Upper Crust in Salem To Pay $80K Following Labor Dept. Investigation

The Upper Crust Pizzeria in Salem will pay more than $80,000 in liquidated damages and back wages to 11 employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division.

Franchise owner Michael Buchhalter violated the Fair Labor Standards Act by withholding full overtime pay to employees and keeping faulty records of their work hours, according to investigators. He has signed an agreement to pay the $40,277 owed to his employees as well as an equal amount in liquidated damages.

Upper Crust stores have faced multiple allegations of unfairly treating workers in recent years, drawing a critical response from some Harvard labor and immigration student groups.

Following allegations of mistreatment from two Upper Crust employees last summer, two Harvard Law School groups, the Harvard Immigration Project and the Labor and Employment Action Project, organized a boycott in February of the chain. The boycott eventually gained the support of 60 Harvard groups.

“It’s mostly just to send a message that we don’t support companies that treat their workers this way and aren’t compliant with labor and employment laws,” said Claire S. Valentin last February. At the time, she was a third-year Law School Student and president of the Harvard Immigration Project.

In that case, the employees alleged that the store forced them to give back overtime wages and took advantage of multiple workers, many of whom were illegal immigrants from Brazil. They filed a lawsuit last summer, with depositions currently being taken.

Upper Crust has denied those allegations.

In 2009, a separate investigation by the Department of Labor required The Upper Crust LLC to pay $341,545.53 in back wages to 121 employees in 10 restaurants.

Buchhalter Ltd. operates the Salem franchise separately from the corporate-owned Upper Crusts in the Boston area, and Buchalter and the corporate side have both emphasized that distinction.

George Regan, an Upper Crust spokesman, told the Boston Globe that the Salem operator is “a franchisee and its own separate entity.’’

“We are pleased that the 11 employees will get the back pay and damages they deserve,” wrote Supawon Lervisit, a third-year Harvard Law School student and board member of the Harvard Immigration Project, in an emailed statement. “The violations committed at the one Salem franchise reflect a pattern of worker mistreatment endemic to … the restaurant industry in general.”

No lawsuit was filed because Buchhalter was immediately compliant with the investigators, said Edmund Fitzgerald, a spokesman with the Department of Labor.

Carlos Matos, assistant director of the Wage and Hour Division’s Boston District Office, said in a press release that holding FLSA violators accountable for liquid damages in addition to back wages “ensures accountability under the law and also helps level the playing field for those employers who play by the rules and pay their workers fair wages.”

David Berman, a lawyer for Upper Crust, could not be reached for comment.

—Staff writer Leanna B. Ehrlich can be reached at lehrlich@college.harvard.edu.