CLAUDIA WILKEN, District Judge.
Plaintiff, THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor, hereby moves the Court for entry of the concurrently filed Consent Judgment.
Respectfully submitted.
Plaintiff, THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor (the "Secretary") and Defendants Fatima/Zahra, Inc., doing business as Lake Alhambra Assisted Living Center ("Lake Alhambra"), Mrs. Mehrangiz (Gita) Sarkeshik, and Mr. Abolfazl Sarkeshik have agreed to resolve the matters in controversy in this civil action and consent to the entry of this Consent Judgment.
A. The Secretary has filed a complaint and a First Amended Complaint pursuant to Section 7, 29 U.S.C § 217, of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C §§ 201-19 (hereinafter "FLSA"), to enjoin Defendants from violating the FLSA, and pursuant to section 16(c) of the FLSA, 29 U.S.C. § 216(c), requesting unpaid minimum wage and overtime compensation for Defendants' employees, together with an equal amount as liquidated damages. The First Amended Complaint alleges that the Defendants violated Sections 6, 7, 11(a), 11(c), 15(a)(2), 15(a)(3), and 15(a)(5) of the FLSA, 29 U.S.C. §§ 206, 207, 211(a), 211(c), 215(a)(2), 215(a)(3), and 215(a)(5) by retaliating against employees, including by intimidating and threatening to terminate employees who cooperated with the Secretary's investigation into Defendants' compliance with the FLSA, by obstructing the Secretary's investigation into Defendants' compliance with the FLSA, by failing to create and maintain records as required by the FLSA, and by failing to pay employees minimum wage for all hours worked, and by failing to pay employees at the rate of a time and a half for all hours worked over 40 in a week.
B. Defendants acknowledge service of the Secretary's Complaint and summons, and the First Amended Complaint.
C. Defendants are represented by counsel, and have appeared in this action and answered the First Amended Complaint.
D. Defendants resolve this lawsuit without admitting that they owe the amount of money that they have agreed to pay herein.
E. The Secretary and Defendants waive Findings of Fact and Conclusions of Law, and agree to the entry of this Consent Judgment in settlement of this action, without further contest.
F. The parties agree that this Consent Judgment is intended to, and does in fact, resolve, fully and finally, all claims related to alleged unpaid wages owed under the Fair Labor Standards Act with respect to any and all Lake Alhambra employees employed during the relevant time period as set forth on the attached Exhibit A for the periods set forth therein. FLSA section 216(c) shall apply to terminate the right of each of the Lake Alhambra employees listed in Exhibit A to bring an action seeking unpaid back wages and liquidated damages under the FLSA for their work at Lake Alhambra for the time frames set forth for that employee. After each employee has received all of the payments specified in Exhibit B, the Secretary will request that each employee sign a back-wage receipt and release form (WH-58). The Secretary will provide a copy of all signed WH-58 forms to Defendants within thirty days of the last payment set forth in Exhibit B. This Consent Judgment is not a bar to any employee not named on Exhibit A, nor is it a bar for any period not identified in Exhibit A.
G. Defendants admit that the Court has jurisdiction over the parties and subject matter of this civil action and that venue lies in the Northern District of California.
H. Defendants have been advised and understand that entering into this Judgment means that they must comply with the FLSA.
I. Defendants understand that if they fail to pay the amounts due under this Judgment, or if they fail to pay the minimum wage and overtime required by the FLSA, or if they demand or accept any of the funds due employees under this Judgment, or retaliate against any employee for exercising any of their rights under the FLSA, they may be subject to additional court action by the Secretary, including an action for contempt of court, and may be subject to additional injunctive relief and penalties.
