Federal court order requires 4 Detroit-metro Leo’s Coney Island franchises, owner to pay $515K in back wages, damages to 143 workers
DETROIT – The U.S. Department of Labor has obtained a consent judgment requiring the owner of four Leo’s Coney Island franchises in Clarkston, Dearborn, Livonia, and Sterling Heights to pay more than $500,000 in owed overtime wages and damages to 143 employees.
A federal consent judgment has ordered four Detroit-area Leo's Coney Island franchises and their owner to pay $515,857 in back overtime wages and damages to 143 workers, plus $73,784 in civil penalties. The U.S. Department of Labor's Wage and Hour Division alleged the restaurants paid straight-time rates for all hours worked, in violation of the Fair Labor Standards Act's time-and-a-half requirement for hours beyond 40 in a workweek.
The mechanics of the alleged scheme are worth noting. Investigators said the defendants maintained two sets of timecards—one for regular hours up to 40, another for overtime—and that the overtime records were regularly destroyed. That is not a clerical oversight. It is a structural choice: separate the paper trail so the liability never accumulates on a single document. The judgment, entered May 26, 2026, in the Eastern District of Michigan, names owner Kiriakos Vlahadamis and four corporate entities operating as Leo's locations in Clarkston, Dearborn, Livonia, and Sterling Heights.
The $10,000 in attorney fees is the most telling line in the release. That payment resolves a contempt petition alleging Vlahadamis and one of the entities violated a 2018 consent judgment requiring FLSA compliance. In other words, the same operator was already on the federal government's radar, had already signed a court order promising to follow the law, and allegedly continued the same conduct. The contempt resolution is folded into a larger judgment, which suggests the Department of Labor chose to consolidate rather than litigate the violation separately—a pragmatic move that gets money to workers faster but leaves the deterrence question open.
For the 143 affected employees, the outcome is concrete: back wages owed, damages awarded, and penalties extracted. For the franchise model itself, the case is a reminder that franchisors and franchisees alike remain individually liable for wage-and-hour compliance. The Labor Department's PAID program, mentioned at the close of the release, exists precisely for operators who would rather self-report than face this kind of judgment. The four Leo's locations did not take that route.