Chicago restaurant pays $17K in penalties for not complying with Department of Labor subpoena for wage investigation

Date of action:                     Sept. 20, 2022

Type of action:                    Judgement

Names of defendants:     Reza's Tower Inc., also known as Reza Oak Brook Inc.

                                                     Reza and Ryan Toulabi

Court:                                       U.S. District Court Northern District of Illinois

Docket Number:                 21 CV 1300   

Resolution:  Reza’s Tower Inc., also known as Reza Oak Brook Inc., made final payment on contempt fines of $15,750, and a compensatory fine of $1,662, in attorney's fees for failing to comply with a June 2020 subpoena to provide documents for a U.S. Department of Labor Wage and Hour Division investigation. Payment follows a January 18, 2022 court order enforcing attorney’s fees and daily coercive fines.

Background: District Court Judge Sara L. Ellis granted the motion for attorney’s fees and to enforce coercive fines after the department filed a March 2021 petition for subpoena enforcement. The court also extended its civil contempt finding to owners, Reza and Ryan Toulabi. In October 2021, Reza’s Tower complied with the subpoena. The division’s subsequent investigation found no violations.

Quotes: “Reza’s Tower Inc. and its owners paid a total of $17,412 in fines for failing to comply with a subpoena for its payroll records. After the court order, the employer complied and, following compliance audit of its payroll records, the division did not substantiate violations. They could have avoided contempt fines and other penalties by simply complying with our investigation,” said Wage and Hour District Director Thomas Gauza in Chicago.

“The courts upheld the Department of Labor’s broad investigative authority under the Fair Labor Standards Act, and that employers must comply with the department’s request for records’ audits and on-site inspections that ensure compliance with wage and hour laws,” said Regional Solicitor of Labor Christine Heri in Chicago.