1 Complaint - Allied Property

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UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------- THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor,

Plaintiff, v.

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COMPLAINT

Civil Action No.

15-cv- ALLIANCE PROPERTY SERVICES, INC.; ALLIANCE PROPERTY SERVICES, PA, INC.; SECURE ASSETS FIRST, INC.; IMPERIAL PROPERTY SERVICES, INC.; and MICHAEL MCCAFFREY, Individually and as Owner,

Defendants.

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Plaintiff, THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor

(the Secretary), by and through undersigned counsel, brings this action under Section 16(c)

and Section 17 of the Fair Labor Standards Act of 1938, as amended (29 U.S.C. 201, et seq.)

(the Act or the FLSA), alleging that defendants violated Sections 6, 7, 11(c), 15(a)(2),

15(a)(3), and 15(a)(5) of the Act to recover back wages, liquidated damages, compensatory

damages, punitive damages, and to enjoin acts and practices which violate the provisions of the

FLSA, and to obtain other appropriate relief.

JURISDICTION AND VENUE

1. Jurisdiction over this action is properly conferred upon this Court by Section 17

of the FLSA, 29 U.S.C. 217, and 28 U.S.C. 1331 and 1345.

5:15-cv-226 (GLS/ATB)

Case 5:15-cv-00226-GLS-ATB Document 1 Filed 02/26/15 Page 1 of 14

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2. Venue is proper in the United States District Court for the Northern District of

New York because a substantial part of the events or omissions giving rise to the claims herein

occurred in this District.

FACTUAL ALLEGATIONS The Parties

3. Plaintiff, THOMAS E. PEREZ, Secretary of Labor, United States Department of

Labor, is vested with authority to file suit to restrain violations of the FLSA and recover back

wages and liquidated damages and is the proper plaintiff for this action.

4. Defendant ALLIANCE PROPERTY SERVICES, INC. (ALLIANCE

PROPERTY SERVICES) is, upon information and belief, a corporation organized under the

laws of the State of New York having its principal office and place of business at 151 Northern

Concourse, Syracuse, NY 13212, within the jurisdiction of this court, where it is engaged in the

business of property preservation and inspection services for foreclosed properties in New York,

Pennsylvania, Massachusetts, and Connecticut.

5. Defendant ALLIANCE PROPERTY SERVICES, PA, INC. (ALLIANCE

PROPERTY SERVICES, PA) is, upon information and belief, a corporation organized under

the laws of the State of Pennsylvania, having its principal office and place of business at 151

Northern Concourse, Syracuse, NY 13212, within the jurisdiction of this court, where it is

engaged in the business of property preservation and inspection services for foreclosed properties

in Pennsylvania.

6. Defendant SECURE ASSETS FIRST, INC. (SECURE ASSETS FIRST) is,

upon information and belief, a corporation organized under the laws of the State of New York

having its principal office and place of business at 151 Northern Concourse, Syracuse, NY

13212, within the jurisdiction of this court, where it is engaged in the business of property


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preservation and inspection services for foreclosed properties in New York, Pennsylvania,

Massachusetts, and Connecticut.

7. Defendant IMPERIAL PROPERTY SERVICES, INC. (IMPERIAL

PROPERTY SERVICES) is, upon information and belief, a corporation organized under the

laws of the State of New York having its principal office and place of business at 151 Northern

Concourse, Syracuse, NY 13212, within the jurisdiction of this court, where it is engaged in the

business of property preservation and inspection services for foreclosed properties in New York,

Pennsylvania, Massachusetts, and Connecticut.

8. The defendant businesses referenced in paragraphs 4 through 7 above

(collectively the corporate defendants) have regulated the employment of all persons employed

by them, acted directly and indirectly in the companies interest in relation to the employees, and

thus are employers of the employees within the meaning of Section 3(d) of the Act.

