Detroit Restaurant Owner Accused of Wage Theft By Federal Authorities

In a recent development stemming from Detroit, the owner of a Livonia Leo’s Coney Island franchise with a checkered record of wage theft is once again under federal scrutiny. Handling the case is the U.S. Department of Labor, which alleges the owner has been underpaying his employees.

Consent Agreement with Department of Labor

Leo’s Coney Island, a franchise operated by Sterling Ponds Plaza LLC and Kyriakos ‘Ken’ Vlahadamis, the restaurants’ co-owner, has consented to an agreement with the department. This detail was confirmed by the labor department officials. Further, an injunction has been initiated for its outlets situated in Clarkston, Sterling Heights, Dearborn, and Livonia. The injunction impels them to honor accurate timecards and pay the necessary overtime when applicable.

The Preliminary Injunction and Ensuing Regulations

As part of the injunction passed by U.S. District Judith E. Levy last month, Vlahadamis has further agreed not to communicate with employees regarding ongoing lawsuits nor retaliate against any member who collaborates with the investigation led by the Wage and Hour Division of the department.

Decrying the negligent behavior, Regional Solicitor of Labor Christine Heri stated the necessity of this court action to ensure Vlahadamis and his Leo’s franchises adhere to the Fair Labor Standards Act’s (FLSA) mandated records. She also emphasized the injunction’s crucial aspect, compelling the defendants to inform their workers about their rights in discussing the case with department officials sans fear of retaliation or bias.

Contempt for Violating Previous Court Order

Apart from these directives, the labor department has also requested the court to consider Vlahadamis accountable for civil contempt. This pertains to violations of a 2018 court order that prohibited infringement of the Fair Labor Standards Act. Recent investigations unearthed that Vlahadamis maintained two intricate sets of time cards. One set reflected the regular working hours, with the other representing overtime.

Investigators reported that Vlahadamis had a tendency to destroy overtime timecards and pay employees at standard rates for all hours clocked, in violation of the legal requirement to pay time-and-a-half for more than 40 hours worked in a week. A verdict issued in 2018 by the same court had debarred Vlahadamis and Leo’s from committing future FLSA violations, including those concerning overtime and documentation.

Measures Taken Against the Violations

Director of the Wage and Hour Division, Timolin Mitchell expressed her disappointment at the findings. Despite the 2018 court order prohibiting him from wage violations, Vlahadamis has continued to deny employees their full wages by not paying overtime and neglecting to maintain required payroll records.

His refusal to comply with the law has resulted in significant harm to his dedicated employees, who have been cheated of their rightful earnings. The department’s Office of the Solicitor filed for a temporary restraining order on July 8 to prevent further violations, which was approved by the court on July 15.

About Leo’s Coney Island

Established in 1914, the first Leo’s Coney Island franchise opened in 1982 in Farmington Hills. The company began offering franchising opportunities in 2005. Initially starting with a simple menu featuring burgers, fries, and Greek salads, it has expanded to include a variety of Greek specialties and breakfast items. Today, there are over 70 Leo’s Coney Island locations operating in Michigan, with the case at hand specifically pertaining to four franchises co-owned and managed by Vlahadamis.