U.S. Department of Labor Secures $1 Million Judgment Against Arizona Electrical Contractor for Sweeping Wage Violations

PHOENIX, AZ – The U.S. Department of Labor has secured a consent judgment against Austin Electric Services LLC and its president Toby Thomas that orders the Avondale, Arizona-based electrical contractor to pay $925,000 in back wages and liquidated damages to 366 employees and $75,000 in civil money penalties for a number of Fair Labor Standards Act (FLSA) violations.

Entered by the U.S. District Court for the District of Arizona, the judgment also resolves the Department's retaliation claims against the company, its attorneys at the Cavanagh Law Firm, and its owner Scott Tonn. 

First filed by the Department in August 2016, the lawsuit stemmed from a 2015 Wage and Hour Division (WHD) investigation that disclosed systemic off-the-clock work by the contractor's electricians. Evidence showed that Austin Electric managers instructed workers not to record the many weekly hours worked beyond 40 in a week, resulting in unpaid overtime. WHD's 2015 investigation followed an earlier investigation that also revealed systemic violations of the FLSA, including nonpayment of minimum and overtime wages due to Austin Electric's electricians. 

During the litigation, the Department added retaliation claims to the lawsuit after the company and its attorneys coerced employees to sign false statements for the employer to submit to the court in defense of the case. U.S. District Court Judge Roslyn O. Silver ordered the defendants and their counsel to halt any further questioning of their workforce, explaining that the Department was likely to succeed in challenging defendants' collection of employee statements as violations of the anti-retaliation provisions of the FLSA. Judge Silver also prohibited the defendants from using the statements, striking them from the litigation.

"The defendants and their attorneys violated the Fair Labor Standards Act and other basic obligations by trying to coerce false statements from their workforce," said the Department's Regional Solicitor Janet Herold. "Federal labor laws protect workers from retaliation, which includes ensuring that they are free from having employers and their attorneys use their outsized influence to pressure them into signing inaccurate statements that deprive them of the wages they lawfully earned."

"This is a win for these employees and for contractors who play by the rules," said Eric Murray, District Director for the Wage and Hour Division in Phoenix. "The Division is committed to vigorously enforcing the law and protecting workers against retaliation for asserting their rights."

In addition to providing $1 million in unpaid wages, liquidated damages, and penalties, the consent judgment includes several provisions to ensure the defendants' and their attorneys' future compliance with the law. The judgment also prohibits the defendants and their attorneys from engaging in any retaliation in violation of the FLSA. Defendants must also issue notices to workers and managers regarding employees' rights under the FLSA, which includes the right to an accurate record of hours worked.

Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. 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). Information is also available at www.dol.gov/whd including a search tool for workers who may be owed back wages collected by WHD.