Dive Brief:
- At the U.S. Department of Labor's (DOL) request, a federal district court has blocked a shipment of clothing headed for retailer Charlotte Russe, the agency said in a statement.
- DOL determined during an investigation that Los Angeles garment manufacturer RK Apparel Inc.'s contactor, HDK Ave. Inc., committed minimum wage and overtime violations. It paid employees well below the federal minimum wage of $7.25 per hour, with some receiving pay as low as $4 per hour, DOL has alleged. It also required employees to work up to 58 hours per week but paid them only a piece rate, earning a flat amount per garment produced, and did not pay overtime when they worked more than 40 hours in a workweek.
- DOL invoked the Fair Labor Standards Act's (FLSA) "hot goods" provision and, although the company told the agency it would not ship the hot goods, it later did so, according to DOL. The court then issued a temporary restraining order preventing the company from shipping the clothing because they were effectively "hot goods," making them illegal to ship or sell via interstate commerce.
Dive Insight:
Whenever goods are produced in violation of the FLSA’s minimum wage, overtime or child labor provisions, the DOL can prevent those goods from being shipped in interstate commerce under FLSA's “hot goods” provision. The FLSA authorizes the agency to block the transportation, shipment, delivery or sale of goods produced by workers who are not paid the minimum wage or required overtime in the absence of an employer voluntarily correcting the violations.
Recent years have seen controversy regarding DOL's authority to invoke the provision, specifically in the agriculture industry, where goods can spoil while they wait for allegations to be resolved. Following a dispute with blueberry farmers in Oregon, President Barack Obama in 2014 signed a law making it more difficult for DOL to invoke the provision for perishable goods. The new law requires the Agriculture Secretary and the Labor Secretary to consult on restraining shipments or confiscating agricultural commodities for actual or suspected labor law provisions.
