US Department of Labors subpoena against Boston area labor broker upheld by US Court of Appeals

BOSTON — The U.S. Department of Labor scored an important victory in the U.S. Court of Appeals for the First Circuit against Operation Management Group Co. Inc., a contractor that supplied personnel to restaurants and other service industries in the greater Boston area, and its owner, Adilso Bosi. The court confirmed the secretary of labor's subpoena authority and affirmed the district court's order holding OMG and Bosi in contempt of court for failing to cooperate with the investigation by the Labor Department's Wage and Hour Division into several Boston-area restaurants to which OMG provided staffing services.

"The First Circuit's message is clear: The secretary of labor may require the production of records relevant to an investigation without first establishing that the subpoenaed party is itself covered by the Fair Labor Standards Act," said George Ference, administrator of the Wage and Hour Division's Northeast Regional Office. "When parties refuse to comply with lawfully issued subpoenas, the Labor Department will use all available enforcement tools, including litigation, to require production of necessary records and testimony. The department is committed to bringing violators into compliance and leveling the playing field, so that law-abiding employers are not placed at a competitive disadvantage for playing by the rules and paying their workers full and fair wages."

The Fair Labor Standards Act authorizes the secretary of labor to investigate and gather data regarding wages, hours, and other conditions and practices of employment, and to issue subpoenas for the production of documents relating to any matter under investigation.

During the course of the Wage and Hour Division's investigation, OMG refused to cooperate and denied investigators access to time and payroll records, as required under the FLSA. In response, the department served OMG with an administrative subpoena to compel disclosure of all records necessary to complete the federal investigation. When OMG continued to deny access to records, the department's Office of the Solicitor obtained a judgment from the U.S. District Court for the District of Massachusetts ordering OMG to comply with the department's subpoena and levying a fine of $1,000 per day for each day of noncompliance with the subpoena. To date, fines against OMG and Bosi have accrued to more than $340,000.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular hourly rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week.

For more information on the FLSA and other federal laws administered by the Wage and Hour Division, call the division's toll-free helpline at 866-4US-WAGE (487-9243) or visit http://www.dol.gov/whd.