“Seven Employers—Including American University, VIDA Fitness, Insomnia Cookies, and Others—Will Pay More than $860,000 to Workers & DC” - PoPville

“Seven Employers—Including American University, VIDA Fitness, Insomnia Cookies, and Others—Will Pay More than $860,000 to Workers & DC” – PoPville

Posted by author March 3, 2025 Fitness

“Seven Employers—Including American University, VIDA Fitness, Insomnia Cookies, and Others—Will Pay More than 0,000 to Workers & DC” – PoPville

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From the office of the DC Attorney General:

“Attorney General Brian L. Schwalb announced that Office of the Attorney General (OAG) successfully resolved seven investigations into employers suspected of violating DC laws protecting DC workers and key workplace rights. Under the terms of seven separate settlement agreements, these employers—including American University, VIDA Fitness, Insomnia Cookies, a medical staffing firm, a translation company, a café, and a dinner theater—will pay more than $860,000 to harmed workers and the District, and have agreed to reform their workplace practices.

“The Office of the Attorney General is committed to standing up for DC workers across every industry, from hospitality to health care to higher education,” said Attorney General Schwalb. “Especially at this time when affording the costs of living is so challenging, these settlements help put District workers’ hard-earned money back in their pockets where it belongs. The District has enacted some of the strongest worker protection laws in the country, but the laws do not enforce themselves—and we will continue fighting to ensure all DC workers receive the wages and benefits they earn and that all law-abiding businesses can compete on a level playing field..”

OAG enforces DC laws protecting workers’ rights, including laws that ensure fair wages, overtime pay, and sick and safe leave. Under the District law’s protecting workers—which are among the strongest in the nation— employers who fail to pay their workers, or who do not pay their workers on time, can be liable for up to four times the amount of unpaid wages, as well as administrative penalties, attorney’s fees and costs.

Recent OAG enforcement actions have included efforts to protect worker tips, stop a sham “commission” compensation scheme, crack down on unpaid training, stop off-the-clock work, and noncompete agreements that are unlawful under either DC’s non-compete ban or its antitrust laws. Details of these investigations and settlements are below:

Protecting Worker Tips

Insomnia Cookies, LLC (Insomnia Cookies) is a cookie delivery company that currently operates seven locations in DC. An OAG investigation revealed that between 2020 and 2022, Insomnia Cookies failed to pay $9,666.84 in tips to third-party delivery drivers. During that time, the company encouraged consumers to tip on delivery orders placed through their website. However, for the drivers to receive these tips from consumers, store employees had to manually input the amounts—and on more than 2,300 orders, they failed to do so. OAG further alleged that from 2019 to the present, Insomnia Cookies at times hindered its employees’ ability to use accrued paid sick leave by failing to process oral paid leave requests in violation of District law.

During OAG’s investigation, Insomnia Cookies paid $3,231.44 to some of the drivers who had been improperly deprived of tips. Now, Insomnia Cookies will pay $59,235.20 to resolve the investigation, including more than $25,700 in restitution for delivery drivers and more than $33,400 in penalties. It will also provide employee training on the District’s Sick and Safe Leave Act (SSLA) and designate a company contact for processing oral paid leave requests. A copy of the settlement agreement is available here.

Stopping a Sham “Commissions” Compensation Scheme

Urban Adventures Companies, Inc. is a lifestyle company comprised of multiple affiliated businesses, including VIDA Fitness, which operates four DC gyms. OAG investigated allegations that VIDA Fitness misclassified personal trainers as commissioned workers instead of paying them hourly wages, and failed to compensate these trainers for mandatory meetings and time spent preparing for training sessions.

Under the agreement to resolve these allegations, VIDA Fitness will pay $325,000 to 220 trainers who were not paid for mandatory meetings and/or time spent preparing for trainings sessions and $100,000 in civil penalties to DC. VIDA Fitness will also change its practices and will classify personal trainers as hourly employees moving forward. A copy of the settlement agreement is available here.

Cracking Down on Unpaid Training

System D, LLC and Café Circuit, LLC operated two DC coffee shops called The Wydown, which closed abruptly amid a union organizing campaign in 2024. OAG alleged that from 2021 through 2024, the Wydown systematically failed to pay new employees for 1.5 hour “training shifts,” during which employees worked behind the counter and prepared beverages for customers while the cafe was open. Under District law, hourly employees are owed wages for all hours worked, including any training time.

