DOL Lands $600K Consent Judgment Against Repeat FLSA Violators Running Leo’s Coney Island Locations

DETROIT (LN) — The U.S. Department of Labor secured a $0.60 million consent judgment June 8 against four Michigan restaurants operating under the Leo’s Coney Island name and their owner, resolving claims that the defendants violated a prior FLSA consent judgment and failed to pay overtime.

The judgment, entered by U.S. District Judge Gershwin A. Drain in the Eastern District of Michigan, requires the defendants to pay $0.26 million in unpaid overtime compensation covering the period from July 8, 2021 through July 8, 2024, an equal amount in liquidated damages, and $73,784.10 in civil monetary penalties. The defendants also agreed to pay $10,000 to resolve a contempt petition alleging violations of a prior 2018 consent judgment.

The four corporate defendants are Sterling Ponds Plaza, LLC d/b/a Leo’s Coney Island #61; Clarkston Restaurant, Inc. d/b/a Leo’s Coney Island #22; Dearborn Plaza Coney Island, Inc. d/b/a Leo’s Coney Island #41; and Stass Restaurant, Inc. d/b/a Leo’s Coney Island #38. Kiriakos Vlahadamis is sued individually.

The consent judgment prohibits the defendants from tracking overtime hours in separate records or accounts, paying employees at their regular rate for overtime hours, and using dummy or false accounts in any timekeeping or payroll system—including systems such as Toast—to conceal hours worked. The defendants must maintain accurate payroll records reflecting all hours worked, wages paid, tips, tip credit taken, and all withholdings and deductions.

The judgment also bars the defendants from destroying, manipulating, or altering any records required under the FLSA, and from altering time or payroll records to reduce hours actually worked unless an employee agrees in writing to correct a genuine error or there is a bona fide written dispute.

Under the compliance provisions, the defendants must complete quarterly FLSA training for managers and owners at each of the four corporate locations for three years, create and distribute an employee handbook in languages each manager speaks, and provide employees with DOL wage-and-hour fact sheets in their fluent languages. The defendants must also authorize third-party timekeeping and payroll vendors, including Toast, Inc., to provide records to the DOL upon request without a subpoena.

The defendants agreed to post the consent judgment at all their establishments within seven days, with the posting to remain in place for two years.

The payment schedule requires a preliminary payment of $0.12 million by June 21, 2026, followed by 12 monthly payments. The contempt resolution payment of $10,000 is due within 30 days of the defendants’ execution of the judgment. If the defendants fail to make any payment within a three-calendar-day grace period, all remaining installments become immediately due.

The judgment resolves both Case No. 2:24-cv-11758 and the prior Case No. 2:18-cv-10888, which will be dismissed upon timely payment of the contempt resolution amount.