On December 28, 2016, the Department of Labor (DOL) filed a complaint with the DOL Office of Administrative Law Judges seeking debarment of a contractor for violation of the Service Contract Labor Standards (formerly the Service Contract Act). The contractor, Restaurant Associates LLC, runs the cafeteria in the Dirksen Senate Office Building. Even though Restaurant Associates won a seven year contract extension in December 2015 to continue operating the cafeteria, the company would be prohibited from bidding on future government contracts but would be permitted to retain that contract through the extension.
The DOL’s investigation began in July when they first alleged that Restaurant Associates violated the SCA by misclassifying hundreds of workers. However, what makes this case particularly interesting is that the company had no history of previous SCA violations and fully cooperated with the DOL investigation. In complying with the DOL investigation, the company agreed to and did pay $1,008,302 in back wages for 674 cafeteria workers. Despite paying the back wages, the DOL is now seeking to debar the contractor.
Perhaps the DOL is seeking debarment based on the circumstances surrounding the DOL investigation. The investigation first began after a complaint was submitted to the DOL alleging that Restaurant Associates unlawfully changed worker job classifications to avoid giving raises that were contained in the December 2015 contract renewal. After the investigation, the DOL found that the company had improperly classified workers both by paying them for lower-paying jobs than they actually performed and by requiring employees to work prior to their scheduled starting times without compensation.
This will be an interesting case to follow as it develops.
About the Author:
Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.
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