US Labor Department sues Gloucester seafood processor to recover nearly $204k in liquidated damages, additional back wages

BOSTON – The U.S. Department of Labor is suing two Gloucester fish processing companies and their owner for violations of the Fair Labor Standards Act. The department’s Wage and Hour Division found that Zeus Packing Inc., Cape Ann  Seafood Exchange and owner Kristian Kristensen owed $203,998 in unpaid wages and an equal amount in liquidated damages totaling $407,996  to 132 workers for the period October 2011 through September 2014. The defendants paid the back wages to the division in December 2015, but have so far refused to pay the liquidated damages.

The department’s lawsuit was filed in the U.S. District Court for the District of Massachusetts. It asks the court to order the defendants to pay the $203,998 in liquidated damages to the workers, plus any back wages and additional liquidated damages owed them for violations committed after September 2014, and to permanently enjoin and restrain the defendants from any future FLSA violations.

The division also assessed $49,368 in civil money penalties against the employer because of the willful nature of the FLSA violations. The defendants are contesting the penalties in a separate proceeding before a department administrative law judge.

“Where employees are paid in violation of the Fair Labor Standards Act, they are entitled – as a general rule – not only to payment of back wages, but also to an equal, additional amount in liquidated damages,” said Michael Felsen, the department’s regional solicitor of labor for New England.  “This case sends a strong message that the department will use all tools at its disposal, including litigation, to ensure that workers receive every penny they have rightfully earned, to provide strong incentives for employers to comply with the law, and to level the playing field for responsible businesses.”

Zeus/Cape Ann violated the FLSA’s overtime and recordkeeping requirements when they:

• Paid the employees who cleaned, cut and packaged fish by the pound without regard to how many hours they had worked. This resulted in overtime violations when employees worked more than 40 hours in a workweek and employees were paid only their piece rates, with no overtime.
• Failed to make, keep and preserve adequate records of payrolls and work hours.
• Provided inaccurate payroll records to investigators.           

Zeus/Cape Ann used workers provided by local staffing agencies to perform the cleaning, cutting, and packaging tasks at its Gloucester plant. Despite the processing companies’ use of this outsourced labor, the division determined that Zeus/Cape Ann was the employer of the workers and bears responsibility as such under the FLSA.

 “These workers put in long, hard hours for this processor, and deserve to be paid the wages they’re legally due,” said Carlos Matos, the Wage and Hour Division’s Massachusetts district director.

The case was investigated by the division’s Boston District Office and is being litigated by attorneys James Glickman and Sheila Gholkar of the department’s Boston regional office of the solicitor.

The FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

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Perez v. Zeus Packing Inc., Cape Ann Seafood Exchange Inc. and Kristian Kristensen.
Civil Action Number:  1:16-cv-10442

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