Department of Labor seeks court order to stop Brooklyn staffing agency from demanding employees stay 3 years or repay wages

NEW YORK – The U.S. Department of Labor has filed suit asking a federal court to stop a Brooklyn, New York, healthcare staffing provider from allegedly making employees sign contracts that would force them to work for the company for three years or repay rightfully earned wages.

Filed today in the U.S. District Court for the Eastern District of New York by the department’s Office of the Solicitor, the complaint against Advanced Care Staffing LLC and its CEO, Sam Klein alleges that the contracts led some employees to earn less than the federal minimum wage, a violation of the Fair Labor Standards Act.

“Federal law forbids employers from clawing back wages earned by employees, for employers’ own benefit,” said Solicitor of Labor Seema Nanda. “Employers cannot use workers as insurance policies to unconditionally guarantee future profit streams. Nor can employers use arbitration agreements to shield unlawful practices. The Department of Labor will do everything in its power to make sure employees are being paid their hard-earned wages, and to safeguard them from these types of exploitative practices.”

The department’s complaint seeks an injunction forbidding ACS and Klein from reducing employees’ wages below federal minimums, whether by demanding employees enter into contracts requiring them to cover ACS’ future profits, attorneys’ fees or costs associated with arbitration, or by enforcing such contracts.

In addition, the department is seeking back wages and liquidated damages for affected employees.

The complaint details how Advanced Care Staffing entered into contracts that flagrantly disregarded federal law by requiring employees to complete at least three years of full-time employment to keep their earned wages. The contracts would – and allegedly did – force employees who left before the contracts expired into private arbitrations, and require them to pay ACS’ future profits, plus attorneys’ fees and arbitration costs. These demands would lead – and allegedly led – to employees being paid less than the federal minimum wage.

The complaint also alleges that the employer violated the FLSA by pursuing arbitration to demand that a registered nurse – who resigned after raising repeated safety concerns – pay the company more than they ever earned to subsidize  ACS’ future profits. The complaint further alleges that ACS’s contracts and arbitration demands have a chilling effect on employees’ ability to exercise their rights, including the protection to be free from an unsafe or hazardous workplace, and to obtain the wages they are owed.

Today’s complaint stems from an ongoing investigation by the department’s Wage and Hour Division. Senior Trial Attorney Jason Glick of the Regional Office of the Solicitor in New York is litigating the case for the department.

The FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek. For more information about workers’ rights and other employee rights enforced by the division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers and workers can call the division confidentially with questions regardless of where they are from and the department can speak with callers in more than 200 languages. Use an online search tool if you think you may be owed back wages collected by the division. Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free, also available in Spanish.