GRAND RAPIDS, Mich. (Legal Newsline) - A company in the crosshairs of a child labor investigation is hoping a federal court will help protect its reputation as clients flee, while noting a "whistleblower" who kickstarted the probe lied about her age at least once.
Staffing company Forge Industrial stated its case in a Nov. 14 filing in Michigan federal court before Judge Phillip J. Green, where the U.S. Department of Labor is hoping to force the company to give up its client list. Forge has already given up the names and contact information of every person who worked for the company in the past three years and made available all employees for interviews, but says the DOL's subpoena goes too far.
"(T)he Department thinks it will be easier if it can show up at Forge's customer locations, announce that it is investigating child labor violations involving Forge employees, and interview workers," lawyers for Forge wrote.
"Forge is asking that the Court balance and weigh the Department's purported efficiency claim against the material, substantial harm that Forge will incur."
Clients are already breaking off their relationships with Forge, which says it is now struggling to break even despite not facing any child labor charges.
The story begins in the New York Times, which published an article in February on possible child labor violations in 20 different states. It quoted a former Forge employee, Nubia Malacara, who said a Forge client - Hearthside Foods - was knowingly employing minors.
"Hearthside didn't care," Malacara is quoted as saying, adding that Forge placed her at Hearthstone as a minor.
Fake IDs are a concern, Forge says. The company placed Malacara with Hearthside in 2011 for a three-day stint - the only job Malacara was placed into by Forge, the company says.
Malacara said her birthday was in November 1992, which would have made her 19. But 10 years later, Forge hired her to a full-time administrative position and she reported a birthday in 1995 this time. She resigned after less than a year.
She also used a different social security number than the one she used 10 years earlier. The United States Citizenship and Immigration Services says employers should accept documentation that "reasonably appears to be genuine."
Staffing agencies came under fire after a Hyundai worker had forged his ID and provided a phony social security card. His documents had been cleared by the federal vetting system E-verify.
"Employers like Forge must deal with the reality that underage workers will provide false information and present falsified documents in an effort to gain employment, and that bad actors are growing more sophisticated," Forge says.
"Faced with that reality, Forge invests significant time and effort to avoid inadvertently employing underage workers. In is 28-year history, Forge has never been accused of a child labor law violation."
Forge employees are periodically tested when the company intentionally sends "applicants" who are out of compliance with company policy to try to gain employment, the company says.
"In sum, based on an article from last February that quoted one former Forge employee in one of Forge’s offices involving one of Forge’s clients, the Department seeks the identification of every single client from every single Forge location in two different states, based on no claimed violations and nothing more than the stated purpose of determining whether Forge is complying with the FLSA," Forge says.
A month after the New York Times article, U.S. Rep. Hillary Scholten, a Democrat representing Grand Rapids (where Forge has an office), announced proposed legislation to increase penalties for violations of child labor laws.
The bill was a reaction to the New York Times story. Fellow Michigan Congressman Dan Kildee joined Scholten in the creation of the Child Labor Prevention Task Force.
Forge says the attention generated by the New York Times article and subsequent investigation has cost it 17 clients and about $9.5 million in annual revenue - all without a single formal violation of child labor laws.
"These losses have resulted in layoffs at Forge, and Forge's overall revenue with its existing clients is down approximately 40%, much more so than industry trends would dictate," the company says.
"As of last month, Forge is struggling to break even."