Kevin D. Docherty

On the morning of January 6, 2016, Administrative Law Judge Steven D. Bell of the United States Department of Labor went with the lawyers for both sides to the Roppe rubber-flooring factory in Fostoria, Ohio, where Seneca Re-Ad Industries ran a sheltered workshop, and watched the Creform line while it ran. Between thirty and forty workers sat or stood at stations along the line. Each typically took a sample of Roppe flooring, already cut, printed, and drilled, from each of two bins, set the hole in it over a metal post on a wooden jig so that the chain hanging from the post ran through it, and slid the jig down the table to the next station. At the end of the line the chain was closed, and the bundle of color samples was inspected and shipped.

Ralph “Joe” Magers, who is legally blind, worked the line by touch. “He has to feel for the pieces, the holes, and then put them on the jig,” Laurie Fretz, a Seneca supervisor, testified that week. In his decision Judge Bell called the jobs “simple and straightforward” and found that they had been “designed so they might be performed by persons with all different types of disabilities.”

Seneca set the pay for that work by formula. The nonprofit operated the workshop for people with developmental disabilities under a contract with the Seneca County Board of Developmental Disabilities. It surveyed what comparable jobs paid in Seneca County, tested a nondisabled “standard setter” to learn how fast the work could be done, tested each disabled employee on the same work every six months, and multiplied the prevailing wage by the ratio between the two results. A certificate from the Labor Department’s Wage and Hour Division under Section 14(c) of the Fair Labor Standards Act allowed Seneca to pay whatever the formula produced, even when the figure fell below the federal minimum wage. Mark Felton was paid as little as $2.49 an hour, Magers as little as $2.02, and Pamela Steward as little as $2.00.

The three did finishing and packaging work at the plant. Steward is blind in one eye and has been diagnosed with an intellectual disability; Felton has Asperger’s Syndrome. Seneca’s tests put all three below the standard setter, and Seneca later told a federal judge they had missed the production standard “almost all of the time.” Seneca never proved that their disabilities caused the shortfall, and that failure decided the case before Judge Bell, the Labor Department’s Administrative Review Board, and the United States District Court for the Northern District of Ohio.

Kevin D. Docherty of Brown, Goldstein & Levy in Baltimore joined the workers’ legal team in October 2017 and represented them, alongside Disability Rights Ohio, when Seneca took the case back to the Board in 2018 and then sued the Secretary of Labor in federal court. The case began with a petition in November 2015 and reached judgment in January 2024, when Judge Jeffrey J. Helmick affirmed the Board. The Board’s rule, which Judge Helmick upheld, puts on an employer holding a 14(c) certificate the burden of proving that a worker’s disability lowers that worker’s productivity in the job at hand. Judge Helmick ordered Seneca to pay the three the minimum wage, back pay for the whole period it had paid them less, and an equal amount in liquidated damages.

Among the First to Petition

Section 14(c)(5)(A) of the Act lets a worker paid a special minimum wage petition the Labor Department to review the rate. On November 17, 2015, Felton, Magers, and Steward filed a Petition for Review of Wages with the Wage and Hour Division. Disability Rights Ohio brought it with the support of the National Federation of the Blind. The Autistic Self Advocacy Network and Docherty’s firm, Brown, Goldstein & Levy, were among the filers too. The National Council on Disability, an independent federal agency, counted the three among the first workers with disabilities ever to use the process. The statute allows a subminimum wage only for a worker “whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury,” and the department’s regulation requires that the impairment exist “for the work to be performed.”

Judge Bell heard the case from January 4 to 8, 2016, at the Seneca County Common Pleas Court in Tiffin. Magers was 50, Steward 53, and Felton 23. Magers had worked for Seneca for about six years and had held other jobs before, including three years at Ticketmaster and work in a call center. He did not drive. “I mostly walk. I will take SCAT transportation from time to time,” he testified, referring to the county’s paratransit service. Steward had worked at the Fostoria plant for nearly six years. “The only reason I do choose to work there is because of transportation,” she said. She also testified, “I’m able to get along with the people better there.” Felton had been there about four years. He had held an Ohio driver’s license since 2014, had no car, and lived with his parents. From mid-August through December 2015, Magers averaged about 13 paid hours a week, Steward about 14, and Felton about 16.5.

