U.S. Labor Department Drops Lawsuit Against Centre County Mexican Restaurant

The U.S. Department of Labor has dropped a federal lawsuit against a chain of Centre County Mexican restaurants, according to court filings.

Attorneys for the Labor Department and Lupita’s Authentic Mexican Food jointly filed for voluntary dismissal after both parties agreed to a stipulated injunction to resolve alleged violations of the Fair Labor Standards Act. U.S. District Judge Christopher Conner ordered the case closed in early September.

The lawsuit filed in July arose out of an investigation opened a month earlier by the Department of Labor’s Wage and Hour Division into allegations that Lupita’s and its owner required employees to work to pay off the cost of their transportation to the United States, skirted overtime wage laws and unlawfully seized tips.

Lupita’s, owner Emilio Lopez and his wife, Maria Guadalupe Rojas, were accused of retaliating against employees who complained about or threatened to quit because of long hours without proper pay at the restaurant’s three Centre County locations.

A response filed by Lupita’s attorney Faith Lucchesi prior to the dismissal, however, portrayed the situation as a family matter related to loaned money that had little to do with the business. Lopez and Rojas did not loan anyone money for the purpose of traveling to the United States to work for Lupita’s, Lucchesi wrote.

Lopez’s sister and an ex-boyfriend’s nephew traveled to the United States of their own accord using money Lopez had sent her to weather financial difficulties in Mexico, Lucchesi wrote. According to the filing, when the sister and nephew arrived, they had no assets and Lopez and Rojas provided them with food, housing and other necessities.

No jobs were available for either at any of Lupita’s locations when they arrived, though they later did work at the restaurants “out of a desire to help family and not an existing obligation to repay the money” that Lopez had sent to his sister, Lucchesi wrote.

The Labor Department lawsuit alleged that Lupita’s withheld wages for rent and that Lopez told an employee he owed thousands of dollars more in debt than previously informed.

But Lucchesi wrote in the response that the nephew regularly borrowed and repaid money from Lopez. When the nephew ended his employment, Lopez called the most recent loan as due in accordance with their agreement and past practice. The nephew allegedly agreed that Lopez could retain his last paycheck to cover the balance of the debt.

Lupita’s also denied that Lopez and Rojas retaliated against any employees, threatened to throw certain employees out of provided housing, withheld compensation from employees who complained or dissuaded employees from engaging in activities protected by the Fair Labor Standards Act.

According to the stipulated injunction, Lupita’s is restrained from retaliating, discriminating or taking any adverse action against any current or former employee for filing a complaint, testifying in proceedings or otherwise asserting their protected labor rights. Lupita’s also is required to inform employees that they will not be retaliated against for asserting their rights under the FLSA, including by speaking to Labor Department investigators.

The agreement does not resolve any claims the Labor Department may bring for back wages, damages and other relief.