Chen v. Street Beat Sportswear, Inc.
United States District Court for the Eastern District of New York
226 F. Supp. 2d 355 (2002)

- Written by Sean Carroll, JD
Facts
Fen Chen and others (plaintiffs) worked for Street Beat Sportswear, Inc. (Street Beat) (defendant). Chen worked extremely long hours with only one or two days off each year. Chen was not paid overtime. The United States Department of Labor (DOL) previously had found that Street Beat violated the Fair Labor Standards Act. As a result, Street Beat signed an agreement with the DOL, agreeing to a compliance program to ensure that its factories complied with the Fair Labor Standards Act. The agreement required Street Beat to pay its workers minimum wage and overtime. The agreement also required Street Beat to pay DOL backpay that was owed to Street Beat’s employees. DOL would then disburse the money to employees such as Chen to make them whole. The agreement contained a strict timeline for such payments. The agreement did not have any language limiting its enforcement powers to DOL. Chen sued Street Beat for breach of contract, alleging that Street Beat violated the agreement with DOL and that he and other workers were third-party beneficiaries of the agreement. Street Beat filed a motion to dismiss, arguing that its workers were only incidental beneficiaries of the agreement and thus could not enforce it.
Rule of Law
Issue
Holding and Reasoning (Glasser, J.)
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