Less Than a Minute, Recorded as an Hour

Seneca’s formula depended on its time studies, and the three described them from the witness stand. Magers said Terry Stocker, a supervisor, did the timing. On how often he was tested, he said, “Usually about every six months.” On how long each test lasted: “Probably less than a minute.” Felton said of his 2013 test, “It was probably less than a minute, I’m pretty sure.” Steward said Stocker or Rodney Biggert, the division manager, would come over and give her about eight jigs. “I’m generally pretty fast at my work,” she said. “I don’t even think it lasts more than a minute.” Seneca’s Hourly Job Sampling forms recorded every test as lasting “1.000000 hour.” Judge Bell found that the tests had lasted only a few minutes and that Seneca had extrapolated the results from that short look to a full hour.

The standard the three were measured against was set, typically, by timing supervisors, and it moved. On September 30, 2013, three standard-setter tests lasted 52, 47, and 59 seconds. Over about four years, the hourly standard on the Creform line rose from 816 jigs to 1,607. “No explanation for this 100 percent increase in performance was offered at the hearing,” Judge Bell wrote, and the method of production on the line had not changed while it happened.

On jobs Seneca paid by the piece, each of the three had, on some days, earned more than the minimum wage. Felton made more than $14.00 an hour on a press machine on September 4, 2015; Steward made $11.84 an hour on a drill press on October 2; Magers made nearly $9.00 an hour on October 16 on a job called “Affix Screw and Remove.” On the hourly Creform line in the last months of 2015, the formula paid Felton $4.11, Steward $3.22, and Magers $3.00 and then $3.15.

Seneca presented evidence that the three were less productive than workers without disabilities; Judge Helmick later called Judge Bell “notably dismissive” of that evidence. Biggert and Fretz testified about what they had seen of the three at work, and Mark Knuckles, who had once worked for the Wage and Hour Division and had run Mark Knuckles Associates since 1986, testified as Seneca’s expert after running his own standard-setter tests and testing the three on the Creform line. Asked whether he had walked away from the line during a test, Felton said no. Asked whether he did not recall or had not done it, he answered, “I didn’t.” Of the observations that Knuckles, Biggert, and Fretz described, Judge Bell wrote that “it seemed as though a scripted narrative was being played out.” He found Knuckles’s testimony about the workers’ performance “not persuasive.”

Judge Bell found no medical, psychological, or other evidence explaining, “in a cause-and-effect manner,” why the three fell short of Seneca’s standard. “I find there to be no proof in the record that Petitioners are intrinsically incapable of performing at the level of their non-disabled supervisors because of Petitioner’s visual impairments, intellectual disability or Asperger’s disorder,” he wrote. On February 2, 2016, he ruled that Seneca had “failed to demonstrate that the Petitioners are ‘impaired by a physical or mental disability . . . for the work to be performed’ by each Petitioner at the Respondent’s Fostoria, Ohio manufacturing facility,” and that by paying them less than the minimum wage Seneca had violated Section 206 of the Act. He ordered that each of the three be paid the minimum wage, effective immediately, and awarded back pay and an equal amount in liquidated damages for December 28, 2012, through December 25, 2015, the period covered by the wage records Disability Rights Ohio had put in evidence.

“The opinion highlights that each of our clients brings valuable employment skills to the Seneca Re-Ad facility, and their value as workers should be respected,” said Barbara Corner, the Disability Rights Ohio lawyer who led the workers’ case before Judge Bell.

Who Has to Prove Why

Seneca appealed to the Administrative Review Board, arguing that the workers’ disabilities did impair their productivity and that liquidated damages were not available. In January 2017 the Board affirmed Judge Bell on liability and held that an employer paying a 14(c) wage bears the burden of showing a causal link between the worker’s disability and the worker’s lower productivity. Seneca’s comparison of each worker with a standard setter showed lower output. It did not establish “that the disabled individual’s disability is the reason for the lower productivity.”

The Board looked at the jobs. It found “nothing inherent” in the work the three performed “that would make someone with blindness, an intellectual disability, or Asperger’s Syndrome necessarily less productive at those tasks.” It also pointed to the breadth of Seneca’s own claim: that “three very different kinds of disabilities . . . all reduce productive capacity for the same type of work.”

The Board further held that the limitations period of the Portal-to-Portal Act did not apply to a petition for review of a special minimum wage. It held Seneca liable for the difference between what it had paid the three and the federal minimum wage, plus an equal amount as liquidated damages, and returned the case to Judge Bell to recalculate the award.

The Lawyer for Felton, Magers, and Steward

Seneca kept contending that the Labor Department had no power to award liquidated damages in its own proceedings. On October 6, 2017, while the case was back before Judge Bell, the three workers filed their own suit under the Fair Labor Standards Act in the Northern District of Ohio to preserve their right to seek all relief. On October 12 they moved for Docherty’s admission to represent them in that court, the court granted the motion on October 18, and on November 8 Docherty and Anthony J. May of Brown, Goldstein & Levy, with Regina Kline, filed their appearances. In February 2019, on the workers’ motion, Judge Helmick stayed the suit while the Labor Department proceedings ran their course.

