FLSA Dispute: Court Orders Employer to Pay $750K in Back Wages, Damages

When employers fail to honor wage and hour settlement agreements, the Department of Labor’s next step is to seek a court order. In this recent incident, a Washington employer operating four restaurants allegedly backed out of a deal to settle up on back wages.

According to an investigation by the Wage and Hour Division, Rancho Chico violated the Fair Labor Standards Act (FLSA) by failing to pay employees the required time-and-a-half overtime premium for hours over 40 in a single workweek, and paying some nonexempt employees a salary for all hours worked, which pushed their pay below the federal minimum wage.

The agency also determined Rancho Chico retaliated against an employee who filed a wage complaint and violated federal child labor laws prohibiting minors from working on hazardous equipment.

Owners Defaulted on FLSA Settlement Agreement

Following the investigation, owners Nolberto and Guillermina Rodríguez agreed to pay back wages to the 42 affected employees — but they failed to pay the amounts owed. So the DOL sought a court order.

A federal court in Washington ordered the Rodríguezes and the restaurant to pay
$750,000 in back wages and damages to the affected workers and to comply with
the FLSA going forward, including properly paying employees for all hours worked,
maintaining accurate records and refraining from retaliating against workers who
exercise their rights.

This case shows that payroll violations rarely stay contained. Wage calculation
failures across 42 workers compounded into overtime violations, minimum wage
failures, retaliation claims and child labor infractions — and turned into a high six-
figure obligation.