It is therefore, upon motion of the attorneys for the Secretary, and for cause shown,
ORDERED, ADJUDGED, AND DECREED that Defendants Fatima/Zahra, Inc., doing business as Lake Alhambra Assisted Living Center ("Lake Alhambra"), its officers, Mrs. Mehrangiz (Gita) Sarkeshik, and Mr. Abolfazl Sarkeshik, and their agents, and employees hereby are permanently enjoined and restrained from violating the provisions of the FLSA, including in any of the following manners:
1. Defendants shall not, contrary to FLSA §§ 6 and 15(a)(2), 29 U.S.C. §§ 206 and 215(a)(2), employ any employee who in any workweek is engaged in commerce or the production of goods for commerce or employed in an enterprise engaged in commerce or the production of goods for commerce, within the meaning of the FLSA, at wage rates less than the applicable federal minimum wage rate.
2. Defendants shall not, contrary to FLSA §§ 7 and 15(a)(2), 29 U.S.C. §§ 207 and 215(a)(2), employ any employee who in any workweek is engaged in commerce or the production of goods for commerce or employed in an enterprise engaged in commerce or the production of goods for commerce, within the meaning of the FLSA, for a workweek longer than 40 hours unless the employee is paid at a rate of time and one half the employee's regular rate for all hours worked in excess of 40 hours in a workweek.
3. Defendants shall not fail to make, keep, preserve and make available to authorized agents of the Secretary for inspection, transcription, and/or copying, upon their demand for such access, records of employees and of the wages, hours, and other conditions and practices of employment maintained, as prescribed by regulations issued, and from time to time amended, pursuant to FLSA §§ 11(c) and 15(a)(5), 29 U.S.C. §§ 211(c) and 215(a)(5) and the implementing regulations found in Title 29, Code of Federal Regulations, Part 516.
4. Defendants shall not fail to cooperate with the Department of Labor in any investigation conducted pursuant to FLSA Section 11(a), 29 U.S.C. § 211(a).
5. Defendants, along with their officers, agents, and employees, shall not terminate or threaten to terminate any employee, or retaliate or discriminate against any employee in any other way, including without limitation retaliation through assignment of hours or shifts, pursuant to FLSA Section 15(a)(3), 29 U.S.C. 215(a)(3), based on their belief that an employee exercised or asserted his or her rights under the FLSA or spoke with or otherwise cooperated with the Department of Labor.
6. Defendants, jointly and severally, shall not continue to withhold the payment of $152,500 in minimum wage and overtime pay hereby agreed to be due under the FLSA to 32 employees, as a result of their employment by Defendants during the period of March 26, 2011 through June 22, 2014 ("back wage accrual period") as set forth in the attached Exhibit A, showing the name of each employee and listing on the same line the gross back wage amount due the employee and the period of employment covered by the Consent Judgment.
AND IT IS FURTHER ORDERED AND ADJUDGED that
7. Defendants, jointly and severally, in accordance with the schedule attached as Exhibit A, shall pay the amount of $152,500 for liquidated damages and the back wages of $152,500 that the Secretary hereby agreed to be due under FLSA Section 16(c), 29 U.S.C. § 216(c) for a total of $305,000.
8. Defendants, jointly and severally, in accordance with the schedule attached as Exhibit B, agree to pay $25,000 in civil money penalties ("CMPs") assessed against the Defendants, and finally determined, pursuant to authority granted in FLSA § 16(e), 29 U.S.C. § 216(e) for alleged repeat and willful violations of the minimum wage and overtime pay provisions of the FLSA during the back wage accrual period.
9. JUDGMENT is hereby entered against Defendants jointly and severally, and in favor of the Secretary, in the amount of $330,000.