9. Defendant MICHAEL MCCAFFREY is, upon information and belief, the

President and owner of defendants ALLIANCE PROPERTY SERVICES, ALLIANCE

PROPERTY SERVICES, PA, SECURE ASSETS FIRST, and IMPERIAL PROPERTY

SERVICES, and is in active control and management of all the corporate defendants. Defendant

MICHAEL MCCAFFREY has authority to and does hire, fire, supervise, set the hours and

compensation of employees, and otherwise acted directly and indirectly in the interest of all of

the corporate defendants in relation to employees. He is thus an employer of the employees

within the meaning of Section 3(d) of the Act. Defendant MICHAEL MCCAFFREY resides in

Onondaga County, New York, within the jurisdiction of this Court.


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Defendants Are an Enterprise Engaged in Commerce

10. The business activities of Defendants, as described herein, are related and

performed through common control for a common business purpose and constitute an enterprise

within the meaning of Section 3(r) of the Act.

11. Defendants are engaged in preserving and maintaining foreclosed properties

across New York and other neighboring states. Field employees of Defendants primarily

changed locks, mowed lawns, winterized homes, and did light construction work on the

foreclosed properties. Field employees of Defendants performed the same work for each of the

corporate defendants.

12. Field employees of Defendants often received paychecks from two of the

corporate defendants in the same pay period without performing separate work for each

corporate defendant.

13. The corporate defendants have common and centralized operational management

and ownership by individual defendant Michael McCaffrey, who, upon information and belief, is

the president and owner of all corporate defendants.

14. Defendants have employed employees listed in Exhibit A in and about their

places of business in the activities of an enterprise engaged in commerce or in the production of

goods for commerce, including employees handling, selling, or otherwise working on goods or

materials that have been moved in or produced for commerce. These goods include but are not

limited to locks, lawn mowers, generators, compressors, and light construction materials. Upon

information and belief, the enterprise has had an annual gross volume of sales made or business

done in an amount not less than $500,000 (and for at least one year, in excess of $6 million) for

the period covered by this Complaint. Therefore, the employees are employed in an enterprise


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engaged in commerce or in the production of goods for commerce within the meaning of Section

3(s)(1)(A) of the Act.

Defendants Pay and Recordkeeping Practices

15. At all relevant times prior to approximately May 2013, Defendants field

employees typically worked an average of over 60 hours per week and were not paid overtime at

one and one-half their regular rate for hours over 40.

16. At all relevant times between approximately May 2013 and April 2014,

Defendants field employees that were hired prior to May 2013 typically worked an average of

over 60 hours per week and were not paid overtime at one and one-half their regular rate for

hours over 40.

17. At all relevant times prior to approximately April 2014, Defendants paid many

field employees by two checks for bi-weekly pay periods in which the employees worked in

excess of 80 hours: a payroll check from ALLIANCE PROPERTY SERVICES or IMPERIAL

PROPERTY SERVICES for the first 80 hours of work that pay period, paid at the employees

regular hourly rates; and a separate check drawn from SECURE ASSETS FIRST or ALLIANCE

PROPERTY SERVICES, PA for hours worked in excess of 80 that pay period, also paid at the

employees regular hourly rates.

18. Employees did the same work and reported to the same supervisors regardless of

which corporate defendant issued the paycheck.

19. At all relevant times prior to approximately April 2014, Defendants paid at least

eight field employees in cash at the employees regular hourly rates for hours worked in excess

of 80 hours each bi-weekly pay period. Defendants attempted to conceal the cash payments by


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failing to keep any records of cash payments or the number of hours employees were paid in

cash.


one employee off the payroll with one check for all hours worked whereby the employee was

paid the same regular hourly rate for his first 80 hours of work each bi-weekly pay period as for

the hours worked in excess of 80 that pay period.

21. At all relevant times prior to approximately April 2014, Defendants did not pay

most field employees one and one half times their regular rate of pay when they worked in

excess of 40 hours per week but rather paid their regular rate for all hours worked.


one field employee a set salary per week regardless of the number of hours worked Monday

through Friday of the week.

