Workers win wage theft fight against former owners of Kellys Brew Pub

ALBUQUERQUE—The former owners of Kellys Brew Pub and Restaurant violated Albuquerque’s minimum wage ordinance, Judge Benjamin Chavez of the Second Judicial District Court ruled late Friday. The court also determined that because Kellys failed to follow the rules for paying the tipped minimum wage, the former owners owed their employees the full minimum wage for those hours worked. 

Under Albuquerque’s minimum wage ordinance, if employers fail to pay workers their full wage, they must pay triple the wages that were withheld as well as attorneys’ fees. The business and the business owners, executives, and officers can be liable. A trial to determine the exact amount of damages and attorneys’ fees the business and its owner owe the servers is currently set for October 2019.

“This victory puts all restaurants on notice that they must pay every worker, by law, for every hour they have worked,” said Bianca Garcia, a plaintiff in the case. “The law is on the side of fair pay. Dennis and Janice Bonfantine should be ashamed of themselves for going through such extremes—trying to overturn the minimum wage law altogether—just to avoid paying back the money they took from us.”

15 servers, represented by Youtz & Valdez, P.C. and the New Mexico Center on Law and Poverty, brought the class action lawsuit, Atyani v. Bonfantine, in April 2016 on behalf of about 150 former servers who worked at Kellys from 2013 to 2016. The lawsuit contends that after city voters overwhelmingly passed a ballot initiative in 2012 raising the Albuquerque minimum wage, the Bonfantines “settled on an unlawful response to the wage increase: servers would pay for it themselves, out of their tips.” 

Kellys required servers to pay their employers cash each shift, calculated at two percent of their total daily sales, plus three dollars per hour they worked on the clock. After making these required payments to their employer, servers sometimes owed more in cash than they had actually earned in cash tips during the shift. When this happened, servers were required to pay the difference from their wallets or their paychecks. 

To defend against these claims, the Bonfantines argued that the Albuquerque minimum wage was invalid because it was increased through a voter initiative that put a summary of the wage increase on the 2012 ballot rather than the entire ordinance. In May 2017, the Second District Court rejected this argument, ruling that any challenge to how the 2012 election was conducted must have been made right after the election.

“Albuquerque’s minimum wage law has teeth. Unscrupulous employers who don’t pay their workers the legal wage can be sued and end up paying much more in damages than if they had just paid their employees fairly,” said Stephanie Welch, supervising attorney with the New Mexico Center on Law and Poverty. “Workers have the right to a fair and legal wage. This includes people who work for tips.” 

“The Kellys servers showed incredible persistence in fighting the Bonfantines, who literally took their hard-earned money out of their pockets,” said Shane Youtz, an attorney at Youtz & Valdez, P.C. “We encourage every employee who is a victim of wage theft to come forward. You deserve to collect every dollar you worked for and are owed.“

Attorneys on the case are Stephanie Welch and Sovereign Hager of the Center and Shane Youtz and James Montalbano of Youtz & Valdez, P.C.

The order on Atyani v. Bonfantine can be found here: http://nmpovertylaw.org/case-law-summary-judgement-order-atyani-v-bonfantine-2019-07-12/

The transcript of the hearing in which the judge explains his ruling can be found here: http://nmpovertylaw.org/transcript-atyani-v-bonfantine-hearing-ruling-only-2019-05-29/

The Atyani v. Bonfantine complaint can be found here: http://nmpovertylaw.org/complaint-kellys-final-2016-04-28-filed

Bill closing loopholes in small loans law awaits governor’s signature

SANTA FE—The New Mexico Senate passed a bill today cleaning up state law that regulates storefront lenders. House Bill 150, Installment & Small Loan Changes, protects New Mexico borrowers by ensuring accountability and transparency in the storefront lending industry. The bill now awaits Governor Michelle Lujan Grisham’s signature for approval.
 
“Everyone deserves fairness and transparency when taking out a loan,” said Lindsay Cutler, attorney at the New Mexico Center on Law and Poverty. “HB 150 cleans up loopholes in state law by mandating effective data reporting to the state and providing consistency so all New Mexico families can receive fairer loans.”