Docherty graduated magna cum laude from Eastern Mennonite University in 2005 and taught middle school social studies in the Baltimore City Public Schools before law school. He graduated cum laude from the University of Maryland Francis King Carey School of Law in 2012, clerked for Judge William M. Nickerson of the United States District Court for the District of Maryland, and joined Brown, Goldstein & Levy in 2013. At the firm, where he is a partner, he helps lead the commercial litigation practice and represents individuals in civil-rights cases, employment disputes, personal-injury matters, and federal and state criminal prosecutions. He has argued before the Fourth Circuit and the D.C. Circuit. He has also served as court-appointed counsel for a criminal defendant on appeal in the Fourth Circuit. Since 2019 he has served on the board of directors of the Homeless Persons Representation Project.

In Baltimore County, he represented a woman who challenged the constitutionality of her arrest by a county police officer. He negotiated a settlement that prohibits Baltimore County police officers from arresting or detaining anyone, or extending an arrest or detention, because of that person’s immigration status.

Back Pay From the First Day

Judge Bell’s first award had reached back only to December 28, 2012, because the parties had built the record on the assumption that the limitations period applied. With that assumption gone, he reopened the record, held another hearing on June 29, 2018, and on August 1, 2018, ordered back pay and liquidated damages in three blocks: from the start of each worker’s employment through December 27, 2012; from December 28, 2012, through late December 2015; and a final 38-day period that ended on February 2, 2016, when Seneca began paying each of the three the legal minimum wage. “In a follow-up hearing in June 2018, Judge Bell ordered back pay for the entire time our clients worked at Seneca Re-Ad,” Kerstin Sjoberg, the executive director of Disability Rights Ohio, said later.

Seneca appealed again. It argued that Judge Bell had no authority to award back pay for the years before December 28, 2012, that he should not have reopened the record, and that liquidated damages were unavailable. For the first time, it also argued that Judge Bell had not been appointed in the manner the Constitution’s Appointments Clause requires and that his decisions were void. Docherty and Anthony J. May of Brown, Goldstein & Levy appeared for the three workers before the Board, together with Rebecca M. Babarsky and Kerstin Sjoberg of Disability Rights Ohio and Marc Maurer of the National Federation of the Blind. Lawyers from the Labor Department’s Office of the Solicitor appeared for the Wage and Hour Administrator, and Stephen P. Postalakis and David S. Kessler of Haynes Kessler Myers & Postalakis appeared for Seneca.

On September 14, 2020, the Board adopted Judge Bell’s decision on remand and ordered Seneca to pay the amounts he had calculated. The Board reasoned that Judge Bell’s original order had entitled the workers to the minimum wage for every hour of covered employment, that the 2017 remand had set no time limit, and that an administrative law judge may reopen the record on remand to take more evidence. The Board treated the liquidated-damages question as settled by its 2017 decision. It refused to consider the Appointments Clause objection because Seneca had never raised it before Judge Bell.

Seneca Sues the Secretary of Labor

Seneca then sued the Secretary of Labor in the Northern District of Ohio under the Administrative Procedure Act, appealing both of the Board’s decisions. Brown, Goldstein & Levy and Disability Rights Ohio moved for the three workers to intervene with a counterclaim for the back pay and liquidated damages the Labor Department had awarded them, and asked the court “to ensure that, at minimum, the funds they are owed are secured during the pendency of this appeal.”

Seneca opposed. It argued that intervention would “unjustifiably delay and multiply the proceedings” and that the workers meant to seek more than the federal minimum wage, along with attorney’s fees for the administrative case. The workers answered that they would seek nothing beyond the Labor Department’s award and that their counterclaim did not ask for fees. On September 28, 2021, Judge Helmick granted permissive intervention under Rule 24(b), finding that the motion was timely, that the workers’ claims shared common questions with Seneca’s suit, and that, given the workers’ assurance, Seneca’s concerns were unfounded. He then ordered Seneca to pay the workers the amount due, post a bond in the same amount, or move to stay enforcement, and Seneca posted a supersedeas bond of $87,026.64, the combined amount owed to the three, as security while the case was pending.

