U.S. Department of Labor Recovers $1.1 Million in Wages and Damages for Factory Workers
The U.S. Department of Labor recovered $1.1 million in back wages and damages for 165 garment workers in a Los Angeles apparel factory.
The recovery marks the largest settlement to date for garment workers in California. The federal investigation found that a Los Angeles garment contractor had illegally withheld overtime pay and attempted to conceal that wage theft.
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Four contractors were cited by the authorities for being in violation — Good Cash LLC and its associated entities, Good Cash Inc., Premium Quality Apparel LLC and Premium Quality Apparel Inc. Good Cash and Premium Quality Apparel are owned by Ramon Tecum, Marisela Romero (who is also known as Diana Tecum) and Joseph Delao. Investigators also determined former California Deputy Labor Commissioner Conrado Gomez played a significant role in the businesses.
Investigators from the department’s Wage and Hour division found that the contractors “willfully” failed to pay overtime wages for employees who exceeded their 40-hour work weeks on average by completing 52 hours a week. The federal authorities also discovered that the contractors falsified payroll records and issued fake checks to cover up their illegal pay practices.
In addition, after the Labor Department officials executed a court-authorized investigative inspection warrant, Tecum, Romero and Gomez attempted to interfere by posing as garment workers, shutting off the power to the facility, and ordering employees to leave the worksite.
As part of the investigation, the department enforced a hot goods hold on the apparel that was produced by the contractors’ employees for I Am Beyond LLC, doing business as the Beyond Yoga apparel brand. Federal law prevents interstate shipment of “hot goods” produced in violation of minimum wage, overtime or child labor regulations and applies to the employer and anyone in possession of the goods. In accordance with that provision, if an employer does not voluntarily agree to withhold goods from shipment pending resolution of an investigation, the department may file a civil action to prevent shipment of the affected goods but only a court has the authority to issue an order prohibiting shipment.
When informed of its contractors’ violations, Beyond Yoga agreed to make good on its contractors’ legal obligations and pay $582,317 in back wages and an equal amount in damages. In an effort to improve compliance in their product supply chain, Beyond Yoga executives reached an enhanced compliance agreement with the division. That calls for updating the company’s code of conduct for garment contractors. The agreement also requires full compliance with the Fair Labor Standards Act, as well as establishing a monitoring program and directing all contractors to display information for workers to know how to file confidential complaints of potential labor violations, including through Beyond Yoga’s worker hotline.
“Garment workers are often subject to stringent production requirements and receive some of the lowest wages in the country,” said Wage and Hour administrator Jessica Looman, who noted that garment workers are often subject to stringent production requirements but receive some of the lowest wages in the U.S. In addition, the industry’s employment model involves multiple layers of contractors and subcontractors and leaves workers vulnerable to wage theft and exploitation, Looman noted.
The case is meant to show that the Wage and Hour Division will hold employers across the supply chain accountable “to ensure that workers receive the pay they have earned and the rights they are afforded by the law,” Looman said.
The Office of the Solicitor obtained a consent judgment in the U.S. District Court for the Central District of California against the Good Cash and Premium Apparel entities and its owners. The judgment requires that Good Cash and Premium Quality Apparel pay $200,000 in civil money penalties for its willful Fair Labor Standards Act violations. Good Cash has faced penalties from federal authorities in the past. In 2021, the division cited Good Cash for similar violations and recovered $29,413 in back wages for nine workers and assessed $3,921 in penalties in a separate investigation.
Last year a survey of 50 Southern California garment-sewing contractors and manufacturers that was conducted by the Wage and Hour division revealed violations in 80 percent of cases. That resulted in the recovery of more than $892,000 in back wages and liquidated damages for 296 workers.
In response to the situation, a Beyond Yoga spokesperson issued the following statement Thursday, “At Beyond Yoga, we are committed to responsible sourcing and respect for worker rights across our operations. We cooperated with the US Department of Labor to address the issues raised in their investigation, proactively funding the payment [on behalf of the contractors] of all outstanding overdue wages and adopting enhanced vendor compliance requirements for our supply chain. Going forward, Beyond Yoga will continue to explore with the Department of Labor and state authorities further actions the company can take to help support an improved and more compliant apparel sector in the Los Angeles area.“
Editor’s Note: This article was updated on Jan. 4 at 1:20 pm.
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