LEHI, Utah (ABC 4 News) - A Utah icon put on the map by the movie "Footloose" may close after more than 100 years in business. Lehi Roller Mills is fighting the U.S. Department of Labor to keep its doors open.
The company is coming under fire after losing its line of credit in 2009, waiting for clients to pay $4.5 million in unpaid bills and failing to pay employees on time.
U.S. Department of Labor District Director Lee Ann Dunbar is sending letters to Roller Mills customers. A part of it asks customers to stop all business with the struggling company, "We ask that you voluntarily refrain from further shipment or delivery. To do otherwise could possibly cause your firm to be in violation of the FLSA. Please confirm your assurance in writing to me by 12:00 on Tuesday, July 24, 2012." The letter is signed by District Director, Lee Ann Dunbar.
Robinson says the letter was sent to his customers without due process. He says it will only increase the chances his company will fail.
"This is an overreach. This is wrong and it doesn't solve any problems. It creates problems," company owner and president, Sherman Robinson. "This is what it looks like when a company is trying to survive. This is what our National Government does to people," he continued.
Robinson says he's in this mess because the FDIC, a federal entity, cut off his line of credit in 2009 when it shut down America West Bank in Layton.
This was the beginning of the Company's downfall. Robinson failed to pay his workers on time. "Is there really no money to pay these paychecks? You're really out?" ABC 4's Noah Bond asked Robinson July 9 during a protest. "Yes," he replied.
Marly Rodriguz says Robinson's failure to pay her husband on time cause great hardship. "Everything piled up. I kept having to ask my landlord if he could wait for us on the rent," Rodriguz said. She says her electricity was shut off during a week of triple digit temperatures and she struggled to buy diapers for her two-year-old daughter.
Lehi Roller Mills paid all of its workers by the last week of July. Robinson says he would like help to keep his doors open, but instead he's getting pressure from the Federal Government to shut down for good. He says 50 jobs will be lost if the U.S Department of Labor successfully shuts him down.
This case will go before Judge D. Benson in the 9th Circuit Federal Court. A date has not yet been set.
The complete letter that was sent to Lehi Roller Mills customers is below:
U.S. Department of Labor
Wage and Hour Division
World Trade Center at City Creek
60 E. South Temple Street Suite-575
Salt Lake City, Utah 84111
Two Whom it May Concern:
The Wage Hour Division of the U.S. Department of Labor is responsible for the administration and enforcement of a number of federal labor laws involving labor standards. This includes the Fair Labor Standards Act (FLSA).
The "hot goods" provisions of the FLSA provide that it is unlawful for any person, not just an employer, to ship goods, which have been made in violation of the FLSA. There is a limited exception for purchasers who have acquired the goods in good faith reliance on written assurance that the goods were produced in compliance, and who acquired the goods for value without notice of a violation. Whether or not this exemption is applicable, it is important that firms like your take prudent steps to assure that goods which are shipped and/or should in interstate commerce are produced by employees are paid in accordance with Federal minimum wage and overtime requirements.
The Department's Wage and Hour Division in conducting an investigation of Lehi Roller Mills Co., Inc. (lehi, UT). The investigation disclosed apparent minimum wage and overtime violations in that employees have not been paid wages owed to them for the period beginning June, 3, 2012 to present.
The investigation also disclosed that some of the goods produced by this firm may have been shipped to your company. Please identify the current location of all goods produced by Lehi Roller Mills Co., Inc. Which were shipped to your firm on or after June 3, 2012.
If you received written assurances prior to the receipt of these goods, please provide copies to this office along with information on steps your firm has taken to assure that the goods your purchase are made in compliance with the FLSA.
The Department has formally raised objections to the further shipment or delivery of any goods produced or handled by employees of Lehi Roller Mills Co., Inc. We ask that you voluntarily refrain from further shipment of delivery. To do otherwise could possibly cause your firm to be in violation or the FLSA. Please confirm your assurance in writing to me by 12:00 on Tuesday, July 24, 2012. My fax number is (801) 524-5722.
I look forward to hearing from you. Should you have any questions, please call me at (801) 524-5097, Ext. 214.
Lee Ann Dunbar
Lehi Roller Mills Co., Inc.
PO Box 217
833 E Main Street
Lehi, UT 84043
Encl. Hot Goods Fact Sheet