In one of the largest wage violation settlements ever reached for U.S. poultry workers, a federal court in Los Angeles has entered a consent judgment that orders 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 damages to 476 workers and $221,919 in penalties after a U.S. Department of Labor investigation. 

The settlement requires the employers to give up $1 million in profits earned from the sale of goods tainted by oppressive child labor and pay assessed penalties of $171,919 for their child labor violations. The judgment follows the grant of a temporary restraining order that barred the shipment of hot goods into commerce and required the employer to disgorge all profits related to any such shipment.

Lu and his associated companies supply poultry products to distributors who sell chicken products to, among others, Diamond Green Diesel, Diamond Pet Foods, Foster Farms, Mars Pet Care, Perfection Pet Foods and Superior Food; as well as several Nevada hotels and casinos including Caesar’s Palace, The Mirage Hotel and Casino and The Orleans Hotel in Las Vegas; and the Casablanca Casino and Virgin River Hotel and Casino in Mesquite.

The April 30, 2024, action comes after investigators with the department’s Wage and Hour Division learned the poultry enterprise illegally employed children — as young as 14 years old — to use sharp knives to debone poultry, a violation of federal child labor regulations. Additionally, the division found the employers and their associates denied the poultry- and red meat cutters and packers overtime wages for hours over 40 in a workweek and falsified payroll records to obstruct the probe. 

“When we find an employer has put a child’s well-being at risk in return for profit, the Department of Labor will use all available tools to seek to remove children from harm’s way and prevent future violations, including stopping the shipment or sale of goods located where children are being exploited,” explained Solicitor of Labor Seema Nanda. “The court’s disgorgement remedy re cognizes that no employer should profit off the shipment of contraband and the backs of children.”

After the investigation began in January 2024 by the Wage and Hour Division’s Los Angeles District Office, the supervisors at the employers’ facilities began retaliating against the workers, telling them they put the “noose around their own necks” for talking to the department and calling them derogatory slurs, as well as changing the terms of employment. The employers’ prior counsel also flatly refused to respond to any of the agency’s administrative subpoenas and attempted to obstruct the investigation, leading to a successful action to enforce subpoenas and obtain an order against the supervisors for retaliatory conduct.

“Federal labor laws protect children from being employed in dangerous jobs and protect workers’ right to be paid all of their legally earned wages,” said Wage and Hour Administrator Jessica Looman. “The employers in this case illegally employed children, some as young as 14 years old, to work with extremely sharp-edged knives to quickly debone poultry and denied hundreds of workers nearly $2 million in overtime wages. These violations are unacceptable, and the Wage and Hour Division will continue to use all its tools to stop the exploitation of vulnerable workers.”

Once investigators verified the child labor violations, the department’s Office of the Solicitor in Los Angeles obtained a temporary restraining order and an injunction under the Fair Labor Standards Act’s hot goods provision to prevent Lu and his businesses from shipping goods produced by an establishment that employs children illegally. In granting the temporary restraining order, the court found that the employers “employed oppressive child labor at the facility, which permanently render[ed] produced goods as contraband that [was] forbidden from entering commerce.”

The judgment in the U.S. District Court for the Central District of California directs Lu and his associated businesses to pay more than $1.8 million in back wages and $3 million in damages to the affected workers. The employers must also pay civil money penalties for their child labor violations and willful overtime violations, and disgorge profits earned from the sale of goods tainted by oppressive child labor. These profits – totaling $1 million – will benefit the child workers. In addition, the court permanently forbids Lu, Lok and their associates from future FLSA violations. Lu and his co-defendants agreed to strong remedial measures to ensure future compliance.

In addition, the order requires Lu and his related businesses to provide training on the Fair Labor Standards Act to all managers and supervisors and to hire an independent third-party to monitor compliance with the FLSA and the terms of the consent 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 downstream distributors and customers to protect themselves against potential liability related to handling hot goods by requiring producers, manufacturers and other dealers to take measures to ensure that the goods they produce and sell are not made with oppressive child labor. 

Part of the department’s ongoing effort to combat child labor abuses and wage theft in the poultry and meat processing industries, this judgment follows the division’s November 2023 recovery of $3.8 million in back wages, damages and penalties for child labor and wage violations after another California investigation of five companies owned or controlled by Tony Bran in La Puente and City of Industry. 

Source: Department of Labor