Nonprofit’s program affected by federal decision

ELKINS — Local officials say a recent federal judgment ordering the Randolph County Sheltered Workshop to pay $119,000 in back wages to employees may jeopardize the future of the program, but also point out that the court case is not completed, and an appeal of the decision may still be filed.

“This matter is not finished,” attorney Harry A. Smith III, who has represented the Sheltered Workshop in the court proceedings, told The Inter-Mountain this week. “The program benefits 31 local people who without this program may not have this opportunity to work and be productive members of society.”

The federal judgment on Feb. 21 ordered the Elkins nonprofit to pay the back wages to 34 employees, finding that the organization violated the minimum wage provisions of the Fair Labor Standards Act

The mission of the Sheltered Workshop, which has been in operation since 1980, is to provide employment for mentally and physically challenged people. In recent years, the workshop has had three primary employment programs. The first is providing janitorial services for the Division of Natural Resources and other state agencies, and employs several workers who are high-functioning mentally and physically challenged people. The second program involves screenprinting t-shirts and hats and also employs a few people.

The third program, which employs the most people, involves assembling fishing lures for the Leland’s Lures company. This program has employed more than 30 people in recent years, and provides employment for low-functioning mentally and physically challenged people, officials said.

“The sheltered workshop has been operating for 38 years,” Smith said. “That whole time, the workshop has been testing and evaluating the clients we have … to figure out the ratio of what the average person could do, and pay our clients a percentage based on the rate at which they can perform. The results of the testing are documented.”

The federal case hinges on the workshop not having a special certificate that would allow the nonprofit to pay its workers less than minimum wage.

When the workshop was created in 1980, officials contacted the federal Department of Labor, and were told the workshop did not need such a certificate because it was not involved in interstate commerce.

The workshop began its arrangement with Leland’s Lures several years ago when the lure company was based in Belington. The company then moved to Arkansas, however, and the continuing program drew the attention of the Department of Labor.

The workshop was assembling the lures and shipping them to the purchasers. Leland’s Lures was selling the product, not the workshop, but in the government’s eyes the shipping process meant the workshop had become involved in interstate commerce, local officials said.

“As soon as we found out we needed one of these pieces of paper, we got it,” one Sheltered Workshop board member told The Inter-Mountain this week. “And we had it for two years while we were working to try to resolve the case. At the end of two years it expired, so we applied for it again. Again, we fully qualified for it, but the Department of Labor said, ‘No, we’re in litigation.’ And they didn’t give it to us.”

“And that’s the only reason we don’t have the certificate now, is because we challenged them,” Smith said. “Because we did challenge them, they’ve made us pay for it.”

“Why all these folks from D.C. want to do this to one little sheltered workshop in West Virginia, I have no idea,” the board member said.

Before the trial went to the jury phase, U.S. District Judge John Preston Bailey, in his final jury instructions, pointed out that not having the certificate was the only rule the Sheltered Workshop had violated.

“The Department of Labor has admitted that other than the failure to possess a 14(c) certificate, defendant has committed no other regulatory of statutory violations of significance,” Bailey said in his final jury instructions.

“Defendant Randolph County Sheltered Workshop admits it did not apply for a special certificate for the period of Oct. 21, 2012, through Sept. 19, 2014, and it is undisputed that defendant Randolph County Sheltered Workshop was not in possession of a special certificate that covered the period of Oct. 21, 2012, through Sep. 19, 2014.

“Even though you may have found that the defendant may have violated the Fair Labor Standards Act by paying less than minimum wage without a special certificate, the defendant may assert what is called the ‘good faith defense’ which, if proven, would excuse the payment of back wages,” Bailey said.

It was a discretionary decision for the government to file the civil action, Smith said.

“I believe that they could have approached the workshop and said, ‘Listen, it appears that you guys don’t have the certificate although you’re doing things correctly. You’d better get that certificate and if it’s not in place and you’re not doing things right, we’re going to come down on you.’ They did not have to bring this action. They could have handled it in a much less formal manner than they did.”

“Clearly, the government has admitted that, if we had that piece of paper, we’re fine. If we don’t have that piece of paper, we’re not fine. It’s really a triumph of form over substance, as I see it, and I was hoping the jury would see it that way as well,” Smith said.

It remains unclear what the future will hold for the Sheltered Workshop’s employment program arrangement with Leland’s Lures.

“We have talked about what we can do, but we’re still in the talking stages,” the board member said. “We could stop working with Leland’s Lures, but that would do away with the jobs for local low-functioning people.”

The board member also said it is not clear if or when the Sheltered Workshop will receive a 14(c) certificate.

For now, Smith points out, the court case has not been finalized.

“Because post trial motions haven’t been filed, or motions for a new trial, this case is not at an end in trial court, and of course there is a potential appeal that may be considered,” he added.