Local nonprofit ordered to pay back wages

ELKINS — An area nonprofit organization has been ordered to pay more than $100,000 to the U.S. Department of Labor after admitting it paid its employees less than the required minimum wage for nearly two years.

The defendant in the civil action, Randolph County Sheltered Workshop, was found to have failed to pay the required federal minimum wage between Oct. 21, 2012, and Sept. 19, 2014, resulting in back wages owed to total $119.040.63, as ruled on Feb. 21 by a jury sitting on the civil action in the U.S. Court for the Northern District of West Virginia, Elkins Division.

Additionally, during a final pre-trial conference on Feb. 12, Randolph County Sheltered Workshop — doing business as Seneca Designs and represented by attorney Harry A. Smith III — stipulated that during the time period, the defendant was subject to the Fair Labor Standards Act, did not possess a valid special minimum wage certificate and paid its employees less than the federal minimum wage requirement of $7.25 per hour, according to court documents.

The plaintiff in the case is R. Alexander Acosta, secretary of labor, United States Department of Labor (Wage and Hour Division). The plaintiff was represented by Avni J. Amin, Karen M. Barefield, Leah A. Williams and Helen Altmeyer.

According to a memorandum in support of the plaintiff’s motion for judgment as a matter of law, “The evidence presented at trial supports only one reasonable verdict, and that is a verdict in favor of the Plaintiff (sic).”

Randolph County Sheltered Workshop is a nonprofit organization. Between Oct. 21, 2012, and Sept. 19, 2014, employees of the organization made, assembled, packaged and shipped various goods, including fishing lures, according to the memorandum.

The memorandum further states the defendant contends that its “alleged reliance on two thirty-year-old (sic) letters from a Department of Labor employee constitutes good faith that absolves it of liability under the FLSA and bars an award of liquidated damages.” However, the defendant failed to produce any evidence to meet the “heavy” burden of proving these good faith affirmative defenses, according to the memorandum.

The “good faith defense” is reliant on two letters from Mary Jane Risch, a compliance specialist employed by the Department of Labor, dated Sept. 29, 1980, and Nov. 10, 1981, and sent to then-Randolph County Sheltered Workshop Executive Director Gene Oschendorf. Both letters indicated the defendant was not covered by FLSA and did not require a sheltered workshop certificate because its market was limited to West Virginia.

The memorandum indicates that Mike Turner, who was executive director for Randolph County Sheltered Workshop between Oct. 21, 2012, and Sept. 19, 2014, was responsible for “ensuring Defendant (sic) was in compliance with federal law, including the FLSA, during this period.”

The memorandum indicates the defendant produced no evidence proving Turner had even read the 1980 and 1981 letters nor any evidence proving Turner relied on the letters when making the decision to pay employees less than the federal minimum wage.

Based on the fact that Randolph County Sheltered Workshop began marketing outside of West Virginia in the late 1990s when employees began making and packaging lures for an Arkansas company that were eventually shipped to place such as Georgia, Illinois and the western United States — which they continued to do between Oct. 21, 2012, and Sept. 19, 2014 — representatives should have contacted the U.S. Department of Labor and applied for Section 214(c) sheltered workshop status, the memorandum states.

The memorandum reads that the “good faith defense” also requires an employer “provide adequate proof that it did not take an ‘ostrichlike’ approach to the FLSA by “simply remain[ing] blissfully ignorant of FLSA requirements;” however, the defendant “did exactly that” and “freely admits that it ‘relied’ exclusively on the 1980 and 1981 letters rather than determining what was required of the (Randolph County Sheltered Workshop) under the FLSA.”

It further states the “Defendant’s (sic) admission that it violated the FLSA, coupled with its failure to meet the ‘heavy’ burden of proving with ‘plain and substantial’ evidence it violated the FLSA in good faith, demands the conclusion that Plaintiff (sic) is entitled to judgment as a matter of law pursuant to Fed. R. Civ. P. 50 (Federal Rules of Civil Procedure Rule 50. Judgment as a Matter of Law in a Jury Trial; Related Motion for a New Trial; Conditional Ruling).”

The judgment order, filed on Feb. 26 by U.S. District Judge John Preston Bailey, it notes that on Feb. 21, the jury found the plaintiff had proved the Randolph County Sheltered Workshop failed to pay its employees, listed on Wage Hour Form WH-56, the federal minimum wage; the defendant had not proved that its failure to pay the federal minimum wage was in good faith reliance upon any written administrative regulation, order, ruling, approval, or interpretation of the Wage and Hour Division of the Department of Labor, or any administrative practice or enforcement policy of the agency; and that the plaintiff should be awarded $119,040.63 as the employees’ back wages.

In the Feb. 26 filing, the court ordered the judgment be entered in favor of the plaintiff. Randolph County Sheltered Workshop has until March 23 to file any post-trial motions, according to court documents.

The Inter-Mountain reached out to Smith Wednesday but calls were not returned as of presstime.


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