John O’Brien is a veteran journalist and editor of Legal Newsline. The American Legal Record Podcast interviewed O’Brien last week regarding his recent article, “Company being crushed under weight of feds' child labor probe, despite no charges.”
That article is regarding Grand Rapids, Mich. company Forge Industrial Staffing which is “in the crosshairs of a child labor investigation” and hopes “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,” reported Legal Newsline.
American Legal Record Podcast Host Leyla Gulen (LG):
John, your article stemmed from a New York Times piece about an investigation into Forge. What can you tell us about the findings in your article?
John O’Brien:
The New York Times article sparked further investigation by the U.S. Department of Labor. The story described a 14 year old who was working construction jobs, a 15 year old who was packaging Cheerios, and a 13 year old day laborer, a kid who worked all night at an auto parts manufacturer and had to go to school at 6:30 in the morning, and couldn’t stay awake.
One of the workers quoted (in the NY Times article) said she was a staffer who was placed by Forge Industrial Staffing which, she said, was a company that “didn’t care” that she was under 18 years old at the time. So this got the attention of a lot of people and Forge all of a sudden found itself in the crosshairs of an investigation by the Labor Department.
LG:
So Forge is based out of Michigan and Indiana, and they’ve never had any allegations like these?
John O’Brien:
Yeah, no child labor allegations, and nine months into this investigation, there are still no formal child labor allegations.
LG:
But this story, it takes a little bit of a twist, because the girl that was quoted saying that they (Forge) didn't care that she was under age — well, essentially she lied about her age, produced documents lying about her age, and then worked for that company for three days and, later in life, came to work for Forge. Is that correct?
John O’Brien:
Yeah, her first stint there, she claimed she was born in 1991, which I think at that time would have made her 19 years old. That's when they placed her with whatever company, it's not exactly clear with whatever company she was placed with, but she claimed to be 19 years old, born in 1991. She worked there for three days.
Ten years later, she gets a job actually with Forge, not as a staffer being sent out to other companies, but to actually work for Forge itself. This time she said was born in 1995 and these stints were 10 years apart. So yeah, on one of those IDs she lied.
LG:
You really can't make this stuff up. This has created such a firestorm and clients have been fleeing Forge in droves. So they've lost a significant amount of their revenue because of just the bad press that they've been receiving. So this has done significant damage to their workforce. They've had to lay people off.
But let's talk about the legal aspects to this case, because now they're fighting against the (acting) U.S. Secretary of Labor, who is pushing this case forward.
Now, (Secretary of Labor) Julie Su, she was appointed by the President Biden. She does have a lot of opponents to her practices. She doesn't have a whole lot of fans as it relates to some of the Internet-based workforce, such as ride sharing drivers and things like that, based on some of her actions in California. We can discuss that later.
But in terms of the Forge case, she's really pushing in the pursuit of, what exactly? Because I think so as long as there's humans inhabiting this earth, they're all at one point or another going to lie about something, even when businesses do their due diligence on their workers. So, how much more can they do and why are they coming down so hard on Forge?
John O’Brien:
Your listeners might think this is a story about child labor violations. It's really a story about the lengths the government will go in the pursuit of headlines. Child labor is a huge talking point for a lot of political people.
The Department of Labor has conducted a bunch of interviews with people at Forge, but now they have issued a subpoena — actually they issued it months ago — that seeks permission to go to Forge's clients, the companies where the staffers are sent, so that they can conduct interviews with those staffers at the sites of Forge's clients.
Forge, obviously, does not want that to happen.
You couldn't have a worse blow to your business relationship than the U.S. Department of Labor showing up at a company with which you have a contract. These companies are facing no investigation, no allegation, but now all of a sudden they'll have Department of Labor investigators walking and looking through their plants.
So it's very unfair to those clients. The damage to Forge is real. They made their case November 14th in response to a motion to enforce the subpoena filed in Grand Rapids Federal Court earlier this year and they have lost 17 clients already since the New York Times article came out and that totals $9.5 million in annual revenue.
Forge has had to conduct layoffs and they had eight prospective new clients fall through since the Times story came out. So there also was lost revenue there.
Forge, in its brief, said the company is barely breaking even at this point.
LG:
So how can this all be? I mean, they're dealing with someone who is a proven liar. Whatever the case may be, if you're producing two different IDs with two different years of birth, can't you just classify somebody as a liar and move on?
John O’Brien:
You’d have to ask the Labor Department. They're the ones calling the shots. These are normally very hard cases to fight when you have the entire weight of the federal government on you. And just calling one person a liar, it's not going to convince a judge if the judge feels an investigation is warranted.
I was looking up the Labor Department's last budget request. They have a 14-and-a-half billion dollar budget and nearly 17,000 full time employees and, like with a lot of government agencies, when you face charges, you go before their administrative law judges, which a lot of companies have argued is not fair at all.
And it's actually the subject of a coming U.S. Supreme Court ruling in a SEC case.
LG:
Interesting. What is that case?
John O’Brien:
It involves a guy who faced charges from the SEC and is now challenging the fact that he was investigated, charged and judged all by the same agency.
If he's successful and the Supreme Court rules that this is unfair and he should be charged in a court, rather than by SEC employees, essentially the administrative law judges, then these companies can fight in federal court instead of in a federal agency.
LG:
What can you tell us about the judge who’s presiding over the Forge case?
