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Post date: December 27 2012

A.G. Schneiderman Announces Distribution Of Over $2 Million In Restitution To 400 Cheated Workers

Current And Former Employees Of Flat Rate Movers And Mystique Clothing Stores To Be Compensated For Unpaid Overtime And Other Violations

A.G. Is Investigating Other Moving Companies That May Have Violated State Labor Laws


NEW YORK — Attorney General Eric T. Schneiderman today announced the distribution of restitution funds and payment of monitoring costs totaling $2.25 million in two separate labor cases. In one case, 306 current and former employees of Flat Rate Movers, a multi-state moving and storage company with headquarters in New York City, are being paid $1.13 million in restitution. In a second case, approximately 100 employees of Mystique clothingstores in New York City have also begun receiving restitution as part of a $950,000 settlement.

"My office will vigorously enforce our state’s labor laws and ensure that workers receive the compensation they are legally owed," Attorney General Schneiderman said. "While my office is pleased to distribute this money to these workers, especially during the holiday season, we know that there are many employers that violate our state’s labor laws and we will continue to seek justice for other workers who are illegally underpaid."

Flat Rate reached a total settlement of $1.2 million with the Attorney General’s office in 2010 afteran investigationrevealed that the company had failed to pay overtime wages to its movers, even though some movers worked as many as 75 hours during certain weeks; failed to keep records of movers' hours worked; and unlawfully deducted pay from its movers' wages for a wide range of items, including uniforms, parking tickets and damage to moving trucks.

Individual workers will receive restitution in varying amounts of up to more than $15,000. In addition to payment of restitution, the settlement required a payment of approximately $70,000 for independent monitoring to ensure Flat Rate's compliance with the labor law. The monitoring process has shown a significant improvement in Flat Rate's labor practices.

Lior Smilovitz, a former Flat Rate foreman mover,said,“We worked very hard at Flat Rate and we did not get all of our pay.  But it is hard go up against a big company.  In this case, the Attorney General did it for us.  We are very happy that we were fairly compensated.  Thank you so much to the Attorney General’s Office for its hard work.”

In the past year, the Attorney General's LaborBureau has opened investigations into two additional moving companies and is considering other potential targets in the industry as well.

In a second case, the Attorney General's office began distribution of restitution funds to approximately 100 underpaid workers in a case against popular New York "Mystique" clothing stores Mystique Boutique, Inc. d/b/a Mystique Boutique; 3320 Fifth Corp. d/b/a Mystique Boutique; Mystique 412 Ltd.; Exstaza Ltd. d/b/a Exstaza; Amsterdam Boutique Inc. d/b/a Amsterdam; Canal Street Designs Inc.; Madness Boutique Ltd. d/b/a Madness, along with their owner David Cohen and a manager Asaf Cohen.

In that case, the Attorney General’s investigation found that the employers failed to pay at least the legal minimum wage to some employees, failed to pay overtime wages to their employees when employees worked more than forty hours in a work week and retaliated against certain workers who complained or where perceived to have complained about these violations.After the Attorney General's investigation, the employer agreed, in a 2011 settlement which was approved by the court this year, to pay $950,000 total, $925,000 in restitution and $25,000 for the cost of an independent monitor of the company's labor practices.

Carolina Ferreyra, a former employee,said, “With no raises and little room for growth, we worked under terrible conditions and so much stress that we would all often be angry with each other when,really, we were angry at the fact that we were having out wages stolen. We felt impotent. Not anymore. On behalf of all Mystique Boutique workers, we are very thankful for the work of the Attorney General's office. After all, our compensation came in handy for the holidays but the experience of coming together and standing up for our rights will never be forgotten.”

The Flat Rate and other moving cases are being handled by Assistant Attorney General Karen Kithan Yau under the supervision of Labor Bureau Special Counsel Patricia Kakalec, Labor Bureau Chief Terri Gerstein and Executive Deputy Attorney General for Social Justice Janet Sabel.The Mystique case was handled by Labor Bureau Special Counsel Patricia Kakalec. 

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