New Mexico’s first across the board interest rate cap went into effect in January 2018, capping interest rates on storefront loans at 175 percent APR. However, high fees and loan rollovers continue to drain income from New Mexico borrowers. The two laws that regulate storefront lenders, the Small Loan and Bank Installment Loan Acts, still contain inconsistent fee and disclosure provisions, do not require sufficient reporting to the state’s Financial Institutions Division to enforce consumer protections, and do not make clear borrowers’ rights on loan renewals.

If signed into law, HB 150 would:

Require lenders to provide effective data on small loans, enabling the FID to verify storefront lenders are adhering to small loans law and for the state to evaluate how the law is impacting New Mexicans;

  • Allow borrowers 24 hours to rescind a high-interest loan;
  • Align fee provisions and disclosure requirements so consumer protections are consistent for all borrowers;
  • Protect New Mexican borrowers from potential loopholes when they renew or rollover loans by clarifying the definition of new loans; and
  • Align the penalties for violating the small loan laws and the language around the Unfair Practice Act to ensure that companies are held accountable for unfair and deceptive and unconscionable practices.

“The small loan industry makes hundreds of millions of dollars from hardworking New Mexico families,” said Cutler. “ We need our laws to be clear of ambiguities and provide meaningful consumer protections that hold small loan companies accountable. We’re optimistic that the governor will sign the bill. Small loan reform is absolutely necessary if we hope to stop predatory lending practices.”

Memorial to expand home visiting services passed by Senate Public Affairs Committee

SANTA FE— A memorial establishing an advisory council to develop a plan for the statewide expansion of a Medicaid-financed home visiting system in New Mexico, will head to the Senate floor following a “do-pass” vote today in the Senate Public Affairs Committee. Home visiting programs provide support and critical assistance for families that range from health care to emotional and social supports at a crucial time in a child’s brain development. Senate Memorial 117, Medicaid Home Visiting Program Council, is sponsored by Senator Linda M. Lopez.

“Every child deserves the best start from birth. Nurturing our state’s youngest children is key to ensuring they grow up healthy and prepared to succeed in life,” said William Townley, attorney at the New Mexico Center on Law and Poverty. “We’re optimistic that the memorial will pass the Senate.”

If passed by the New Mexico Senate, SM 117 would convene a council of home visiting providers and heads of the Human Services Department, Children, Youth and Families Department, Department of Health, and the Children’s Cabinet to make recommendations for expanding home visiting across the state through Medicaid financing.

Research shows that home visiting helps establish a strong foundation for families so children can grow up healthier and parents can develop stronger parenting skills. Home visiting programs that currently exist in New Mexico provide a team of professionals to help families learn about healthcare, child development, and parenting skills. Other services can include screening mothers for postpartum depression, supporting breastfeeding, and connecting families to community activities.

Unfortunately, most New Mexican families do not have access to home visiting services. Most services are offered by private non-profits that cannot scale up to meet the large unmet need in the state.

“Offering education early in a child’s life is essential in helping families succeed,” said Townley. “It would be good for everyone in New Mexico if more families could access home visiting.”

Court issues final ruling in landmark education lawsuit

Legislature’s proposed funding will not meet court’s mandate for transformation of education system

ALBUQUERQUE—Late Thursday, First Judicial District Court Judge Sarah Singleton issued a final ruling in Yazzie/Martinez v. State of New Mexico. The court found that the state has violated students’ constitutional rights to a sufficient education and ordered the state to provide educational programs, services, and funding to schools to prepare students so they are college and career ready.

The current proposed funding for education under discussion in the New Mexico Legislature will not suffice to meet the court’s mandate.

