Two Sacramento residents have been forced to cough up $851,575 in unpaid wages due employees of a string of adult care homes and are enjoined from further violations of the federal Fair Labor Standards Act.
George Hall and his former wife, Estela Hall, along with Jasmine Hall Inc., and Hall Care Homes Inc., must pay the U.S. Department of Labor in three installments between now and Sept. 30, 2013. The department, in turn, will pay 52 employees or former employees the back wages plus interest.
According to court papers, an investigation initiated by the department in 2004 revealed that the Halls had been, since at least 2002, paying employees less than minimum wage, paying them for only a third of the hours they worked and failing to pay them overtime for more than 40 hours worked in a week.
The probe also turned up deplorable working conditions for the employees, who live most of the time at the home where they work, the papers say.
During the course of the investigation, the papers relate, "the investigator was consistently informed by employees, former employees and even supervisors that the employees worked long hard days, were on-duty at all times, were not free to leave the care homes, were forced to share bedrooms with multiple other employees, had no privacy, had no scheduled off-time, and were not paid for extensive sleep interruptions known to (the Halls), yet were only paid for eight hours of every 24-hour shift."
The Labor Department sued the Halls on June 28, 2005, in Sacramento federal court, and the dispute dragged on for seven more years. Finally, a non-jury trial began before U.S. District Judge Garland E. Burrell Jr. on June 20. On Tuesday, the trial's sixth day, the parties announced they had reached a settlement.
In a brief filed a week before the trial started, defense lawyers said the case "turns on a single, simple question: Did Jasmine Hall Care Homes have a 'reasonable agreement' with its residential care aides (RCAs), qualifying it for the home worker's exemption" set forth in federal law.
The exemption provides that, as long as an employee who resides on an employer's premises may engage in personal pursuits when not working, "any reasonable agreement of the parties which takes into consideration all of the pertinent facts will be accepted" because it is "difficult to determine the exact hours worked."
"The evidence will show that there is such an agreement in this case," and it covers not just compensation but living arrangements, defense papers say.
But the Labor Department was adamant in a brief filed the same day that "no putative contract or agreement can override the hours-worked principles" embodied in the law. "Rather, employment contracts and agreements are subject to the applicability of these principles."
The eight care facilities operated by the Halls, all in the city or county of Sacramento, "each serve as a group home for developmentally disabled adults with intensive needs, often with multiple diagnoses such as schizophrenia and behavior disorders," the department's court papers say. The residential care aides provide most of the client care. They also do the cooking and serve the meals, and do the housecleaning and laundry.
The Halls insist in court papers that their agreement with employees is reasonable. They say the employees "are provided with free housing, free food, medical and dental coverage, and a salary. They live in well-maintained homes in Sacramento's residential neighborhoods, one of which has a brook flowing through the backyard. They (each) care for a small number of clients, most of whom work outside the home, but who need assistance with some of the routine tasks of everyday life."
"In a more just world," the Halls' lawyers declared in a trial brief, "Jasmine Hall would be celebrated for providing a home for clients who are largely unwanted by society, while providing good jobs for people who have few other alternatives. The (Labor Department) instead takes the position that this worthy institution must be destroyed. Fortunately, in this case, the law and justice are aligned: the agreement between Jasmine Hall and its RCAs is reasonable under (statutory and case law), and that ends the case."
Those strong words notwithstanding, the case ended with the Halls agreeing to pay back wages and accepting an injunction against them that strictly regulates all personnel practices and policies.