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Ala. Charity Accused of Exploiting Women

BIRMINGHAM, Ala. (CN) - A nonprofit set up to help struggling women and their children allegedly used its "charitable façade" to exploit their difficulties and make them work for substandard wages, a class action claims.

In a lawsuit filed in the Birmingham, Ala. Federal Court, Briana Walker says that Freedom Rain Inc., which does business as The Lovelady Center, is a "tax exempt non-profit holding itself out as a charity that adopts women in need and provides housing and rehabilitative services to approximately 450 women, plus many children daily."

The women who go to the Lovelady Center are often suffering from physical and substance abuse, or have served time in prison.

"These women have no money and no options," the complaint says.

"Despite Lovelady's charitable facade and its representations on the Internet that it is 'adopting' these women, in reality, Lovelady exploits these women by employing them at substandard wages, improperly taking credits against its minimum wage obligations equal to the value of Lovelady's 'intake fees,' 'program fees,' and other charges, while also failing to pay them overtime compensation," Walker says.

She says "Lovelady's operation can be compared to a soup kitchen that solicits donations to feed the homeless but then charges the homeless, at a profit, for each bowl of soup."

Walker, a former client of the nonprofit, maintains that Lovelady clients have no choice but to submit to this treatment because if they don't, they won't receive a certificate of completion from the program.

"During the relevant times preceding this action, Lovelady forced Plaintiff and others similarly situated to work for no wages or on an hourly basis, depending on whether Lovelady, on its own, characterized the work as voluntary," the complaint says. "During the three year period preceding the filing of this litigation, Lovelady (1) failed to pay Plaintiff and others similarly situated the federally required minimum wage and/or overtime due under the Fair Labor Standards Act ... (2) took improper credits towards its minimum wage and overtime obligations under the act; and (3) intentionally misclassified Clients as 1099 independent contractors."

Walker says the women are initially forced to work at Lovelady's program center in the laundry, cafeteria, maintenance department, call center, nail salon, coffee shop, thrift store or daycare. Many of these stores and facilities staffed by clients are open to the public and offer a "healthy profit" to Lovelady.

The complaint states that the women are regularly required to work in excess of 40 hours a week without any overtime compensation and Lovelady will take money from their pay checks towards the fees they are forced to pay. Additionally, the complaint alleges that Lovelady decides if some of the hours worked by the clients are "voluntary" and the women never know when they are working for free.

According to the complaint, Lovelady "utilizes several illegal schemes to exploit the women it touts it protects in order to cause these women to work for substandard wages" and it acts as a "staffing company" by sending the women to work at other businesses owned by family members of Lovelady's founder, including a tax company, a retail store and two assisted living facilities.

Walker claims Lovelady provides transportation for the women, but charges them for the service and fines them if they are late for pick up. Clients are also fined $10 if they miss work, if they are late or if they change a shift.

The complaint claims that Lovelady receives the checks for the work performed by their clients and it will calculate how many hours worked were voluntary and keep this money. Lovelady will then take a credit against any outstanding balances held by the clients and the complaint states that often the women were left with no money for their work.

"Lovelady has recently reached a settlement related to overtime violations with the Department of Labor ... covering 37 women contracted to assisted living facilities," the complaint says. "However, not all these 37 women agreed to settle their claims, and these 37 women do not constitute all those employed at the facilities made subject of the investigation. Lovelady 'cherry picked' the 37 and misrepresented to the DOL the number of women actually employed at those locations."

Walker seeks declaratory relief, compensatory and liquidated wages on the claimed violations of the Fair Labor Standards Act.

She is represented by Robert Camp of Wiggins, Childs, Pantazis, Fisher & Goldfarb of Birmingham.

A representative of The Lovelady Center declined to comment on Walker's allegations when contacted by CNS, explaining that had been unaware of the lawsuit and not seen the complaint.

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