Department of Labor Logo OSHA News Release - Region 1


May 29, 2024

 

Rhode Island nail salons, owner agree to stop worker retaliation; pay $753K in back wages, damages after US Department of Labor investigations, litigation

Steven Xingri Cao, businesses must take additional corrective actions to protect workers

BOSTON – Three Rhode Island nail salons in Cumberland, East Greenwich and North Providence and their owner have agreed to pay employees $753,500 in back wages and damages and take corrective actions to resolve violations of the anti-retaliation provisions of the Fair Labor Standards Act and the Occupational Safety and Health Act and the FLSA's overtime requirements.

The department sued New VIP Nail Spa Inc., VIP Neo Nails Inc., VIP Spa & Nails Inc. and owner Steven Xingri Cao in August 2022 for alleged violations identified during investigations by its Wage and Hour Division and Occupational Safety and Health Administration.

The investigations and litigation in this case represent one of the few joint cases the U.S. Department of Labor has ever filed involving retaliation claims asserted under both these laws.

The lawsuit alleged that, in July 2020, Cao fired and threatened an employee who was sickened by an undiluted sanitizer, raised safety and health complaints with management and then filed an OSHA complaint. Cao also threatened another employee who had a close relationship with the fired employee. The department also alleged that the nail salons did not pay proper overtime compensation to employees who worked more than 40 hours in a workweek, did not maintain accurate work records, provided false information to investigators and compelled employees to sign documents that contained false information about their employment.

In February 2024, the department obtained a consent judgment that resolves the litigation, entered by the U.S. District Court for the District of Rhode Island. The consent judgment permanently forbids Cao and the businesses from future violations of the OSH Act and the FLSA, as well as its wage and recordkeeping provisions. The judgment also requires them to do the following:

  • Pay 70 employees $550,000 — $275,000 in back wages and $275,000 in liquidated damages — because of FLSA overtime violations.
  • Pay $168,000 in OSHA compensatory, punitive and emotional distress damages to an employee who Cao fired for raising safety and health complaints.
  • Pay $23,500 in OSHA punitive damages to an employee who Cao threatened.
  • Pay $12,000 in FLSA punitive damages to employees who Cao made sign false employment documents.
  • Provide anti-retaliation training to supervisors.
  • Post a notice in English, Spanish and Korean at each workplace explaining employees' rights.
  • Hire a payroll monitor for at least two years to evaluate FLSA compliance going forward and hire an independent safety consultant to audit the nail salons to identify any safety and health hazards.
  • Arrange a meeting among nail salon owners and representatives of OSHA and the Wage and Hour Division for purposes of U.S. Department of Labor outreach to industry employers.

"Unfortunately, workers face several types of unlawful conduct by their employers, including unfair wages, unsafe working conditions and retaliation. When workers' rights are violated under multiple statutes, the U.S. Department of Labor will move decisively to vindicate their rights in as holistic a way as possible," said Regional Solicitor of Labor Maia Fisher in Boston.

"This employer's egregious actions in firing and threatening workers for raising health concerns and complaining to OSHA defy the law and place workers at potential risk," said OSHA Regional Administrator Galen Blanton in Boston. "Discouraging or preventing workers from participating in an OSHA inspection may mask or delay identification and correction of hazards that could sicken or injure them."

"This consent judgment — which requires payment of $562,000 in FLSA back wages and damages — sends a strong message to employers that failing to pay employees properly and retaliating against workers who assert their wage and hour-related rights can have costly consequences," said Wage and Hour Division Northeast Regional Administrator Mark H. Watson Jr. in Philadelphia.

The Wage and Hour Division's area office in Providence and OSHA's Office of Whistleblower Protection Programs in Boston conducted the investigations. The department's regional Office of the Solicitor in Boston litigated the case.

For more information about the FLSA, workers' legal protections against retaliation and other laws enforced by the Wage and Hour Division, contact the division's toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Employers and workers can call the division confidentially with questions, regardless of their immigration status. The division can speak with callers in more than 200 languages.

OSHA enforces provisions of the OSH Act and 24 other statutes protecting employees who report violations of various laws and for engaging in other related protected activities. For more information on whistleblower protections, visit OSHA's Whistleblower Protection Programs webpage.

View information in various languages on safety and health hazards in nail salons and workers' rights.

 

Walsh v. New VIP Nail Spa, Inc., VIP Neo Nails, Inc., and VIP Spa & Nails, Inc.; their successors, including VIP Emerald Nails, Inc., d/b/a VIP Nails & Spa, as successor to VIP Spa & Nails, Inc.; and Steven Xingri Cao.

Civil Action No. 1:22-cv-00311-WES-LDA

 

Media Contacts:

Ted Fitzgerald, 617-565-2075, fitzgerald.edmund@dol.gov
James C. Lally, 617-565-2074, lally.james.c@dol.gov

Release Number: 24-401-BOS