‘$191K fine vs TDHC fair, reasonable’

U.S. Labor Secretary Thomas E. Perez and other federal labor officials have asserted that the civil penalty assessment in the amount of $191,400 against the owner of Tinian Dynasty Hotel & Casino was both fair and reasonable given their repeat violations of the Fair Labor Standards Act.

Perez and other federal labor officials, through assistant U.S. attorney Jessica F. Wessling, said Hong Kong Entertainment (Overseas) Investments Ltd., owner of Tinian Dynasty, and its president Kwan Man argue that the settlement agreement between him (Perez) and HKE waived his right to access civil money penalties.

Wessling said this argument faces an insurmountable hurdle: accompanying the settlement offer, the Wage and Hour investigator transmitted to HKE and Man a cover letter indicating that the Labor administrator reserved the right to pursue civil money penalties.

Wessling said HKE and Man, however, urge that this letter should be given no weight.

Wessling discussed the civil money penalty in Perez’s and other federal labor officials’ reply in support of their motion for summary judgment.

The other federal labor officials are Wage and Hour Division administrator David Weil, Regional Wage and Hour Division administrator Ruben Rosalez, and Wage and Hour Western Region director Terrence Trotter.

In December 2014, HKE and Man filed the lawsuit against Perez, Weil, Rosalez, and Trotter for allegedly violating their due process right over their assessment of civil penalty of $191,400.

Wessling said HKE and Man further claim that without resort to evidence outside the four corners of the contract, the plain language of the agreement reflects that the agreement bars civil money penalties.

Wessling said it is unnecessary to resort to extrinsic evidence to conclude that civil money penalties were properly assessed.

“The investigator’s letter was attached to the settlement offer and is thus not extrinsic evidence,” she said.

The lawyer said HKE and Man also complain that it was somehow improper to settle for full back wages of over $300,000 and assess civil money penalties without collecting liquidated damages.

Wessling said there is of course nothing in the FLSA that would diminish Perez’s prosecutorial discretion to settle a case.

She noted that the violations in this case stem from HKE’s and Man’s failure to pay their workers on a timely basis in 2007.

“It was therefore a priority to get these workers paid promptly,” Wessling said.

Wessling said judging from HKE’s and Man’s contest of the penalties here, it is likely that had liquidated damages been assessed, the workers would still be waiting for payment some nine years later.

In their motion for summary judgment, Perez requested the federal court to affirm the Administrative Review Board’s decision that HKE and Man engaged in repeated and willful violations of the overtime provisions of the FLSA.

In their lawsuit, HKE and Man, through counsel Bruce Berline, asked the court to declare that the compliance agreement that HKE signed with a Labor investigator precludes Perez and co-defendants from assessing a civil money penalty against HKE and/or Man.

HKE and Man requested the court to set aside the decision of Labor Administrative Review that affirmed Labor Administrative Law Judge’s holding that HKE violated the overtime provisions of the FLSA and the Administrative Law Judge’s imposition of civil penalty of $191,400.

The plaintiffs asked the court to remand the matter back to a Labor Administrative Law Judge with instructions to hold a hearing on the merits regarding the propriety of the civil monetary penalty amount assessed against HKE and Man.