USDOL Orders Tinian Dynasty To Pay Civil Penalty

May 27, 2012

In a 26-page order that attacked the defendant's attorney, Administrative Judge Jennifer Gee affirmed that the US DOL's Wage and Hour Division's order that that Hong Kong Entertainment (Overseas) Investment Ltd, Tinian Dynasty Hotel and Casino, pay $191,400 in civil penalties for labor violations.

An administrative law judge in San Francisco granted a motion for a summary decision on May 18 affirming the full $191,400 in civil money penalties assessed by the department against Hong Kong Entertainment (Overseas) Investments, Ltd. and its president, Kwan Man. The ruling, which follows an investigation by the department's Wage and Hour Division into pay practices at Tinian Dynasty Hotel and Casino, confirmed Wage and Hour's determination that the employer's violations were both repeat and willful, and therefore subject to the civil money penalties as assessed. Tinian Dynasty Hotel and Casino is one of the largest private-sector employers in the Commonwealth of the Northern Marianas Islands. The investigation found the employer withheld the overtime earnings from 348 employees when they failed to pay these workers over four bi-weekly pay periods. The back wages were subsequently paid in full. "We are very pleased with this decision," said Ruben Rosalez, acting regional administrator of the division's Western Region.
As has been reported here for years, the Tinian Dynasty and Casino has an ongoing practice of paying the foreign employees regular wages late and withholding their overtime pay. The Tinian Dynasty's excuse for violating the FLSA was that they do not always have "enough money on hand" to pay employees in a timely manner. The judge stated:
If a venture is not profitable within the bounds of the law, that is a reason to either change or close the business, not to ignore statutory responsibilities and expect the government to let those violations slide.
The decision also outlines how only overtime wages are affected by the FSLA and regular wages are not:
The Respondents make a lengthy argument that the actual amount of overtime HKE owed workers was only $87,486.56, because the rest of the $309,816.21 was delayed regular wages, no FLSA minimum wage applies in CNMI, and so 29 C.F.R. § 778.315 cannot require payment of regular w~ges in order to comply with overtime. (Respondents' Opposition to MSD, pp. 28-34, 36-38.) It is of course not disputed that Section 6's minimum FLSA wage did not apply to workers in the CNMI at the time of these violations. (See RX H, p. 62; Plaintiffs Reply to Opposition to MSD, pp. 18-19; RX L, p. 115.). However, 29 C.F.R. § 778.315 makes no reference to and does not rely on minimum wage requirements in any way. Rather, it establishes that overtime payments are not considered "paid," unless the amount owed to the employee in "straight time compensation" for the regular, non-overtime hours worked, has been paid according to the worker's contract.24 29 C.F.R. § 778.315. Thus, the Respondents could not have avoided the violations in 2007, by paying the workers just the $87,486.56 owed in overtime, as 29 C.F.R. § 778.315 means that overtime requirements can only be satisfied once regular wage obligations are met.25 Because of Section 778.315, compliance with the FLSA's overtime provisions required payment of the full $309,816.21, even though that majority of that amount was not originally overtime wages.
Clearly, the Tinian Dynasty has no conscience and no moral compass to make such an argument. Who would want to work for such an employer!?

The complaint was initiated in 2007, five years ago. It was disclosed that 348 employees were impacted by Dynasty's failure to pay workers on time. It appears that the Dynasty got off with a much reduced fine than could have been imposed. The order states:
District Director Terence Trotter determined that only half of the possible $1,100.00 civil money penalty per violation should be assessed against the Respondents. (Trotter Declaration, ~ 16; 29 C.F.R. § 578.3(a).) This determination granted the Respondents considerable mitigation of the penalty because of the six years that had passed between
violations and because the Respondents had signed the 2007 Compliance Agreement.
The order outlines the timeline and how legal maneuvering can hold off justice:
On January 26, 2010, the Plaintiff filed an Order of Reference with the OALJ initiating these proceedings against Respondents Raymond Chan and HKE. The Plaintiffs filed an Order of Reference against Respondent Kwan Man on March 22, 2011.

A hearing on the claims against only Respondents Raymond Chan and HKE, was originally scheduled for December 15, 20 I 0, but I granted Plaintiffs unopposed motion to continue the hearing in this matter to March 30, 2011, or as soon as was practicable thereafter, as the parties required additional time to conduct discovery. The parties filed a stipulation to consolidate the civil money penalty claims against Respondents HKE and Raymond Chan and Respondent Kwan Man on April 15, 2011, which I granted on April29, 2011. The hearing in the consolidated cases was subsequently re-scheduled for March 20, 2012, to March 22, 2012.

On February 1, 2012, the Plaintiff filed a motion for summary decision ("MSD") against the Respondents, and Respondents filed a motion for partial summary decision. On February 6, 2012, I issued an order vacating the hearing and establishing a briefing schedule for responses to motions for summary decision and partial summary decision. The Respondents filed an opposition to Plaintifrs motion for summary decision and a cross motion for summary decision on certain issues on March 7, 2012. I granted Plaintiffs request for leave to file a reply memorandum on March 28, 2012, and received the Plaintiffs reply on April 9, 2012.
The order discusses a previous case against the Dynasty for failure to pay wages in full and on time. In 2002 the employers signed a consent judgement agreeing not to "continue to withhold the payment" of $591,535.02 in "unpaid overtime pay hereby found to be due under the FLSA to 436 [HKE] employees for the period from February 6, 1999, to February 9, 2001."

The judge did not hide her disgust with the arguments presented by the defendant, as evidenced in numerous remarks in her order. Comments included:
"I will give Respondents' Counsel a sizeable benefit of the doubt and will assume that this argument was made based on deeply flawed legal research rather than a deliberate attempt to mislead the court."

"I would ask Counsel to consider seriously the potential repercussions that could ensue were he to make such disingenuous arguments before a court with the ability to impose sanctions."

"Again, the Respondents have put forth an argument that requires ignoring basic legal
principles, this time about the interpretation of contracts."

"Like so many of the Respondents' objections, I find this one was also frivolous and does
not prevent me from entering a partial summary decision in the Plaintiffs favor."
It appears that the case does not address the Tinian Dynasty's more recent wage theft. It is unknown if there is another DOL case filed against the employer.

A hearing is scheduled for August to determine the degree of control over financial controller Raymond Chan. The judge wrote:
Because the civil money penalties were assessed against HKE, Mr. Kwan, and Mr. Chan jointly, and Mr. Chan's status cannot be resolved through summary decision, I cannot order payment of the civil money penalties until his status is determined.
The hearing will take place on September 6, 2012 in San Francisco.

The Tinian Dynasty also owes the CNMI Government over $30 million in back taxes. Wouldn't that be a huge help for the dying Commonwealth Health Center. Has the CNMI Government gone after this employer to collect the millions in back taxes? If not, why not.


Anonymous said...

Can citizens sue a company to pay the taxes they owe? if yes we need to sue these crooks. That's a pile of cash we need now.