Department of Labor files suit alleging Valparaiso, Indiana, auto mechanics did not earn minimum wage or overtime pay

Date of Action: May 1, 2015

Type of Action: Fair Labor Standards Act Lawsuit

Name of Defendant: Five M's LLC, d/b/a Premier Auto, Premier Auto Sales and Valparaiso Transmission also known as Valparaiso Car Care and Transmission, R-Way Inc., d/b/a L & W Auto Salvage, and John Morgavan

Allegations: An investigation by the U.S. Department of Labor's Wage and Hour Division found that the Valparaiso, Indiana-based companies and John Morgavan violated the Fair Labor Standards Act. Morgavan was responsible for both Valparaiso Car Care and Transmission and L & W Auto Salvage.

The lawsuit alleges that both businesses failed to pay mechanics, detailers, and other employees' minimum wage and overtime at the rate of time and a half for hours worked beyond 40 in a workweek.

The overtime violations resulted from several unlawful practices. The employer paid employees straight time after 40 hours worked in a pay period, instead of time and a half their hourly rate of pay. In at least one instance, an employee did not receive his final paycheck for his last two-week pay period. Minimum wage violations occurred when employees were paid flat rates for all hours worked.

Resolution: The suit seeks back wages and an equal amount as liquidated damages for the employees. It also asks for an injunction against Valparaiso Car Care and Transmission, L & W Auto Salvage, and Morgavan from future violations of the FLSA. Wage and Hour investigators calculated a total $28,954 in back wages and liquidated damages due to employees at both locations.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Additionally, the law requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law.

Quote: "Denying these workers the wages they rightfully earned harms not only the employees and their families, but makes it harder for law-abiding employers to compete," said Thomas Gauza, district director for the Wage and Hour Division in Chicago. "Through investigations like this one, the Wage and Hour Division continues to combat widespread labor violations. "We will use every enforcement tool at our disposal to ensure a fair day's pay for a fair day's work."

Court: U.S. District Court for the Northern District of Indiana, Hammond Division

Docket Number: 2:15-cv-00176