GRAND RAPIDS, Mich. (Legal Newsline) - A company hoping to show the Department of Labor is wrecking its business with an investigation that would involve its clients has gotten very little help from a federal judge.
Michigan judge Paul Maloney on Nov. 19 "largely" adopted the recommendations of a magistrate judge, finding Forge Industrial Staffing has not shown it will be irreparably harmed if the DOL starts contacting its clients.
Forge sends temporary employees to nearly 600 companies in Michigan and Indiana but has lost 17 clients since a 2023 New York Times article kickstarted the DOL's probe into whether it is providing underage workers and/or committing other labor violations.
The clients Forge has lost account for $9.5 million of its annual revenue. It felt if the DOL were allowed to inspect its clients' workplaces to ask about Forge temps, it would lose even more.
"It seems that the damage has already been done, and considerable time has passed since the article's publication," Maloney wrote.
"Further, Forge does not explain how providing its client information will add to previous losses. Regarding the last two factors, the DOL's interest in enforcing the (Fair Labor Standards Act) mirrors the public's interest; these two factors also do not favor a stay."
The DOL wants access to a list of Forge's clients to determine whether employees provided by Forge are of age and are being compensated fairly. Forge says having federal investigators roaming its clients' facilities would ruin its reputation.
It's an investigation that was fueled by a New York Times article and is overseen by acting Labor secretary Julie Su, who has failed to win confirmation in the U.S. Senate but still gets to head the agency.
The New York Times published an article in February 2023 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.
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.
U.S. Magistrate Judge Phillip Green rejected Forge's complaints in a February report and recommendations, which permitted the DOL to enforce its subpoenas.
Green wrote Forge "offers nothing to suggest" providing the client list would be burdensome according to the U.S. Court of Appeals for the Sixth Circuit.
"Instead, Forge argues that the Court should consider 'burden' in the form of embarrassment and interference with client relationships," Green wrote.
"But Forge is unable to cite any authority for the proposition that this is the type of burden the Court may consider, and the undersigned (Green) has found none."
Maloney agreed with Green on everything except Green's recommendation Forge should have to pay the DOL's legal costs for challenging the subpoenas. Maloney said he isn't convinced Forge has a likelihood of prevailing on the merits.
"(I)t is improbable that the circuit would expand the current subpoena enforcement jurisprudence to account for potential economic harms to a business," Maloney wrote.
"As the DOL points out, Forge could not cite any pointed authority in support for its view, and Forge itself acknowledged as much in a footnote... Forge's financial burden argument is a poor fit in this context."