Proof About That Worker and That Job

Judge Helmick decided the cross-motions for summary judgment on January 4, 2024. He took the constitutional argument first. Labor Department rules required each party to list the “issues of law to be determined” in its prehearing statement, and Seneca had never told Judge Bell that his appointment was defective. Judge Helmick relied on the Sixth Circuit’s decision in Joseph Forrester Trucking v. Director, Office of Workers’ Compensation Programs, which had put the preservation rule in baseball terms: “Just like a runner must tag every base before running to home plate, a party must touch each base of the preservation process during the administrative and court proceedings.” The same decision held that administrative law judges can entertain Appointments Clause challenges, which disposed of Seneca’s claim that objecting before Judge Bell would have been futile. Seneca’s failure to exhaust its administrative remedies barred the argument in court.

Seneca’s main argument on the merits was that the Board had made new law. It called the burden ruling “improper rule making” that created “a new evidentiary standard that did not previously exist.” Seneca relied on the Wage and Hour Division’s Field Operations Handbook, which calls for staff notes on how a disability affects productivity; Judge Helmick pointed out that Seneca had left off the second half of that clause, which identifies the staff observations that count. The Board, he wrote, had confronted “important questions of first impression,” and its reading of the statute and regulations deserved deference because it was not “plainly unreasonable.”

Seneca also argued that the Board had ignored the evidence of poor productivity, including tests showing the workers below the production standard “almost all of the time.” Judge Helmick answered that the Board had discussed that evidence, had placed on Seneca the “burden to show the connection” between the lower productivity and the disabilities, and had concluded that “it failed to meet that burden.” He quoted the Board: the statute “does not permit the paying of a subminimum wage to all disabled individuals, only to those whose earning or productive capacity is in fact impaired by their disability.” Without that showing, Seneca’s 14(c) certificate gave it no exemption from the minimum wage set by Section 206.

Seneca’s last argument was that the Labor Department had no power to award liquidated damages in its own proceedings. Section 14(c)(5) lists no specific remedies, but Seneca did not contend that workers who petition under it are entitled to none. Judge Helmick looked to Section 216, the Act’s penalties section, which makes an employer that violates the minimum-wage requirement liable to the affected employees for their unpaid wages and an equal amount as liquidated damages. He deferred to the department’s reading, noting that Seneca had cited no case in which a court had rejected it. He granted summary judgment to the Secretary, affirmed the Board, and ordered “payment of minimum wages, back pay, and liquidated damages to the Employees, consistent with the ARB’s 2017 and 2020 decisions.”

What They Had Known All Along

“Eight years ago, a Department of Labor Administrative Law Judge affirmed what Pamela Steward, Joe Magers, and Mark Felton have known all along: that they are not disabled for the work they perform at Seneca Re-Ad, and that they cannot be paid less than the minimum wage,” Docherty said on January 10, 2024. “The court’s ruling upholding the Department of Labor’s landmark decision is an important step forward in the fight to curtail payment of subminimum wages to individuals with disabilities,” he added.

Sjoberg said the judge had made clear “that a business cannot just claim that an employee’s disability reduces their productivity, they have to show a clear connection between the two in order to pay them subminimum wages.” She added that “there needs to be some type of evaluation and the evidence can’t be based on observations or anecdotal in nature.” Mark Riccobono, president of the National Federation of the Blind, said that “after nearly a decade of litigation, a federal court has affirmed, for the first time, that disability by itself cannot be used to demonstrate lower productivity even under the terms of Section 14(c) of the Fair Labor Standards Act.”

The parties settled Seneca’s suit against the Secretary within the next three months, and on April 12, 2024, the three workers dismissed the suit they had filed in 2017.

By 2024, Docherty and his firm had represented workers paid under Section 14(c) for over a decade. That year the Washington Post published a three-part investigation of the program. The Post counted about 40,000 disabled people working under it at nearly 800 facilities in 37 states, and found that at least 38 percent of current employers in the program had violated pay and other rules meant to protect those workers. Docherty told the Post that those practices are hard to fight because of what litigation can cost and how difficult the legal system is to navigate. “Even when it comes to enforcing their rights, people with disabilities are at a disadvantage,” he said.

In the January 2024 opinion, Judge Helmick had acknowledged what the rule would demand of employers. “While the ARB’s ruling will require employers to gather more evidence than they previously did to justify payment of subminimum wages,” he wrote, “a fair reading of the statute, the regulations, and other DOL guidance demonstrates that this requirement is not ‘new.’” Under the rule the three Fostoria workers won, an employer that wants to pay a disabled worker less than the minimum wage has to show, through evidence about that worker and that job, that the disability is the reason for the lower output. Seneca had tested Felton, Magers, and Steward every six months and never made that showing.