GRAND RAPIDS, Mich. (Legal Newsline) - A federal magistrate judge on Wednesday will hear arguments that the Department of Labor is ruining a Michigan-based company's business, in pursuit of a child labor investigation that has yielded no charges so far.
Labor wants to be able to visit the sites of clients of Forge Industrial Staffing, a move that Forge says will damage its reputation and put other companies at risk. Forge supplies temporary workers to nearly 600 businesses in Michigan and Indiana.
But a New York Times article from earlier this year quoted a former worker who said she was underage at the time of her placement and that the company at which she worked didn't care. Forge has noted in court documents that the woman lied about her age.
It kickstarted an investigation by the Department of Labor, with which Forge mostly complied. But it refuses to give out information requested by Labor on its corporate clients for fear of investigators turning up on their sites.
"Forge seeks to control, delay, and hinder the Acting Secretary’s investigation out of a concern for its public image and that of its clients. This is not a permissible reason to avoid enforcement of a subpoena and the production of the information sought here," attorneys for Acting Secretary of Labor Julie Su wrote Nov. 28.
The information is crucial because Forge is a staffing agency – the employees do not perform work at Forge, but rather at Forge’s clients’ facilities. The identifies of Forge’s clients are essential to determine where the work is being performed, what industries employees are working in, and the nature of the work being performed.
"This information also is key to determining whether employees are working in potentially hazardous jobs and employee work hours."
Forge is fighting Labor's motion to enforce the subpoena, filed in Grand Rapids federal court. Though the sides reached an agreement to drop the matter in October, days later Labor reneged, and it's now up to Magistrate Judge Phillip Green to decide whether the information is relevant to the investigation.
"(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."
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.
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."