DETROIT, MI - The U.S. Department of Labor has obtained a consent preliminary injunction against the Michigan operator of Leo's Coney Island franchise locations in Clarkston, Dearborn, Livonia and Sterling Heights with a history of defying overtime regulations and shortchanging employees' wages.

Under terms of the preliminary injunction, issued by U.S. District Judith E. Levy in the Eastern District of Michigan in Detroit on July 15, 2024, Sterling Ponds Plaza LLC, the franchise locations' operator and Kyriakos 'Ken' Vlahadamis, the restaurants' co-owner and operator, agreed to maintain accurate employee timecards and stop denying employees overtime pay. He also agreed not to discuss the ongoing litigation with employees or retaliate against anyone for cooperating with investigators for the department's Wage and Hour Division.

On July 8, 2024, the department's Office of the Solicitor asked the court for the temporary restraining order. The court set a short briefing schedule and a hearing on the temporary restraining order within seven days of filing. Vlahadamis and the companies agreed to the injunction, which the court approved on July 15, 2024.

The department is also asking the court to hold Vlahadamis liable for civil contempt for violating a 2018 court order forbidding violations of the Fair Labor Standards Act.

"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."

The filing follows execution of an administrative search warrant by the department's Wage and Hour Divisionduring which investigators found Vlahadamis kept two sets of timecards: one reflecting hours worked under 40 per week and another reflecting hours over 40 per week. Division investigators allege Vlahadamis regularly shredded the timecards used to track overtime hours and paid workers straight-time rates for all hours worked when the employer was legally obligated to pay these employees time and one-half their regular rate of pay for hours over 40 in a workweek.

In 2018, the same federal court entered a consent order and judgment prohibiting Vlahadamis and Leo's Coney Island Sterling Heights from future FLSA violations, including overtime and recordkeeping violations. The department has asked the court to hold him in civil contempt because his alleged actions violate the 2018 consent order.

"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 the hard-working employees who are being shortchanged by his illegal actions."

Haley Jenkins in the department's Regional Office of the Solicitor in Chicago is litigating the case.

With origins dating back to 1914, Leo's Coney Island opened its first location in 1982 in Farmington Hills and began franchising in 2005. Founded using a limited menu offering fries, burgers and Greek salads, its current offerings include Greek specialties and breakfast. There are more than 70 Leo's Coney Island locations in Michigan. This case relates to the four Leo's Coney Island franchises co-owned and operated by Vlahadamis.

Learn more about the Wage and Hour Division,including a search tool to use if you think you may be owed back wages collected by the division.

For more information about the FLSA, contact the division's toll-free helpline at 866-4US-WAGE (487-9243). Workers and employers can call the division confidentially with questions, regardless of where they are from, and the department can speak with callers in more than 200 languages. Download the agency's free Timesheet Appfor Android and iOS devices, available in English and Spanish, to help track work hours and pay.

DOL v. Sterling Ponds Plaza LLC,. Et. al.

Case 5:24-cv-11758-JEL-CI

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