10. To accomplish the requirements of Paragraphs 6-8, Defendants shall make all payments due under this Judgment at the times, in the amounts of the type (back wages, liquidated damages, or CMPs), and to the persons as set forth below and on the attached Exhibit B. All payments and documents due under this Judgment shall be delivered to Assistant District Director, Celeste Hale, Wage and Hour Division, United States Department of Labor, 90 7th Street, Suite 12-100, San Francisco, California 94103 on or before the date due:
a. Within 10 days of entry of this Judgment, Defendants shall deliver a schedule showing the name of each Lake Alhambra employee listed on the attached Exhibit A, the employee's social security number, the employee's home address and telephone numbers, and showing the gross amount due, the employee portion of legally required deductions made from the gross back wage amount due to each (as a result of legal deductions required by law, such as federal, state and/or local taxes and FICA which Defendants shall forward to the appropriate agency), and the resulting net back wage amount ("Net Back Wage Schedule").
b. Defendants shall make payments totaling $330,000 in six monthly installments commencing thirty (30) days after entry of the consent judgment, and at the times and in the amounts as set forth in the attached Exhibit B. The payments shall be allocated to liquidated damages, back wages, and civil monetary penalties as set forth in the "type" column of Exhibit B.
c. The payments shall be made in the amount set forth in the installment schedule attached hereto as Exhibit B (subject to the deductions set forth in the Net Back Wage Schedule). Each payment to the individuals listed on Exhibit B shall be made by cashier's check payable to Wage & Hour Division, U.S. Department of Labor, as
d. The payment to each individual as set forth on Exhibits A and B shall be subject to legal deductions required by law (such as federal, state and/or local taxes and FICA), which deductions Defendants shall pay to the appropriate government agencies on the portion representing back pay only. Defendants will also pay to the appropriate government agencies the employer's share of social security withholdings, and shall also mail an IRS Form W-2 for the portion of the payment representing back wages for each individual for the tax year in which the back wage payments are made.
e. The Secretary shall distribute the moneys due under this Judgment to the persons named on the attached Exhibit A, or to their estates, in his sole discretion. The Secretary acknowledges that the monies due under this Judgment are based on a reconstruction of hours worked, because Defendants failed to maintain an accurate record of the hours worked. Any money not so paid within a period of three years from the date of its receipt, because of an inability to locate the proper persons or because of their refusal to accept it, shall be deposited by the Secretary in a special deposit account for payment to the proper persons and upon such inability to pay within 3 years, shall then be deposited in the Treasury of the United States, as miscellaneous receipts, pursuant to 29 U.S.C. § 216(c).
f. In the event of any default in the timely making of any payment due hereunder, the full amount due under the back wage and liquidated damages provisions of this Consent Judgment which then remains unpaid, plus post-judgment interest at the rate of 10% per year, from the date of this Judgment until paid in full, shall become due and payable upon the Secretary's sending by ordinary mail a written demand to the Defendants.
It is further ORDERED, ADJUDGED, AND DECREED that
11. Within 45 days of execution of this Consent Judgment, Defendants will purchase an advertisement in a local Contra Costa County Spanish language publications for two weeks or $2,000 containing information about this lawsuit and Consent Judgment and asking that former employees of Lake Alhambra since March 26, 2011 to contact the U.S. Department of Labor at (415) 625-7720 regarding the payment of wages. Within 15 days of execution of this Consent Judgment, Defendants will provide the Secretary with a draft of the advertisement prior to its submission, for their review and approval. The Secretary shall have 15 days to review the ad. Defendants shall provide a final copy of the ad to the Secretary upon the ad's publication. Defendants agree to make diligent efforts to have the ad published, and will post a copy on a prominently located bulletin board at Lake Alhambra during the period of publication.
12. Defendants shall execute one deed of trust to secure the payments described in Paragraph 4 through 7. The deed of trust shall be recorded against the real property commonly known as 825 E. 18th Street, Antioch, California 94509-2835, and will be attached hereto as Exhibit C prior to filing of this Consent Judgment. Defendants have provided proof of an encumbrance by Wells Fargo Bank of approximately $1,270,000 as of September 5, 2014 and have represented that this is the only encumbrance on this property and that this constitutes sufficient equity to satisfy the Judgment of $330,000 against Defendants. If the Court does not sign this Consent Judgment, the Secretary will immediately release the deed of trust attached as Exhibit C. Defendants agree not to further encumber the property. If Defendants default on their payment obligations, they shall be given 30 days written notice to cure the default. If Defendants fail to cure their default, Plaintiff shall, at his discretion and without further notice to Defendants, cause the trustee, identified in the deed of trust or subsequently substituted, to sell the property described in Exhibit C to satisfy Defendants' obligations outlined in paragraphs 6 through 8.
