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Chad Brown Must Pay $1.6M for Federal Labor Violations

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Chad Brown | Eclipse Sportswire/Breeders’ Cup

By T. D. Thornton

Chad C. Brown, who has won the Eclipse Award for Outstanding Trainer in each of the past three seasons, will pay a total of $1,617,673 in back wages, liquidated damages, and civil penalties after agreeing to a federal consent judgment for “willful violations of the Fair Labor Standards Act and the labor provisions of the H-2B non-immigrant visa program,” according to a United States Department of Labor press release issued on Wednesday.

The massive monetary outlay for back pay and fines that Brown was ordered to pay was the result of a three-year investigation by the U.S. Department of Labor’s Wage and Hour Division into Brown’s New York-based training business not paying overtime wages for all hours when employees worked more than 40 hours in a workweek and for failing to keep required time and payroll records.

According to the consent judgment signed by Brown and filed May 13 in U.S. District Court (Eastern District of New York), Brown, doing business as “Chad C. Brown Inc.,” admitted to violations that involved 150 stable employees between 2014 and 2017, primarily at Saratoga Race Course and Belmont Park.

By admitting the violations and agreeing to the consent order and its payment structure, Brown was able to avoid formal service of the original summons and civil complaint, which was filed in federal court Apr. 3 by R. Alexander Acosta, the U.S. Secretary of Labor.

A late Wednesday afternoon voicemail message left on Brown’s mobile phone asking for his side of the story did not yield a response prior to deadline for this article.

According to the original complaint, “Defendants failed to pay overtime to groomers and hot walkers for all hours worked in excess of forty in a week and falsified time records to conceal the actual hours worked by their employees. Defendants’ employees frequently worked in excess of forty hours each week, often performing extra tasks that required them to stay beyond their ostensible weekly schedules.

“However, Defendants failed to accurately track employees’ time and paid them for fewer hours than they actually worked. In addition, when calculating the premium pay owed for a particular week, Defendants failed to include the nondiscretionary bonuses they regularly awarded to certain groomers, as required by the Act and its regulations.

“Consequently, in addition to depriving their employees of overtime premiums for many of the hours worked beyond 40 in a week, Defendants did not pay the correct overtime premium. As a result of Defendants’ unlawful payment and record keep practices, 150 current and former groomers and hot walkers are owed unpaid wages under the Act.”

The civil complaint listed a “for example” instance of how Brown’s operation structured work schedules to avoid fair payment: “During the 2017 racing season, Defendants assigned a hot walker to work three races a week on top of the base schedule, which amounted to 61.25 hours of work per week. However, Defendants paid this hot walker for no more than 55 hours of work per week at a regular rate of roughly $11.09.”

To get around this, the complaint alleged, Brown and his assistants wrote up sham paperwork.

“Defendants did not accurately track employee work time and did not have a system for tracking when employees started and stopped working each day,” the complaint stated. “Instead, Defendants created falsified timesheets that consistently underreported the number of hours worked by hot walkers and groomers, contributing to underpayment. Defendants required groomers and hot walkers to sign blank time sheets. Defendants’ supervisors filled in daily and weekly hours after employees signed the time sheets. The hours filled in by supervisors on the timesheets were often incorrect and did not add up.”

According to the consent judgment’s itemized list of Brown’s 150 employees who are owed money, at least 10 of them are owed more than $10,000 in combined back wages and liquidated damages. The highest combined amount owed to an individual worker is $27,911.

“These legal actions demonstrate the U.S. Department of Labor’s commitment to take all steps necessary to ensure employees receive the wages that they have rightfully earned and that employers who violate laws do not gain an unfair advantage over law-abiding competitors,” the agency’s regional solicitor of labor, Jeffrey Rogoff, said in the press release.

The consent judgment requires Brown to designate a compliance officer for pay practices, implement and use an electronic timekeeping system to ensure accurate tracking of employees’ work hours, and to train supervisory employees on the proper federal labor requirements for employers.

It also contains a mandate that Brown shall not threaten or retaliate against employees named in the consent judgment or to “imply that adverse action will be taken against any person because of his or her receipt of funds due under the provisions of this Consent Judgment or the Act. Violation of this Paragraph may subject Defendants to equitable and legal damages, including punitive damages and civil contempt.”

 

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