Outten & Golden Obtains Consent Decree and Monetary Relief in Wage Theft Case Against Work-Based “Recovery” Program

PR Newswire
October 7, 2021

On September 29, 2021, Outten & Golden obtained court approval of a settlement agreement and consent decree that prohibits the individuals who allegedly ran an unlicensed, worked-based “recovery” program with multiple citations from the Department of Labor, from operating or directing a rehabilitation program in the state of North Carolina. The settlement and consent decree enforcing it follow Outten & Golden’s recovery of $805,000 through settlements with the businesses that contracted with the recovery program. Plaintiffs are also represented by the North Carolina Justice Center and Patterson Harkavy LLP.

Plaintiffs alleged that Defendants Jennifer Warren and Phillip Warren operated a purported substance abuse program, Recovery Connections Community (RCC), where they forced individuals struggling to overcome substance abuse and addiction to work for local businesses without pay while housing them in unsanitary conditions, and without providing any real substance abuse treatment. The businesses paid the program the wages that should have gone to its residents, the lawsuit alleged. In 2019 and 2020, Plaintiffs recovered $805,000 through settlements with the businesses who contracted with the program. On September 29, 2021, the Court entered a consent decree that prohibits Jennifer Warren and Phillip Warren from owning, operating, or directing a substance abuse treatment center in North Carolina.

“We are pleased that we were able to achieve a settlement with the program’s operators for important programmatic relief,” Stewart said, “on top of our prior settlements with the offsite employers for significant monetary relief.” The businesses that allegedly employed the Plaintiffs included fast food restaurants and senior living facilities. The program claimed this employment provided its residents training in vocational skills, but in reality, the lawsuit alleged, it allowed the defendants to profit from an unpaid labor pool.

In the complaint filed in the Eastern District of North Carolina, Plaintiffs alleged that RCC deceptively presented itself as a substance abuse recovery service provider, but the defendants verbally abused the residents in what they claimed was therapy and provided no bona fide counseling or vocational training. Plaintiffs alleged that they were forced to live in unsafe, unsanitary, and inadequate conditions without air conditioning or running water; in some instances, up to twelve people were expected to live in 936 square feet.

Plaintiffs were then expected to work up to 16 hours a day for the program, performing personal work for Jennifer and Phillip Warren, and performing work for local businesses, including adult care facilities and local restaurants, according to the complaint. Plaintiffs allege they were not paid for any of this work: local businesses did not pay residents wages, but instead contracted with the Warrens and the program for residents’ labor. According to the complaint, the Warrens and the program pocketed the residents’ pay, while the businesses benefitted from access to a pool of sub-market rate labor.

“We hope that this lawsuit will put rehabilitation programs nationwide on notice that they should seriously evaluate any working arrangements,” Stewart commented, “and if work is to be a part of a live-in rehabilitation program, avoid overwork and ensure that patients are paid fairly for any work they perform.”

The case was filed in the Eastern District of North Carolina Western Division.
Case 5:18-cv-00466-BO