13. Defendants, along with their officers, agents, and employees, shall not in any way demand, require or accept from any employee any portion of the back wages or liquidated damages due under this Consent Judgment nor deduct any portion of the back wages or liquidated damages from wages paid to employees going forward. Defendants cannot threaten or imply that adverse action will be taken against any employee because of his/her receipt of funds due under this Consent Judgment and may not harass, retaliate, discharge or reduce the hours of any employee because of the employee's receipt of the back wages or liquidated damages due under this Consent Judgment. Demanding or accepting any of the payments due under this Consent Judgment or threatening any employee for accepting money due under this Judgment is specifically prohibited by this Consent Judgment.
14. Defendants, along with their officers, agents, employees, shall not tell anyone who works for them not to speak to representatives of the Department of Labor or the Independent Monitor or to provide false information to the Department of Labor or the Independent Monitor regarding the terms and conditions of their employment, or ask anyone who works for them to give them any documents or business cards provided by representatives of the Department of Labor or Independent Monitor. However, nothing in this Consent Judgment prevents Defendants from requesting that their employees notify them if representatives of the Secretary or the Independent Monitor come onsite at the Lake Alhambra facility.
15. Defendants, along with their officers, agents, and employees shall not threaten to have any employee deported, or refer to any employee's immigration status.
16. Defendants, along with their officers, agents, and employees, shall not terminate, lay off, or otherwise end the employment of any Lake Alhambra employee without providing seven days advance written notice to the employee and to the Independent Monitor.
17. Defendants, along with their officers, agents, and employees, shall not provide a job reference for any Lake Alhambra employee that states anything other than the employee's dates of employment, position, and salary.
18. Defendants shall amend and maintain their record-keeping and payroll practices to comply with the FLSA. To accomplish the provisions of this paragraph, and if not already in effect at the time of entry of this Consent Judgment, Defendants shall:
a. Defendants shall maintain a time clock system and shall require each employee clock in and out on the time machine to track their own start time and end time, each day they work. Defendants shall install and maintain a video camera at the Lake Alhambra facility that is focused on the time clock and records employees clocking in and out. Defendants shall ensure that the time clock is operational and accurately recording employees' time and that employees have the materials (such as time cards) to record their time worked. Defendants shall ensure that the video camera is operational and contains tapes, digital memory, or other media sufficient to record and preserve all footage of employees clocking in and out, and that the video recording contains and records the correct date and time. Immediately upon execution and as long as Defendants own Lake Alhambra, Defendants shall maintain the time clock and video camera. Copies of all time cards and video recordings of the time clock for a period of three years shall be made available for inspection by the U.S. Department of Labor or the Independent Monitor (described in paragraph 19) any time upon request, or for the time in which Defendants own the property, if shorter than three years.
b. Not require or permit employees to work "off the clock" either before or after their shift.
c. Not reduce compensable hours worked for time spent taking lunch unless an employee is free from all duties during the time deducted for lunch.
d. For each work week, sum the time indicated on the time records recorded on the time clock by each employee to identify the time worked each day and each work week, and provide paychecks to Lake Alhambra employees that conform to the requirements of California Labor Code Section 226(a), including: each employee's gross wages earned, total hours worked, all deductions, net wages earned, the inclusive dates of the period for which the employee is paid, all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.
e. Not fail to post the attached Exhibit D in English and Spanish on a bulletin board in a prominent location at Lake Alhambra. Exhibit D summarizes the terms of this Judgment and the employees' rights under the FLSA. Defendants shall maintain this posting for a period of two years from entry of this Judgment; or until the individual Defendants sell Lake Alhambra in a bona fide sale, if that time period is less than two years.
f. Maintain all timecards, recordings of the time clock, and payroll records for a period of three years.
