________________________
DANIEL J. ROKETENETZ
Administrative Law Judge
NOTICE OF APPEAL RIGHTS
Pursuant to 29 C.F.R. § 580.13, any party dissatis-
fied with this Decision and Order may appeal it to the Secretary of
Labor within 30 days of the date of this Decision, by filing 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. 2001-8002. If
no timely appeal is made, this Decision and Order shall be deemed
the final agency action.
[ENDNOTES]
[1]
In this Decision and Order, "JX" refers to Joint exhibits,
"stip." refers to the Stipulations of the parties, and "Tr." refers
to the transcript of the hearing.
[2]
Assuming arguendo that the Defendant had not stipulated to
the nine violations under the Act, I would have found that the
Plaintiff failed to prove violations of the Act in certain instanc-
es. Five of the nine violations fall under 29 C.F.R. §
570.52(a), which provides, in pertinent part, that the operation of
a motor-vehicle on a public road is particularly hazardous for the
employment of persons under 18 years of age. In the case of Joe
Donley, Tom Lytle, Don Rankin, Jon Streeter and Kasey Thren, the
Plaintiff contended that such employees' operation of golf carts
and pickup trucks hauling golf carts on the public roads connecting
the Defendant's three golf courses constituted occupations
particularly hazardous. However, Section 570.52(b)(1) excludes
from violation the incidental and occasional driving of certain
vehicles by employees under age 18. Subsection (b)(1) states that
paragraph (a) of this section shall not apply to the
operation of automobiles or trucks not exceeding 6,000
pounds gross vehicle weight if such driving is restricted
to daylight hours; provided, such operation is only
occasional and incidental to the minor's employment; that
the minor holds a State license valid for the type of
driving involved in the job performed and has completed
a State approved driver education course; and provided
further, that the vehicle is equipped with a seat belt or
similar restraining device for the driver and each
helper, and the employer has instructed each minor that
such belts or other devices must be used.
Admittedly, because of the stipulations, the Plaintiff did not
attempt to prove each violation at the hearing, but nonetheless, I
would be hard pressed to find that the motor vehicle operation of
the five individuals named was anything more than incidental and
occasional in nature. See Usery v. Tooele City
Corp., 23 WH Cases 116 (1977) Therefore, I would find that
these five alleged violations would fall within the exception
promulgated at 20 C.F.R. § 570.52(b)(1).
[3]
Bruce Weisner, Assistant District Director, Wage and Hour
Division, United States Department of Labor, testified that if
certain criteria are met concerning a violation, neither he nor his
staff have any discretion to fail to issue a civil money penalty.
(Tr. 28-29) Regardless, I find that the statutory and regulatory
language concerning civil money penalties is clearly permissive and
does not require that a monetary penalty be imposed in all cases.
