The Department of Labor issued a press release earlier this week detailing tens of thousands of dollars worth of unpaid overtime by Clover Food Lab. The local chain of restaurants, which used to operate food trucks as well, reportedly misclassified its food truck managers, paying them as salaried workers when it should have been paying them as hourly workers. The misclassification affected 65 employees, and the DOL forced Clover owner Ayr Muir to pay $79,338 in back wages and damages.
The press release seemed to have blindsided Muir, according to a Twitter discussion:
DOL issued a press release directly to news agencies without notifying us. I didn’t think I was able to talk about this agreement but now that it’s in open I’ll post details later today. Press release very misleading— Clover Food Lab (@cloverfoodlab) July 11, 2018
Muir later posted a longer explanation of the situation on Clover’s blog. He claims that he had no idea that he’d been misclassifying his food truck managers, and that Clover has always tried to be on the “up and up” with labor laws. From his blog post:
Not allowing a manager of a food truck to be considered a salaried employee was nothing we saw coming. And honestly, I don’t think it’s right. Food truck managers did the same kind of training, had the same kind of responsibilities, built the same relationships with staff and customers as restaurant managers. I think if we went to court with the DOL we’d win. But who knows, we can’t afford to fight the case. We are still a tiny company, but we were much smaller back in 2015. I didn’t have an employment lawyer as we do now. We thought we were doing everything on the up and up, and when this thing with the DOL came up it was really disturbing and I spent an absurd amount of time (literally weeks) holed away with reports and reams of data and payroll records.
Jenny Zhao, the director of digital marketing at Clover, told Eater via email that the press release was misleading, and that they don’t know what they could have done differently to avoid the wage dispute.
“The majority of this is due to a decision by [the] DOL that food truck managers cannot be paid as salaried employees, which seems arbitrary to us,” said Zhao. “This is one more thing that makes operating a food truck difficult in Boston. If you’re operating a restaurant, your manager is salaried. If you’re operating a food truck, you have to pay your manager hourly, so how do you make that attractive to hiring talent?”
According to the AP report, Clover has settled the dispute.