Car wash operator ordered to pay $4.2 million

Delrahim had told his employees to work off the clock, court says


Delrahim

Delrahim

Agoura Hills car wash magnate David Delrahim has been ordered to pay $4.2 million in back wages and damages to more than 800 employees who work at his Southern California car washes.

The U.S. Department of Labor announced July 18 that the workers at Delrahim’s two dozen Southland car washes—including the Agoura Hills Car Wash on Canwood Street in Agoura Hills and the Las Posas Car Wash on Las Posas Road in Camarillo— will receive the back pay under a consent agreement reached with Delrahim and filed in Los Angeles federal court.

According to the complaint, Delrahim’s mostly Latino employees were required to report to work at a certain time but directed not to clock in until customers arrived. And when business slowed down they were told to clock out but remain on the job.

The charges go back to 2013. The initial complaint was filed in June 2016.

“This is a major win for hundreds of employees systematically abused by one of Southern California’s largest car wash operators,” Juan Coria, the labor department’s regional administrator in San Francisco, said in a statement.

Some employees will receive more than $10,000 in back wages, the labor department said.

Evidence tampering

In August 2016, investigators requested that the 58-year-old Delrahim produce evidence such as surveillance footage, text messages and emails that related to employee work hours, wages, schedules, guidelines and gross business income. The defendants failed to provide the requested material.

Court documents showed that Delrahim and his company manager, Martin Lizarraga, admitted they deleted emails and texts— and that company surveillance footage was not stored beyond 30 days. The defendants testified that the deletions were a regular occurrence and not a deliberate attempt to rebuff the Department of Labor’s request. Their lawyers stated that the video footage was “too burdensome and expensive to retain.”

Retired judge Rosalyn Chapman was appointed by the court to evaluate the claims. She ruled that Delrahim had purposely destroyed video evidence and that Littler Mendelson, Delrahim’s attorney, was “deliberately and willfully stonewalling on discovery.”

Employee statements

Last November, Littler Mendelson submitted signed declarations from 37 car wash employees who stated they had never worked off the clock. But prosecutors accused the law firm of using intimidation tactics and poor ethics by coercing the workers to sign the documents in the fear they might lost their jobs.

The government called for sanctions against Delrahim and his associates for a “failure to follow even the most basic rules” of legal practice and a “wanton destruction” of evidence.

The signatures were later thrown out by the presiding judge, Fernando Olguin, who said the manner of their collection was improper. None of the employees were provided copies of the documents they signed, and many of them could not read English, the language in which the documents were written.

Littler Mendelson was ordered to send a notice in English and Spanish to each of Delrahim’s 800 workers to inform them that they could refuse to talk to Delrahim’s lawyers without fear of reprisal.

Delrahim’s defense team provided a written statement to The Acorn in March that said the company does not comment on client litigation, but Rebecca Aragon, Delrahim’s attorney at Mendelson, claimed in court documents that the employees suffered no harm or damage as a result of the alleged nonpayment and that workers had no claim to the back pay if they are still employed by Delrahim’s companies.

“Our decision did not admit any wrongdoing on our part, but will enable the leaders and employees of our business to focus their time and effort on business instead of a costly civil trial,” Delrahim spokesperson Eric Rose said in statement to The Acorn.

In a July 5 letter to the editor in The Acorn, Delrahim touted a commitment to diversity in his hiring practices but did not address the issue that he required employees to work off the clock.

“As a successful American business person who emigrated from Iran in the late 1970s, I hold dearly the legal and ethical protections of all people’s rights to work and live without enduring bias and bigotry,” Delrahim said in his letter.

Under the July 18 settlement, Delrahim will be monitored for one year by a court-appointed inspector to make sure he honors the rights of his employees under the federal Fair Labor Standards Act.

“The companies will continue to implement safeguards, training, and audit procedures at several facilities,” Rose said.

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