Current New Mexico Legislature education funding proposals are asking for an increase of $400 to $500 million—which amounts to a 15-18 percent increase in public school funding. Evidence at trial showed that public schools are receiving less funding now than in 2008, when adjusting for inflation. That data has since been updated to show that an increase of $409 million would only return New Mexico to 2008 education funding levels. In 2008, New Mexico was ranked at the bottom in the country in reading and math proficiency and was clearly not in compliance with New Mexico’s constitutional requirement. Reverting funding back to 2008 resources levels does not meet the court’s mandates to sufficiently fund programs and services for our children

“New Mexico’s students are legally entitled to the educational opportunities they need to succeed. This final judgement is yet another clear statement from the court that the state has a legal mandate to take immediate action to ensure that our students are getting the quality of education that they are constitutionally entitled to,” said Gail Evans, lead attorney for Yazzie plaintiffs in the Yazzie/Martinez v. State of New Mexico lawsuit. “To comply with the constitution, we must have a transformation of our educational system—nothing less is going to cut it. The system has failed our students for decades and that must stop now.”

The court made clear that students’ constitutional rights to a sufficient education cannot be violated so that the state can save funds. The court’s final judgement states, “The defendants must comply with their duty to provide an adequate education and may not conserve financial resources at the expense of our constitutional resources.”

The legislature’s current budget under consideration does not fully implement a multicultural and bilingual curriculum, does not adequately increase teacher pay and professional development to recruit and retain teachers, and does not ensure children have access to instructional materials, technology and transportation, and other basic services that are critical for educational success.

“Families and school districts have been struggling to work with the resources that they have,” said Tom Sullivan, former superintendent of Moriarty-Edgewood School District, which is a plaintiff in the Yazzie/Martinez lawsuit. “Most states’ education budgets have recovered from and surpassed pre-recession amounts, but in New Mexico, the current budget proposal is barely returning to 2008 levels when education was already underfunded.”

“We have an incredible opportunity to do the right thing for our students, our future,” said Mike Grossman, superintendent of Lake Arthur Municipal Schools, one of the smallest districts in New Mexico and a Yazzie plaintiff. “Governor Lujan-Grisham and new Public Education Department have expressed a strong commitment to our students and to public education. It is critical that they now step in and drive the major educational reforms and the big investments it will take to fix our schools.”

The court’s final judgement and order can be found here: http://nmpovertylaw.org/wp-content/uploads/2019/02/D-101-CV-2014-00793-Final-Judgment-and-Order-NCJ-1.pdf

Governor reverses Medicaid cuts in Centennial Care 2.0 waiver

Advocacy efforts conclude in a victory for families


SANTA FE—Governor Michelle Lujan Grisham reversed serious cuts to New Mexico’s Medicaid program yesterday following two years of advocacy efforts by the New Mexico Center on Law and Poverty, community organizations, and healthcare providers. Under the Susana Martinez administration, New Mexico’s Human Services Department had proposed major cuts to healthcare services as part of the Centennial Care 2.0 waiver, many of which were approved by the federal Centers for Medicare and Medicaid Services in December 2018.  

The New Mexico Center on Law and Poverty led the efforts to fight the cuts that would have implemented premiums for some Medicaid patients, cut retroactive coverage, and instituted mandatory co-pays.

“We owe a huge thanks to Governor Lujan Grisham for reversing these harmful measures and to the advocates and families who fought tirelessly over the last two years for the health and wellbeing of all New Mexicans,” said Abuko D. Estrada, supervising attorney at the New Mexico Center on Law and Poverty. “Piece by piece, we’ve successfully fought the cuts in the Centennial Care 2.0 waiver that would have led to thousands of families losing healthcare coverage and shifted an unfair burden of costs to healthcare providers and the healthcare system.”  

The governor’s rejection of the waiver is the latest in a series of positive actions the new administration has taken to improve the health and wellbeing of New Mexicans. Since taking office, Lujan-Grisham has set forth plans to reach uninsured New Mexicans who are eligible for Medicaid but not enrolled and help them apply. The governor has also been publicly supportive of bills, currently working their way through the legislature, that would open up a Medicaid Buy-in option for New Mexicans who do not otherwise have access to affordable healthcare coverage.