US Department of Labor obtains judgment to recover $442K in back wages, damages for 29 workers at 4 Milwaukee-area Chicken Palace restaurants

MILWAUKEE – A federal court has ordered the operators of four Milwaukee-area chicken franchise restaurants to pay $442,140 to 29 employees in a consent judgment and order obtained following an investigation by the U.S. Department of Labor. 

Today the U.S. District Court for the Eastern District of Wisconsin directed Chicken Palace LLC restaurants and Valdemar Escobar, owner of two Milwaukee locations and two in Kenosha and Waukesha, to pay $221,070 in back wages and an equal amount in liquidated damages to the affected workers, and a civil money penalty of $10,000 to the department for their willful Fair Labor Standards Act violations.

 The action comes after the department’s Wage and Hour Division found, from March 7, 2021, through March 8, 2023, the employer violated federal regulations by doing the following: 

• Paying employees straight-time pay rates for overtime hours over 40 in a workweek. 
• Failing to pay employees the required minimum wage. 
• Not maintaining complete and accurate time records, as required.  

“Our food service industry investigations too often find employers violating federal overtime, minimum wage and recordkeeping regulations, and workers unaware of their rights and afraid to question their paychecks’ accuracy,” said Wage and Hour Division District Director Kristin Tout in Minneapolis. “The Department of Labor will continue to hold employers accountable while making sure every worker is paid what they rightfully earned.”

“Failing to pay workers their required wages hurts employees and results in the entire restaurant community facing unfair competition,” added Regional Solicitor Christine Z. Heri in Chicago. “This outcome should remind employers that the Department of Labor will take appropriate action—including litigation—to protect workers who are denied their pay.”

 In addition to paying back wages, damages and penalties, Chicken Palace LLC and Escobar agreed to provide employees the Wage and Hour Division’s Handy Reference Guide to the Fair Labor Standards Act and other information on their federal wage protections in languages employees speak. The restaurants and Escobar also agreed to an injunction prohibiting future FLSA violations.

The family-owned Fiesta Garibaldi Restaurant Group owns the Chicken Palace Fiesta Garibaldi brand. In addition to its chicken franchise, the company has seven restaurants operating as Fat Valdy’s, Fiesta Café and Fiesta Garibaldi Mexican grill in Milwaukee, Kenosha and Waukesha. Only the four Chicken Palace restaurants are involved in this consent judgment.

Senior trial attorney Travis Gosselin litigated the case on behalf of the department’s Office of the Solicitor.

In fiscal year 2023, the Wage and Hour Division recovered more than $29 million in back wages for nearly 26,000 food service industry workers nationwide.  

The division’s restaurant compliance toolkit explains wage laws for employers and workers.  

Learn more about the Wage and Hour Division, a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. For confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.  

Download the agency’s new Timesheet App for iOS and Android devices – available in English and Spanish – to ensure hours and pay are accurate. 

 U.S. Department of Labor v. Chicken Palace LLC, et, al, Valdemar Escobar

Civil Action No. e 2:24-cv-01124-LA