g. Not destroy, alter, or manipulate time or payroll records to reduce the number of hours actually worked by an employee.
h. Not request, require, or otherwise cause employees to sign inaccurate time records.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that an Independent Monitor shall be appointed as follows:
19. The Worker Rights Consortium ("WRC") is hereby appointed as the Independent Monitor.
a. WRC shall monitor Defendants' compliance with the FLSA and the terms of this Consent Judgment.
b. Defendants are jointly and severally liable for payment of the reasonable costs, fees and expenses of WRC incurred in connection with the performance of the Independent Monitor's duties as specified in this Consent Judgment.
c. Defendants shall cooperate in full with the Independent Monitor, including permitting the Independent Monitor to enter the business premises without prior notice, inspect all of the physical facilities and working conditions of the business premises, and inspect all books, records, and documents requested by the Independent Monitor, including employee time, payroll, and personnel records.
d. Within 15 days of entry of the Consent Judgment, the Independent Monitor shall conduct separate educational question and answer sessions at Lake Alhambra with supervisors concerning the requirements of the Consent Judgment and the FLSA, and with employees (for which time employees will be compensated) concerning their rights under the Consent Judgment and the FLSA, including anti-retaliation provisions. Attorneys for the Defendants and the Secretary may be present at the session for the supervisors. Attorneys for the Defendants and the Secretary may be present at the beginning of the session for employees describing the lawsuit, the terms of the Consent Judgment, and to introduce the Independent Monitor; however, attorneys for the Department of Labor will not be present at the employee session when the Independent Monitor explains how the monitoring will work in practice, the employees' rights under the FLSA, or answers questions regarding these topics.
e. During the 60 days after entry of the Consent Judgment and regularly thereafter, the Independent Monitor shall conduct interviews of employees, onsite, offsite, and/or by telephone concerning Defendants' compliance with the terms of the Consent Judgment and the FLSA, including anti-retaliation provisions. The location of the interviews shall be at the discretion of the Independent Monitor, but at least half of the interviews will be conducted offsite. Any off-site interviews shall be conducted during the employee's off-duty time, and the Independent Monitor shall schedule such off-site interviews with employees so that they do not disrupt business operations.
f. The Independent Monitor shall regularly review employee payroll, timekeeping (including time clock records and video coverage of the time clock) and other relevant documents, interview employees and supervisors, review records from the camera referenced in paragraph 18 and conduct unannounced inspections of the workplace as needed to determine if Defendants are complying with the FLSA and the Consent Judgment. The Defendants shall provide payroll and timekeeping records to the Independent Monitor within five days of paying wages to employees.
g. If the Independent Monitor believes a violation of any applicable local, state or federal law to have occurred, it will notify Mr. and Mrs. Sarkeshik within three business days. Defendants shall correct any wage violations identified by the Independent Monitor in the next regularly scheduled payroll unless Defendants dispute the violations, in which case the alleged violations shall be reported to Wage and Hour Division within five business days. The Defendants shall correct any other alleged violations identified within five business days, or the Independent Monitor will report the alleged violations to the Wage and Hour Division. However, if the Independent Monitor believes that the alleged violations it has identified are urgent or otherwise require immediate attention, the Independent Monitor shall have the discretion to immediately report the alleged violations to the Wage and Hour Division or other relevant parties.
h. The Department of Labor may provide confidential information obtained during its investigation and the lawsuit to the Independent Monitor without waiving any privileges protecting such information, including the government informant privilege. If the Independent Monitor reports a violation to the Wage and Hour Division pursuant to subparagraph g, the Independent Monitor shall provide copies of all documents relevant to the alleged violation to the Department of Labor upon its request, and such information shall remain confidential and subject to the protection of the government informant privilege.
i. The Independent Monitor shall provide quarterly reports on results of inspections and status of compliance to the Secretary, Defendants, and the Court, which shall be filed through ECF and docketed in this case.
