Ex-Labor exec found violating labor law

The Department of Labor has barred a company and its officers, including former congressman and Labor deputy secretary Andrew S. Salas, from hiring alien workers after they failed to pay the wages of former employees.

Under a settlement agreement, Labor Administrative Hearing Officer Jerry Cody said that Da Kine Inc. and its president, Andrew Salas, and corporate officer William Mott are both disqualified from employing alien workers for three years.

Cody’s order, issued last week, said that Salas and Mott may petition to lift this bar once the settlement amounts, including liquidated damages, are fully paid to complainants Sammy R. Fabito and Alfredo M. Lumabi.

Andrew Salas was also a Commerce secretary during the Babauta administration.

Cody said that Andrew Salas’ brother, Tom Salas, also provided false and misleading information to Labor Director Barry Hirshbein and to the hearing officer during the course of the Labor’s order to show cause hearing,

He said that Tom Salas’ statements about being a corporate officer with authority to allow payments by Da Kine Inc., which were made during the Jan. 20, 2009 hearing, “were patently false.”

Cody said Tom Salas is not a party to the case, so he will not issue an order sanctioning him for his conduct in this instance.

“However, Mr. [Tom] Salas is warned that any future instances of providing false or misleading information to the department may result in the filing of an agency case against him for such conduct,” the hearing officer said.

Cody revoked all valid work permits issued to Da Kine’s other alien workers—Joel O. Tagalicud, Nita D. Batuigas, Analyn S. Clapis, Joel M. Salvosa, Ritchel J. Jocson, Jiorella T. Caburnay, and James R. Garduce.

Cody allowed the seven to seek new employers.

Cody said that if Ka Dine Inc. repays the remaining amounts owed under the settlement ($1,633.56 to Lumabi and $3,309.60 to Fabito) in full on or before March 15, 2009, the cases shall be closed with no liquidated damages award and no sanctions against any corporate officers.

Alternatively, the hearing officer said, if Da Kine Inc. chooses to return to the installment schedule of payments, the company’s monthly settlement payments to Lumabi and Fabito shall be reduced from $250 to $125 per month, beginning March 15, 2009.

If Da Kine chooses to return to the installment schedule, Cody said, the company is ordered to pay liquidated damages in the amount of $1,000 each to Lumabi and Fabito.

The order to show cause hearing in the case was held four times in January in response to the Labor Director’s request to allow the employer the opportunity to explain why all permits for alien workers held by Da Kine should not be revoked.

According to Labor records, the labor cases were initially filed by Lumabi and Fabito, former employees of Da Kine Inc., which owned the Hawaii Bar and Grill, for unpaid wages.

In August 2008, both cases were settled during mediation, with Da Kine agreeing to pay thousands of dollars in unpaid wages to the complainants.

Under the settlement agreements, Da Kine promised to pay $3,859.60 to Fabito and $2,183.56 to Lumabi. The parties agreed that the settlements would be paid in monthly installments of $250 each, commencing on Sept. 15, 2008, and continuing on the 15th of each month.

Da Kine paid monthly installments in September and October 2008, but then made no payments in November and December 2008, and in January 2009.

Da Kine paid $50 to each complainant during the January 2009 hearing.

At the first hearing last Jan. 20, Tom Salas testified that he was Da Kine’s corporate secretary and that he had the authority to make agreements on behalf of the corporation.

Tom Salas agreed that Da Kine would pay the missing payments ($750 each) to each worker, plus $750 in liquidated damages no later than Jan. 23, 2009.

At the next hearing on Jan. 23, Da Kine’s president, Andrew Salas, appeared and renounced promises made by his brother, Tom.

Andrew Salas stated that his brother was not a corporate officer and that he was not authorized to make any promises to pay the settlements.

With respect to the delinquent payments, Andrew Salas admitted that he had known Da Kine was obligated to make monthly settlement payments in 2008. He claimed that he needed all available funds to keep Hawaii Bar & Grill in operation. Thus, Ka Dine did not pay the amounts and, instead, sought to modify the settlement agreement.

At the Jan. 26 hearing, Andrew Salas announced that Da Kine’s management had decided to permanently close the Hawaii Bar & Grill and that the business had, in fact, closed two days earlier—on Jan. 24.

Labor Director Hirshbein indicated that he had no specific objections to the proposal, but that he believes that Da Kine and its officers should be barred from employing alien workers in the future.

In his administrative order, Cody said even if the failure to pay is not considered bad faith conduct, it still amounts to a breach of the settlement agreements, thus entitling the Labor Director to raise the issues of sanctions against Da Kine and for such conduct.

In imposing sanction against Da Kine and its officers, Cody cited that Da Kine continued to hire additional alien workers after it began to experience financial hardships in September 2008.

Cody said Andrew Salas testified that he employed one foreign national worker as a cook on a part-time basis, despite the fact that Da Kine had never submitted a permit application to employ her.