To resolve OAG’s investigation, The Wydown will pay $8,470.88 in restitution to more than 140 former workers who worked unpaid “training shifts.” The Wydown will also pay $4,517.80 in civil penalties to the District, and the company and its owners agreed to terms requiring employees to be paid for all time worked should they reopen or operate another business in the District. A copy of the settlement agreement is available here.

Stopping Off-Clock Work

American University is a private, federally-chartered university located in the District. OAG alleged that from October 1, 2020 through 2024, certain hourly, non-exempt employees working at AU’s Washington College of Law, School of International Service, School of Public Affairs, Academic Support and Access Center, and at WAMU 88.5 – American University Radio, were not compensated for all hours worked.

To resolve OAG’s investigation, AU will establish an initial restitution fund of $210,000 for eligible workers who have been contacted by a claims administrator. AU also will pay $50,000 in penalties to the District. Additionally, the settlement requires AU to pay all non-exempt employees for all hours worked at the applicable base and overtime rates and to provide training to all supervisors and non-exempt employees. A copy of the settlement agreement is available here.

Eliminating Unlawful Noncompete Agreements

OAG successfully resolved two investigations into businesses employers suspected of using unlawful noncompete agreements in violation of either DC’s 2022 ban on noncompete agreements or the District’s antitrust laws:

J.V.H. Surgical Associates, LLC (JVH) is a company that provides surgical staffing services to hospitals and other health care providers, placing surgical assistants for temporary, long-term, or permanent employment. In the District, MedStar Health was its largest client before it stopped providing services in December 2023. An OAG investigation found that JVH required nine workers staffed in DC to sign noncompete agreements after the ban went into effect on October 1, 2022, and attempted to enforce a noncompete against a former worker after the ban went into effect.

Andean Consulting Solutions International LLC (ACSI) is a company that contracts the services of foreign language interpreters and translators and ASL interpreters, and is a major provider of translation and interpretation services for DC government agencies. OAG alleged that ASCI’s contracts with its independent contractors contained restrictive noncompete provisions that restricted the provision of language translation services and harmed both workers and ASCI’s customers, including the District, in violation of the District’s antitrust laws.

Under the terms of the settlements:

JVH will pay $5,250 to 10 harmed workers, a $5,000 penalty to the District, and cease using noncompete provisions with workers staffed in DC. A copy of the settlement agreement is available here.
ACSI will not enforce any existing noncompete provision for current or former workers in the District, will eliminate the use of restrictive noncompete provisions in its contracts moving forward, and will pay $5,000 in penalties. A copy of the settlement agreement is available here.
Ending Unfair Arbitration Clauses & Other Abuses
734 NW LLC d/b/a SAX (SAX) is a “dinner theater” venue, bar, and restaurant in downtown DC. OAG alleged that from 2020 through 2024, SAX violated DC laws protecting workers in numerous ways—including by paying employees a variable wage based on sales rather than a set hourly wage, failing to provide employees with itemized paychecks listing wages and tips, failing to pay employees the correct minimum wage per hour worked, and failing to provide paid sick leave. OAG also alleged that SAX required employees to agree to a policy similar to a noncompete agreement and to a mandatory arbitration clause—and sometimes threatened to withhold wages until employees consented.
To resolve the investigation, SAX will pay $66,000 in damages to about 70 harmed workers, pay $30,000 in penalties to DC, and overhaul its practices. SAX must ensure every worker is paid a predictable hourly wage, provide itemized pay stubs, provide accrued paid sick leave, and void all arbitration clauses. A copy of the settlement agreement is available here.

OAG’s Efforts to Protect Workers
OAG’s Workers’ Rights and Antifraud Section is dedicated to fighting wage theft, protecting District workers and ensuring that businesses in the District compete on a level playing field. Since Schwalb became the District’s independent AG in January 2023, OAG has secured more than $19 million for workers and the District. In total, since gaining wage theft enforcement authority, OAG has secured over $35 million by investigating and bringing enforcement actions against employers who violate District law. OAG’s wage theft enforcement efforts have focused on industries with high populations of vulnerable workers, such as construction, restaurants and hospitality, healthcare, and the gig economy.

How to Report Wage and Hour Violations
Workers who believe that their rights have been violated, or that they have experienced wage theft or other wage and hour violations, can contact OAG by calling (202) 724-7730 or emailing [email protected] or [email protected].”