j. At the end of one (1) year, the Independent Monitor shall make a recommendation to the Court, the Secretary, and Defendants as to whether Defendants are in substantial and sufficient compliance with the FLSA and the Consent Judgment.
k. Defendants shall not discriminate or retaliate against employees for cooperating or communicating with the Independent Monitor.
l. The duties of the Independent Monitor will conclude two years after entry of the Consent Judgment unless (a) At the conclusion of one year after the entry of this Consent Judgment, Defendants may petition the Court to end the monitors' duties. If the Secretary agrees, he will not oppose Defendants' motion; or (b) in the event of a complete ownership change of Lake Alhambra as a result of an arm's length transaction, the Independent Monitor's duties will expire at closing, except that if the closing date occurs later than three months after the entry of this Consent Judgment, the Independent Monitor will prepare a final quarterly report
20. If Defendants sell, transfer, assign, or otherwise dispose of any interest in Fatima/Zahra, Inc.'s assets, including its Lake Alhambra business, Defendants agree the remaining balance of the settlement as outlined in Paragraphs 6 through 9 above, will be due upon sale, transfer, assignment, or disposal. Defendants shall include instructions consistent with paragraph 10 in the escrow agreement regarding the sale, transfer, assignment or disposal of Fatima/Zahra, Inc.'s assets or made other arrangements to which the Secretary has agreed in writing, to ensure that the any remaining balance of the $330,000 Judgment will be satisfied through the proceeds of such a sale.
21. Defendants shall not provide information to the buyers that could be used to retaliate against Lake Alhambra employees in connection with a sale, transfer, assignment, or disposal of any interest in Fatima/Zahra, Inc.'s Lake Alhambra business.
22. Defendants agree that it will not sell, transfer, assign, or dispose of any interest in Fatima/Zahra, Inc.'s Lake Alhambra business unless the buyer agrees in writing to hire all Lake Alhambra employees as part of the sale, transfer, assignment, or disposal.
23. Defendants shall provide notice to the Secretary and WRC within seven days after execution of an Agreement to sell, transfer, or assign Fatima/Zahra, Inc.'s assets. If such sale is anticipated to occur prior to completing the payments due under the Consent Judgment, the notice shall include the escrow or other instructions agreed upon pursuant to paragraph 20, which provide for the payment of the remaining balance due under this Judgment to the Wage and Hour Division.
24. Any notice to the Secretary under this Consent Judgment shall be delivered to Assistant District Director, Celeste Hale, Wage and Hour Division, United States Department of Labor, 90 7th Street, Suite 12-100, San Francisco, California 94103 and Susan Seletsky in the Office of the Solicitor at seletsky.susan@dol.gov.
25. Further, the filing, pursuit, and/or resolution of this proceeding with the filing of this Consent Judgment shall not act as or be asserted as a bar to any action under Section 16(b) of the FLSA, 29 U.S.C. § 216(b), as to any employee not named on the Exhibit A attached hereto, nor as to any employee named on the Exhibit A for any period not specified herein for the back wage recovery provisions.
26. Violation of this Consent Judgment may subject the Defendants to equitable and legal damages and penalties, including penalties and injunctive relief for civil contempt. The Secretary will meet and confer with Defendants in advance of bringing any motion, including a motion for contempt of this Consent Judgment.
27. Upon the Court's entry of this Consent Judgment, the provisions of this Consent Judgment shall replace the injunctive relief set forth in the following court issued orders: May 22, 2014 Order regarding Temporary Restraining Order, June 5, 2014 Order Regarding Preliminary Injunction, and August 5th, 2014 Order Finding Defendants in Contempt and Modifying Preliminary Injunction, except to the extent recited herein.
ORDERED that each party shall bear its own fees and other expenses incurred by such party in connection with any stage of this proceeding, including but not limited to attorneys' fees, which may be available under the Equal Access to Justice Act, as amended; and, it is further
ORDERED that this Court shall retain jurisdiction of this action for purposes of enforcing compliance with the terms of this Consent Judgment.