23. As a result of receiving a set salary for all hours worked Monday through Friday

of the week, Defendants did not pay this field employee one and one half times his regular rate

of pay when he worked in excess of 40 hours per week.

24. At all relevant times prior to approximately April 2014, Defendants

automatically deducted a half-hour for lunch every day even though some field employees did

not take a lunch break.

25. At all relevant times prior to approximately April 2014, Defendants did not pay

some field employees for all their hours worked because employees were not authorized to work

beyond a set number of daily hours even though Defendants knew field employees were working

these hours.


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26. Defendants failed to pay some field employees any wages for their final one or

two weeks of work.

27. As a result of not receiving any wages for their final one or two weeks of work,

Defendants did not pay some field employees at least the applicable statutory minimum rate

prescribed in Section 6 of the Act, 29 U.S.C. 206(a).

28. As a result of not receiving any wages for their final one or two weeks of work,

Defendants did not pay some field employees one and one-half their regular rate of pay as

prescribed in Section 7 of the Act, 29 U.S.C. 207(a).

29. Prior to approximately January 2013, Defendants did not maintain accurate

records of their employees daily or weekly hours. Defendants did not create or maintain

adequate and accurate records of the times that their employees started and stopped work each

day, or the total regular and overtime hours that their employees worked each week. Instead,

Defendants payroll records showed that most field employees worked 80 hours every two-week

pay period, regardless of the actual number of hours that they worked.

Defendants Retaliation

30. In or about April 2012, the Wage and Hour Division of the U.S. Department of

Labor (WHD) began an investigation into the employment practices of Defendants under the

Act.

31. On or about September 5, 2013, WHD investigators held an initial conference

with Defendants at their office to discuss Defendants payroll, timekeeping, and employment

practices.

32. As part of its investigation, WHD investigators spoke to employees of Defendants

prior to the September 5, 2013 initial conference.


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33. Upon information and belief, Defendants were aware that employees had spoken

to WHD investigators.

34. On or about September 16, 2013, Defendants discharged an employee, Jack Scott,

for the stated reason that he spoke to the Department of Labor.

FIRST CAUSE OF ACTION Violation of Sections 6(a) and 15(a)(2) of the FLSA, Failure to Pay Minimum Wage

35. The Secretary incorporates by reference and re-alleges the allegations in

paragraphs 1 to 34 of the Complaint.

36. Defendants willfully have violated the provisions of sections 6 and 15(a)(2) of the

Act by paying at least four of their employees employed in an enterprise engaged in commerce

or in the production of goods for commerce at rates less than the applicable statutory minimum

wage prescribed in section 6 of the Act, specifically by failing to pay employees any wages for

their final week of work.

37. Therefore, Defendants are liable for any unpaid minimum wages and an equal

amount in liquidated damages under section 16(c) of the Act or, in the event liquidated damages

are not awarded, unpaid minimum wages and prejudgment interest on said unpaid minimum

wages under section 17 of the Act.

SECOND CAUSE OF ACTION Violation of Sections 7(a) and 15(a)(2) of the FLSA, Failure to Pay Overtime



39. Defendants in many workweeks willfully have violated the provisions of sections

7 and 15(a)(2) of the Act by employing their employees in an enterprise engaged in commerce or

in the production of goods for commerce, for workweeks longer than those prescribed in section


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7 of the Act without compensating the field employees for their employment in excess of the

prescribed hours at rates not less than one and one-half times the regular rates at which they were

employed. Many field employees of Defendants regularly worked in excess of 60 hours each

workweek. Defendants compensated field employees at regular hourly rates for all hours that

employees worked in a workweek. Defendants did not pay any additional premiums of one and

one-half employees regular rates for hours worked by most field employees in excess of 40 in a

workweek.