John O’Brien:
He (Magistrate Judge Phillip J. Green, U.S. District Court, Western District of Michigan) was a lifelong government employee, for the most part. I think he had a stint in private practice in the 90’s, but for the most part, he's been an assistant U.S. attorney. He's been on the bench since 2014. So I would say that's a favorable draw for the Department of Labor. But you know, people like to predict what a judge is going to do based on his or her previous jobs. And that's just not always the case.
LG:
Let’s go a bit deeper into the subpoena. The Department of Labor says that it doesn't need to show probable or reasonable cause to take documents from companies. What's the remedy for the company to fight back against this?
John O’Brien:
The Department of Labor says they have investigatory powers granted to the secretary. Even though she is the acting secretary, she still claims to have these powers. The way you fight it is to say the subpoena is not relevant at all to what you're investigating.
Forge has said that claiming the right to visit clients is relevant to whether it has knowingly staffed them with underage workers would destroy the relevancy standard for subpoenas “forever.” Forge argues the Labor Department hasn't shown a single case in which it has been allowed all of a company's employment or client records.
Further, Forge has made available all employees for interviews on its turf.
LG:
So they're not hiding anything. They're being very forthcoming within reason.
John O’Brien:
Sure. I mean, you can interview people at Forge or you can interview them somewhere else. They're going to be the same age here or there. What’s the difference?
LG:
Can you paint a picture of the acting labor secretary, Julie Su, who is pushing this case?
John O’Brien:
Yeah. Julie Su, she was formerly the labor secretary in California. She sparked controversy there with her support for a law that required contractors, like the ride-sharing services you mentioned, to classify drivers as employees and not contractors. That way those employees and contractors would get sick leave other benefits that regular employees get.
LG:
Well, she also has been unable to win confirmation and has just been acting secretary, right?
John O’Brien:
Her nomination is stalled. They can't get the votes. Biden keeps her on as acting secretary and she pretty much is running the Labor Department like a formal secretary would.
LG:
Right, but shouldn't the fact that she is not a confirmed labor secretary hamstring her from some of her ability to do certain things?
John O’Brien:
Well, I'm sure plenty of companies agree with that. I'll stay out of that fight.
LG:
I'm just curious, though. I don't know what the law is as it regards an acting versus a confirmed secretary.
John O’Brien:
I guess we'll see. There's probably a challenge to it from some company somewhere that I haven't found just yet, but I can't imagine some of these companies want to take these actions lying down and that would be one way to convince a federal judge that her actions are inappropriate.
LG:
So where does this case stand now, and what are we going to see in the near future?
John O’Brien:
Well, last night, the Department of Labor filed a reply to Forge. I pulled a quote from it. We’ll be writing a story later. The labor department said that “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.”
That almost makes Forge’s argument. You have to protect your public image if you're a company. It has many clients and you have to protect your clients because you need their money.
So we have that reply. We have a hearing coming up on this. Whether there'll be a ruling during the hearing or Judge Green will wait to issue a formal written order before letting anyone know what he's thinking, we'll find out.
LG:
Well, we'd love to stay in touch with you and see developments on this story. And one quick thing before we go, I just wanted to reference an October agreement that you wrote about that the DOL backtracked on.
John O’Brien:
Yeah, they had come to a resolution in October. The emails are part of the record. The Department of Labor said they would drop this push to visit Forge’s clients if Forge would exchange the visits for packets of employee information, stuff from their applications, the actual IDs, stuff like that.
Forge says, “sure, that's perfect. All right, this is over.”
Six days later, an email comes in saying the acting secretary has taken the offer off the table. So the case continued, and here we are.
LG:
You've covered a lot of cases, and I imagine you cover a lot of cases that involve the labor department. Is this typical? Does that usually happen?
John O’Brien:
It's strange that an offer would be made. You would assume, and I can't say this for sure, that the offer was made without the consent of whoever is actually the decision maker. Because why would they offer it and change their mind six days later?
LG:
Now, what does this mean moving forward? If the Labor Department succeeds in their case, what does this mean for businesses across the country if people are going to lie about their age or anything else for that matter when they submit an application or give you a copy of their driver's license or ID?
John O’Brien:
Yeah, it's not great. I think the key thing regarding this case is that Forge relies on clients. They're trying to protect themselves. I mean, if a child labor subpoena is issued against a restaurant, the restaurant would be the only one found guilty. But in this case, I mean, I forget what they had, something like 600 clients, you're going to have federal investigators going through 600 sites.
It’s pretty scary.
LG:
That is very scary. And a lot of businesses, a lot of companies, both big and small, they rely on these staffing agencies. And they need laborers now more than ever.
John O’Brien:
Staffers rely on these agencies, too, obviously. Sure they do. People want to go to work and have someone to put them somewhere. It's hard to get a job.
LG:
It is true. When you have that kind of support, it really makes a difference. When you're in a position that you're looking for a job, but also from the employers’ standpoint, they are finding it hard to staff because a lot of people are still coming out of this “COVID” haze that people don't want to go back to work.
I've talked to so many hospitality groups and other employers and they say it is so tough to get people to work for them, and now they're going to be further hamstrung by these laws and people being afraid to even get into the staffing business, I would imagine.
John O’Brien:
Think about companies that Forge is sending workers to that need these workers. Auto parts companies. Food companies. This is stuff that people need. These are auto parts, this is food, this is stuff people need.
LG:
That's an excellent point. That is true, and these companies need thousands of workers. Interesting.
Well, this is a fascinating case and we really looking forward to seeing how things develop. John, thank you so much for keeping your eye on this and we want to stay tuned to see what develops. So please join us again when the decision comes out.
