Metro Detroit Leo's Coney Island Shortchanges Workers' Pay: Feds

METRO DETROIT — The owner of Leo's Coney Island restaurants in Clarkston, Dearborn, Livonia and Sterling Heights denied employees overtime pay, according to the U.S. Department of Labor.

Sterling Ponds Plaza LLC, the franchise locations’ operator and Kyriakos ‘Ken’ Vlahadamis, the restaurants’ co-owner and operator, kept two sets of time cards: one reflecting hours worked under 40 per week and another reflecting hours over 40 per week, according to the federal office.

Federal officials said Vlahadamis routinely shredded the time cards showing employees working overtime (more than 40 hours a week), and instead paid the workers straight-time rates.

An employer is legally required to pay employees who work overtime one and one-half their regular rate of pay, according to the federal office.

A judge ordered a preliminary injunction against the four restaurants on Monday. The order forces Vlahadamis to maintain accurate employee time cards and stop denying employees overtime pay. It also requires Vlahadamis to not discuss the ongoing litigation with employees or retaliate against anyone for cooperating with investigators for the department’s Wage and Hour Division.

Federal officials also said Vlahadamis' actions violate a 2018 court order forbidding violations of the Fair Labor Standards Act and are asking the court to hold him in civil contempt.

"The court’s action to ensure Vlahadamis and his Leo’s Coney Island franchises retain the records required by the Fair Labor Standards Act is an important first step to ensuring full compliance with the law," Regional Solicitor of Labor Christine Heri said in the release. "The preliminary injunction also includes an important safeguard for workers — requiring the defendants to inform their employees that they have the right to communicate with department officials about this case without fear of retaliation or discrimination."

In 2018, the same federal court entered a consent order and judgment prohibiting Vlahadamis and Leo’s Coney Island Sterling Heights from future FLSA violations, including overtime and record-keeping violations.

"Our investigations have found that, despite agreeing to comply with a 2018 court order forbidding him from future federal wage violations, Ken Vlahadamis was again denying his employees their full wages by refusing to pay overtime and keep required payroll records," Wage and Hour Division District Director Timolin Mitchell said. "His actions and refusal to follow the law are harmful to the hard-working employees who are being shortchanged by his illegal actions."

With origins dating back to 1914, Leo’s Coney Island opened its first location in 1982 in Farmington Hills and began franchising in 2005. The restaurant was founded using a limited menu offering fries, burgers and Greek salads. Now it also offers Greek specialties and breakfast.

There are more than 70 Leo’s Coney Island locations across Michigan.