The U.S. Department of Labor has secured a consent preliminary injunction against the Michigan operator of Leo’s Coney Island franchise locations in Clarkston, Dearborn, Livonia, and Sterling Heights. This follows a history of non-compliance with overtime regulations and wage shortchanging.
The preliminary injunction was issued by U.S. District Judge Judith E. Levy in the Eastern District of Michigan on July 15, 2024. Under its terms, Sterling Ponds Plaza LLC and Kyriakos ‘Ken’ Vlahadamis, co-owner and operator of the restaurants, are required to maintain accurate employee timecards and cease denying employees overtime pay. Additionally, they must not discuss the ongoing litigation with employees or retaliate against those cooperating with investigators from the department’s Wage and Hour Division.
On July 8, 2024, the department’s Office of the Solicitor requested a temporary restraining order from the court. The court expedited the process with a short briefing schedule and a hearing within seven days. Vlahadamis and his companies agreed to the injunction, which was subsequently approved on July 15.
The department is also seeking to hold Vlahadamis liable for civil contempt for violating a 2018 court order that prohibited violations of the Fair Labor Standards Act (FLSA).
“The court’s action to ensure Vlahadamis and his Leo’s Coney Island franchises retain the records required by the Fair Labor Standards Act is an important first step to ensuring full compliance with the law,” said Regional Solicitor of Labor Christine Heri in Chicago. “The preliminary injunction also includes an important safeguard for workers—requiring the defendants to inform their employees that they have the right to communicate with department officials about this case without fear of retaliation or discrimination.”
This filing comes after an administrative search warrant executed by the department’s Wage and Hour Division revealed that Vlahadamis kept two sets of timecards: one reflecting hours worked under 40 per week and another for hours over 40 per week. Investigators allege that Vlahadamis regularly shredded timecards used to track overtime hours and paid workers straight-time rates for all hours worked instead of paying time-and-a-half for hours over 40 per week as required by law.
In 2018, a federal court had entered a consent order prohibiting Vlahadamis and Leo’s Coney Island Sterling Heights from future FLSA violations, including overtime and recordkeeping violations. The department now asks the court to hold him in civil contempt due to these alleged violations.
“Our investigations have found that, despite agreeing to comply with a 2018 court order forbidding him from future federal wage violations, Ken Vlahadamis was again denying his employees their full wages by refusing to pay overtime and keep required payroll records,” said Wage and Hour Division District Director Timolin Mitchell in Detroit. “His actions and refusal to follow the law are harmful to hard-working employees who are being shortchanged by his illegal actions.”
Haley Jenkins from the department’s Regional Office of the Solicitor in Chicago is litigating this case.
Leo’s Coney Island began operations in Farmington Hills in 1982 after its origins dating back to 1914. The franchise started expanding in 2005 offering a menu initially limited but now inclusive of Greek specialties and breakfast items across more than 70 locations in Michigan. This case pertains specifically to four franchises co-owned by Vlahadamis.
For more information about potential owed back wages or details regarding FLSA regulations, individuals can contact the division's toll-free helpline at 866-4US-WAGE (487-9243). Workers can also download a free Timesheet App available on Android and iOS devices for tracking work hours.
DOL v. Sterling Ponds Plaza LLC., et al.
Case: 5:24-cv-11758-JEL-CI
