U.S. Department of Labor Sues Chain of RI Nails Salons for Retaliating Against Employees
Saturday, August 27, 2022
A chain of nail salons in Rhode Island along with its former owner are being sued by the U.S. Department of Labor for violating the Occupational Safety and Health Act (OSHA) as well as the Fair Labor Standards Act (FLSA) for failing to compensate employees properly -- and more.
The suit was filed in federal district court this week by U.S. Secretary Martin Walsh against VIP Nails and Spa with locations in East Greenwich, North Providence, Cumberland; its successor “VIP Emerald Nails, Inc." and former owner Steven Xingri Cao.
According to the lawsuit, an employee of VIP Nails and Spa said in the summer of 2020 that she was being sickened by a chemical disinfectant used by the salon.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTShe believed it was improperly diluted, and asked her manager — and Cao — to address the issue.
When they did not, she said she would contact OSHA.
When she filed a complaint, she was fired the next day.
The following month, the Department of Labor then opened an investigation into whether Cao — and the salons — were complying with the FLSA.
The federal government determined they were not.
Initial Complaint
According to the filing, it was now former employee Wing Ting Wong — who had worked for the salons as a nail technician — that prompted the investigation by the federal government.
“In June 2020, VIP Spa & Nails, Inc. Zhongwan Jin started as the manager at VIP Spa & Nails, Inc. in 2019,” states the suit.
“In June 2020, VIP Spa & Nails, Inc. began using a chemical disinfectant (the 'Sanitizer') to sanitize the salon,” the suit continues. “The Sanitizer’s label warns of potential health hazards from the Sanitizer. The Sanitizer’s label also provides dilution ratios for safe usage of the Sanitizer. As the manager of VIP Spa & Nails, Inc., Jin was primarily responsible for overseeing use and dilution of the Sanitizer.”
“On and prior to July 22, 2020, VIP Spa & Nails, Inc. did not properly dilute the Sanitizer with water before using the Sanitizer in the salon. Multiple employees of VIP Spa & Nails, Inc. experienced a stinging feeling in their throats and noses when the Sanitizer was sprayed. Jin ignored employees’ complaints about the Sanitizer,” the suit goes on to state.
According to the complaint, Wong, who has asthma, complained to Jin about the negative effects of the sanitizer on employees.
“Wong suffered another adverse reaction to the Sanitizer on July 22, 2020. Wong’s adverse reaction to the Sanitizer required medical treatment,” according to the suit.
Wong contacted Cao, who characterized Wong’s text messages about pursuing her legal rights and reporting to OSHA a “threat” and “blackmail.”
Wong filed her complaint with OSHA on July 23, 2020 and was fired on July 24, 2020.
Wage and Hour Investigation
In August 2020, the Department of Labor opened an investigation to determine whether Cao and the salons were complying with the Fai Labor Standards Act.
According to the investigation, the federal government determined Cao “instructed employees to sign documents reflecting false information about their employment.”
“Employees whom Cao instructed to sign documents containing false information about their employment believed they would be fired if they did not comply,” states the lawsuit.
Walsh and the Department of Labor determined Cao and the salons “failed to provide proper compensation for overtime hours worked to approximately 70 employees” and “paid some employees…less than the applicable minimum wage under the FLSA.”
“Cao, on behalf of the Nail Salons, sought to intimidate and coerce those who engaged in protected activity under both the FLSA and the OSH Act, such as filing complaints with the Secretary and participating in the Secretary’s investigations,” according to the lawsuit.
The federal investigation concluded in September 2020.
A year later, Cao “offered Jin the business at a discounted rate” and in October 1, 2021, sold the business.
Walsh is asking the court to require Cao and VIP Spa & Nails and its successor VIP emerald Nails to pay damages for their employment violations as well as unpaid wages.
Cao’s spouse Laura Huazi Li — who is listed in the suit as having controlled and operated the salons with her husband — did not respond to request for comment from Cao on Friday.
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