USDOL, IPI accord seeks to purge IPI of contempt

The U.S. Department of Labor and Imperial Pacific International (CNMI) LLC have entered into a second amended consent judgment that would require IPI to pay USDOL over $2 million because IPI was found in contempt, again, of the court’s previous injunction in favor of USDOL in its case against IPI over Fair Labor Standards Act violations.

According to the second amended consent judgment that was signed by both IPI and USDOL, U.S. Labor Secretary Martin J. Walsh recently found IPI to be in violation of H-2B regulations, the Immigration and Nationality Act of 1952, and the FLSA arising from its failure to pay the promised rate and the accompanying FLSA overtime premium pay to employees hired under the H-2B program.

“[IPI has] made the payments required under the previous judgment and amendments. However, based on these violations, defendants are again in contempt of the court’s injunction against violations of the FLSA. To address these FLSA violations and purge their contempt, defendants enter into this second amended consent judgment,” the amended consent judgment states.

The court will have to first approve that consent judgment. If approved, IPI will pay $2,195,726.01 to USDOL. Of that amount, $1,010,416.04 will be payment for back wages of the affected workers and, pursuant to the authority expressly provided in Section 16 of the FLSA, IPI must pay an additional equal amount of $1,010,416.04 as liquidated damages, and an additional amount of$174,893.93 as civil monetary penalties.
According to the initial consent judgment that was approved by the court back in April 2019, IPI was required to make payments for unpaid minimum wage and overtime premiums pursuant to the FLSA.
Back on April 11, 2019, USDOL, IPI, and its mother company, IPI Holdings Ltd., entered into a consent judgment related to alleged labor violations at the IPI construction site.

IPI first violated the consent judgment on Dec. 1, 2019, when it failed to pay USDOL $1,020,000.
In May 2020, USDOL discovered that IPI was not meeting its payroll obligations and was not in compliance with the judgment’s prohibition against violating the FLSA.

After unsuccessfully making every effort to secure IPI’s compliance with the judgment, on Dec. 16, 2020, USDOL filed a petition for contempt because IPI failed to meet payroll obligations, required employees to work without pay, failed to provide payments to the Secretary of Labor, and other requirements per the 2019 consent judgment.

On Jan. 21, 2021, a hearing was held on USDOL’s contempt petition and, based on the evidence presented by USDOL, the court found the defendants in contempt of court for the continuous violation of the 2019 consent judgment by failing to make the scheduled payments and by violating the FLSA.

In a follow-up hearing on Jan. 28, 2021, IPI reported that it satisfied a portion of the consent judgment, including paying $788,022.54 and any other wages due to current IPI employees and restoring employee housing to habitable conditions.

The court ordered on Jan. 28 that IPI satisfy the remaining portion of the judgment by March 1 or the court may proceed with the appointment of a receiver to immediately begin liquidating IPI’s assets to fulfill payment.