40. Therefore, Defendants are liable for unpaid overtime compensation and an equal

amount in liquidated damages under section 16(c) of the Act or, in the event liquidated damages

are not awarded, unpaid overtime compensation and prejudgment interest on said unpaid

overtime compensation under section 17 of the Act.

41. As described herein, Defendants actions have been willful. For example,

Defendants attempted to simulate compliance by paying field employees for their hours worked

in excess of 40 in a workweek via paycheck from separate companies or in cash. Defendants

willfully have violated the Act since at least February 26, 2012.

THIRD CAUSE OF ACTION Violation of Sections 11(c) and 15(a)(5) of the FLSA



43. Defendants willfully have violated the provisions of sections 11(c) and 15(a)(5) of

the Act, in that Defendants failed to make, keep, and preserve adequate and accurate records of

their employees and of the wages, hours, and other conditions of employment which they

maintained as prescribed by the Regulations issued and found at 29 C.F.R. Part 516; more


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specifically, Defendants failed to keep adequate and accurate records of many of their

employees actual daily and weekly hours of work, and total weekly overtime payments.

FOURTH CAUSE OF ACTION Violation of Section 15(a)(3) of the FLSA



45. Defendants violated the provisions of Section 15(a)(3) of the Act by discharging

an employee because he filed any complaint or instituted or caused to be instituted any

proceeding under or related to this Act, or testified or was about to testify in this proceeding.

46. Therefore, Defendants are liable for back wages lost and an equal amount of

liquidated damages, compensatory damages, punitive damages and other equitable relief as

might be appropriate under Sections 16 and 17 of the Act.

WHEREFORE, cause having been shown, Plaintiff respectfully prays for judgment

against Defendants providing the following relief:

1. An injunction issued pursuant to Section 17 of the Act permanently restraining

Defendants, their officers, agents, servants, employees, and those persons in active concern or

participation with Defendants, from violating the provisions of Sections 6, 7, 11(c), 15(a)(2),

15(a)(3), and 15(a)(5)of the Act;

2. An order pursuant to Section 16(c) of the Act finding Defendants liable for unpaid

minimum wage and overtime compensation found due Defendants employees listed on the

attached Exhibit A and an equal amount of liquidated damages (additional minimum wage and

overtime compensation and liquidated damages may be owed to certain employees presently

unknown to Plaintiff for the period covered by this Complaint); or


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3. In the event liquidated damages are not awarded, for an injunction issued pursuant

to Section 17 of the Act restraining Defendants, their officers, agents, employees, and those

persons in active concert or participation with Defendants, from withholding the amount of

unpaid minimum wage and overtime compensation found due Defendants employees and

prejudgment interest computed at the underpayment rate established by the Secretary of Treasury

pursuant to 26 U.S.C. 6621;

4. An order compelling Defendants to reimburse the Secretary for the costs

of this action;

5. An order granting such other relief as the Court may deem necessary or

appropriate;

6. An order pursuant to Section 17 of the Act reinstating the employee

discharged in violation of the provisions of Section 15(a)(3) of the Act; and

7. An order pursuant to Section 17 of the Act for back wages lost, an equal

amount of liquidated damages, punitive damages and all other appropriate legal or

equitable relief as may be necessary and appropriate for violations of Section 15(a)(3) of

the Act.


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DATED: February 26, 2015 New York, New York s/ M. Patricia Smith M. PATRICIA SMITH Solicitor of Labor s/ Jeffrey S. Rogoff

JEFFREY S. ROGOFF Regional Solicitor s/ James R. Wong JAMES R. WONG

James R. Wong Bar No: 517992 Trial Attorney U.S. Department of Labor, Attorneys for Plaintiff Secretary of Labor

U.S. Department of Labor Office of the Regional Solicitor 201 Varick Street, Room 983 New York, NY 10014 (646) 264-3646 (646) 264-3660 (fax) [email protected] [email protected]

Secretary of Labor, Plaintiff


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