Judge: Huntley restaurant Papa G’s must pay $105K in back wages, damages to employees

Papa G’s in Huntley was ordered this month by a federal judge to pay $105,000 in back wages and damages to eight employees after a federal investigation found the owners were illegally denying the workers their earned overtime wages, according to the U.S. Department of Labor.

The settlement comes after an investigation of the restaurant’s employment and pay practices from Feb. 3, 2019, through Jan. 20, 2022, according to federal court records.

The department found restaurant owners Steve and Rick Tsakalios failed to pay eight of its employees the required one-and-one-half overtime rate when they worked more than 40 hours in a week and did not keep adequate payroll records, according to the consent order and judgement filed with the U.S. District Court of Northern Illinois.

The owners were ordered to pay $52,504 in unpaid overtime compensation from Feb. 3, 2019, through Jan. 20, 2022, and $52,504 in damages. They also must pay $5,992 in penalties “for their willful violations” of the Federal Labor Standards Act, according to the consent order and judgement.

“A federal court has upheld the findings of our investigation that Papa G’s denied eight workers the overtime wages they earned legally and then obstructed a federal investigation. The court’s action will also lead to the recovery of more than $105,000 in back wages and damages for eight restaurant employees who worked long hours to put food on their own tables.”

—  Tom Gauza, U.S. Department of Labor Wage and Hour Division district director in Chicago

The amount represents more than 87% of the unpaid wages, according to the order.

According to the order, the restaurant owners, the Tsakalioses, “freely agreed” to the payment.

“Papa G’s worked collaboratively with the DOL [Department of Labor] during the course of the investigation,” Ethan Zelizer, a member of HR Law Counsel, said in an emailed statement on behalf of Papa G’s. “The claims resolved by the settlement are allegations only, and there has been no determination of liability. That said, we are glad to have resolved these issues.

“Papa G’s has long been a favorite gathering place in Huntley. Over the past 25 years, this diner restaurant has become a favorite spot for people from near and far. Many of Papa G’s employees have been with the restaurant for more than a decade and we look forward to making more memories with our staff and the community.”

During the investigation, a temporary restraining order was filed against the restaurant owners alleging they intimidated and harassed employees who were cooperating with the investigation, according to court documents

Investigators learned the owners were retaliating, discriminating, interrogating, withholding wages from, firing or threatening to fire employees interviewed by U.S. Department of Labor investigators, according to a preliminary injunction filed last year.

During the investigation, the owners also provided falsified payroll records, according to the news release.

The order issued earlier this month includes other provisions the owners must comply with, including not permitting employees to work more than 40 hours in a 40-hour workweek unless they are paid the proper overtime rate. They also must make and keep detailed records for all employees that include their wages and hours.

They were ordered to give each employee a detailed pay stub each pay period, and they may not threaten to fire, fire or retaliate in anyway against a current or former employee should they threaten to report any future violations of the Fair Labor Standards Act.

They also are not to ask for any of the money the employees received in the settlement or fire, intimidate or discriminate against any of the employees who received settlement money.

The owners also must hire a third-party accountant or IRA-enrolled agent to perform three audits over the next three years and make the audits available for review by the U.S. Department of Labor, according to the order.

The Tsakalioses “violated the FLSA [Federal Labor Standards Act], specifically the FLSA’s overtime compensation and record keeping requirements,” Julie A. Su, the Acting Secretary of Labor with the U.S. Department of Labor, said in a memorandum in support of the consent order and judgement.

A copy of the judgement also must be posted inside the restaurant and all employees must be provided with information about federal wage laws and their rights, according to the order and news release.

The proposed consent judgement “is fair, reasonable and lawful,” Su said in the memo.

“A federal court has upheld the findings of our investigation that Papa G’s denied eight workers the overtime wages they earned legally and then obstructed a federal investigation,” said Tom Gauza, the Wage and Hour Division district director in Chicago. “The court’s action will also lead to the recovery of more than $105,000 in back wages and damages for eight restaurant employees who worked long hours to put food on their own tables.”