Employment-DOL Settles Lawsuit For Back Wages And Damages Against Car Washes For $3.4 Million: Employers Beware-More Action May Be Coming From The DOL

In a press release dated June 30, 2009, the Department of Labor (the “DOL”) announced that it has settled a lawsuit for back wages and liquidated damages against several New York City area car washes for $3.4 million. In the lawsuit, the DOL had alleged that the car washes had violated the minimum wage, overtime and recordkeeping requirements of the federal Fair Labor Standards Act (the “FLSA”).

According to the press release, this settlement brings to a conclusion the suit filed by the DOL in the U.S. District Court for the Southern District of New York, which named as defendants a number of related car wash and auto lube businesses and the individuals who operated them. The suit (presumably including this and prior settlements) has resulted in a total recovery of more than $4.7 million in back wages, liquidated damages and post-judgment interest for more than 1,300 employees. Further, overall over the past two years, the DOL has recovered more than $5.4 million for workers in the New York City car wash industry.

Is the DOL finished? Apparently not. The press release quotes DOL Secretary Labor Hilda L. Solis as saying “This case should be a loud wake up call to other employers of vulnerable workers that the U.S. Department of Labor will not hesitate to pursue them in federal court in order to compel them to pay employees properly for all hours worked,” and “[e]mployers must be aware of their obligation to comply with all federal labor laws, and we are here to make sure that they do.”