In one of the largest wage infringement settlements ever reached for US poultry workers, a federal court in Los Angeles has ordered Fu Qian Chen Lu, Bruce Shu Hua Lok and others, as owners and operators of a network of California poultry processors and distributors, to pay $4.8 million in back wages and compensation to 476 workers and $221,919 in fines following an investigation by the United States Department of Labor.
The settlement requires employers to forfeit $1 million in profits from the sale of products tainted by oppressive child labor and pay fines of $171,919 for violations of child labor laws. The judgment comes after a temporary restraining order that banned the shipment of "tainted" products for sale and required all profits related to such shipment to be returned.
Lu and his associated companies supply distributors who sell chicken meat and derivatives to Diamond Green Diesel, Diamond Pet Foods, Foster Farms, Mars Pet Care, Perfection Pet Foods and Superior Food among others. They also supply several Nevada hotels and casinos including Caesar’s Palace, The Mirage Hotel and Casino and The Orleans Hotel in Las Vegas, as well as the Casablanca Casino and Virgin River Hotel and Casino in Mesquite.
The April 30th action came after investigators from the department's Wage and Hour Division learned that the poultry company was illegally employing children - as young as 14 years old - to use sharp knives to debone birds, in violation of federal child labor regulations. In addition, the division found that employers and their associates denied cutters and packers of poultry and red meat wages for overtime worked over 40 hours in a work week while falsifying payroll records to obstruct the investigation.
"When we discover an employer is risking a child's welfare for profit, the Department of Labor uses all available tools to remove children from danger and prevent future infringements," explained Labor Solicitor Seema Nanda. "The court's return order recognizes that no employer should profit from smuggling and on the backs of children."
Following an investigation initiated in January 2024 by the Los Angeles District Office of the Wage and Hour Division, supervisors at the employers' facilities began to retaliate against workers, telling them they had put a "noose around their neck" for speaking with the department and using derogatory insults. They also changed employment conditions. The employers' previous lawyer also flatly refused to respond to any of the agency's administrative subpoenas and attempted to obstruct the investigation, leading to successful action to enforce subpoenas and obtain an order against supervisors for retaliation.
"Federal labor laws protect children from being employed in dangerous jobs and protect workers' right to receive all their legally earned wages," said Wage and Hour Administrator Jessica Looman. "In this case, employers illegally employed children, some as young as 14 years old, to work with extremely sharp knives to quickly debone poultry. In addition, they denied hundreds of workers nearly $2 million in overtime wages. These infringements are unacceptable and the Wage and Hour Division will continue using all its tools to stop exploitation of vulnerable workers."
Once investigators verified child labor infringements, the Solicitor's Office in Los Angeles obtained a temporary restraining order and a court order under the "hot goods" provision of the Fair Labor Standards Act to prevent Lu and his companies from shipping merchandise produced by an establishment employing children illegally. When issuing the temporary restraining order, the court determined that employers were "employing oppressive child labor at facilities, which turned merchandise produced into contraband, prohibiting its entry into commerce."
The judgment of the U.S. District Court for Central California orders Lu and his associated companies to pay over $1.8 million in back wages and $3 million in compensation to affected workers. Employers must also pay fines for their child labor violations and intentional overtime payment violations, as well as return profits made from the sale of products tainted by oppressive child labor. These profits, totaling $1 million, will benefit working children. In addition, the court permanently prohibits Lu, Lok and their associates from committing future FLSA violations. Lu and his co-defendants agreed to adopt strong corrective measures to ensure future compliance.
The order requires Lu and his related companies to provide training on the Fair Labor Standards Act to all managers and supervisors and hire an independent third party to monitor FLSA compliance and the terms of the judgment at their facilities.
The division's investigation included eight related businesses controlled by Lu in Monterey Park, El Monte and Irwindale in California, including A1 Meat Solutions Inc., Lotus Plus Inc., Lotus Poultry Inc., Farmers Process Inc., Durfee Poultry Inc., L & Y Food Inc., JRC Culinary Group Inc. and Moon Poultry Inc.
The department encourages distributors and intermediaries to protect themselves against potential liabilities related to handling "hot" products by requiring producers, manufacturers and other traders to take steps to ensure that the merchandise they produce and sell is not made with oppressive child labor.
As part of the department's ongoing effort against child labor and wage theft in meat and poultry processing industries, this judgment comes after recovery of $3.8 million in back wages, compensation and penalties for child labor violations and wage infringements in November 2023 following another investigation in California of five companies owned or controlled by Tony Bran in La Puente and City of Industry.
More information about the Wage and Hour Division can be found online. Workers and employers can confidentially call the division if they have questions or concerns (regardless of their origin) at its toll-free number, 1-866-4-US-WAGE (487 -9243). The department can speak with callers in more than 200 languages.
