By: Lindsay Hesketh
While investigating defendant La Piedad’s FLSA compliance, the Department of Labor subpoenaed, among other things, documents with the names and addresses of other businesses owned by defendant’s shareholders. La Piedad informed the DOL that it did not have responsive records. Rather than investigate that response, the DOL immediately moved for an order holding defendant in contempt. The district court rubber stamped the motion, granted it without a hearing, and didn’t hold the DOL to its burden of proof. On appeal, the Eighth Circuit admonished the lower court’s “misuse of the civil contempt power.” The court highlighted the DOL’s complete failure to meet its clear and convincing burden to show that defendant had custody or control over those documents and reversed the order. Acosta v. La Piedad Corp., No. 17-1845 (8th Cir. July 3, 2018).
The courts continue to protect employers from government overreach, but consider the cost. Here the employer had to pursue its rights to the court of appeals, all because the DOL couldn’t be bothered to issue its subpoena to the shareholders themselves.