California Car Wash Operator to Pay $4.2 Million in Back Wages and Liquidated Damages Following U.S. Department of Labor Lawsuit

LOS ANGELES, CA – More than 800 employees at 12 Southern California car washes will receive a share of a $4.2 million recovery obtained by the U.S. Department of Labor to conclude a lawsuit filed by the Department. In a consent judgment entered by the U.S. District Court for the Central District of California in Los Angeles, car wash operator Vahid David Delrahim and his related businesses must pay $3.8 million in back wages and liquidated damages for violations of the Fair Labor Standards Act (FLSA), along with $400,000 in civil money penalties.

The lawsuit filed on behalf of the Secretary of Labor and the investigation by the Department found that Delrahim required employees at his company's car washes to work off the clock at the beginning of each shift and to clock out, but to remain at the car washes, when business was slow. The violations resulted in unpaid wages amounting to - on average - several hours of pay each day. As a result of the judgment, some employees will receive more than $10,000 in back wages.  

Throughout the litigation, the court repeatedly sanctioned defendants, and reprimanded their counsel, Littler Mendelson, P.C., for coercive conduct in witness interviews and in collecting declarations from defendants' employees.

"This is a major win for hundreds of employees systematically abused by one of Southern California's largest car wash operators," said Wage and Hour Division Acting Regional Administrator Juan Coria, in San Francisco. "This landmark case sends a powerful message that the Department of Labor will use strong law enforcement and litigation tools to protect employees and level the playing field for law-abiding employers."

"The court's decisions make clear that our laws protect workers and neither an employer nor their attorneys may interfere with their rights," said the Department's Regional Solicitor Janet Herold. "The integrity of our justice system depends on employers' and their attorneys ensuring that a true and accurate record free of any undue influence is presented to the court."

In addition to the recovery of $4.2 million in unpaid back wages and penalties, the judgment includes several provisions to ensure defendants' future compliance with the law. They include one year of oversight of the defendants and their car washes by a court-appointed independent monitor and issuance of notices by the defendants to workers and managers regarding employees' FLSA rights.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the Division's toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by WHD.