The U.S. Department of Labor has recovered $613,037 in back wages for 46 workers after a federal investigation found a Minnesota restaurant failed to pay minimum and overtime wages as required by law.
Investigators with the department’s Wage and Hour Division investigated four of the employer’s nine Minnesota locations, and found that Rehman
LLC, IN LLC, IQ LLC, and MOON LLC – all operating as NY Gyro – failed to maintain records of hours worked, in violation of the Fair Labor Standards Act’s record keeping provisions. In addition, the employer violated wage la
ws when it paid workers straight-time pay for all hours worked, including those over 40 per workweek, resulting in overtime violations. The division also foun
d a minimum wage violation when NY Gyro paid an employee less than the required $7.25 per hour federal minimum wage.
Insurance companies cannot invoke “overriding public policy” in order to refuse to defend insured hotel owners and managers accused of enabling and pro
fiting off of sex trafficking of minors, even though the state has criminalized such trafficking.
“[N]either an insurer’s duty to defend nor its duty to indemnify is abrogated on the basis of public policy when the insured is alleged to have enabled or profite
d from sex trafficking,” the Pennsylvania Supreme Court declared yesterday.
The state Supreme Court said that insurers could have created exclusions in their insuran
ce policies for such behavior but did not and it was not appropriate for the court to act as a “super-scrivener” to insert coverage exclusions for the insurers.
The high court explained that while the General Assembly has expressed the Commonw
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ealth’s policy against sex trafficking by criminalizing it, the criminal statute “does not provide a
justification for the judicial crafting of an exception to insurance coverage in a policy otherwise silent on the subject.”
The high court added that adopting the insurers’ position to abrogate insurance coverage would require it to divine an “overriding” public policy. “We do not believe it is within the purview of this Court to rank the magnitude of the p
ublic policy underlying the various crimes defined in the Crimes Code,” the opinion states.
Emphasizing the breadth of an insurer’s duty to defend, the court said an insurer may not justifiably refuse to defend a claim against its insured “unless it is clear
from an examination of the allegations in the complaint and the language of the policy that the c
laim does not potentially come within the coverage of the policy.” This duty even extends to claims that are “groundless, false, or fraudulent” so long as the allegations possibly implicate coverage.
The case arose out of four civil complaints by plaintiffs who alleged that, as minors, they
were victims of human sex trafficking at various hotels in Philadelphia, including the Roosevelt Inn. Each plaintiff filed suit against UFVS Management Co., Roosevelt Mo
tor Inn, Inc., and Roosevelt Inn, as the owners, operators, and managers of the Roosevelt Inn. The plaintiffs alleged that policyholders were negligent in failing to stop sex trafficking from occurring at the inn.
The hotels maintained primary-layer commercial general liability insurance for the Roosevelt Inn through various insurers, including Harleysville Preferred Insurance Co., Nationwide Mutual Insurance Co. and Samsung Fire and Marine I
nsurance Co. Harleysville, Nationwide, and Samsung each initially defended the policyholders in the underlying lawsuits subject to reservations of rights.
