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DABC sued over independent contractors, unpaid wages

DABC renews liquor store security contract
Posted at 5:07 PM, Sep 16, 2021
and last updated 2021-09-16 19:07:49-04

SALT LAKE CITY — A lawsuit has been filed against Utah's Department of Alcoholic Beverage Control, accusing the agency of denying people millions in wages and benefits dating back decades.

The lawsuit, filed in federal court, accuses the DABC of improperly classifying 13 people as "independent contractors" for package agencies when they should have been treated like other state employees. The plaintiffs work in stores from across rural Utah including Sanpete, Wayne, Millard, Beaver and Garfield counties.

A package agency is a DABC-controlled liquor store that is operated by contract. They are most often utilized in rural areas, as is the case with the plaintiffs, to save the state some operating costs. The DABC will also allow a distillery or brewery to run a package agency to specifically sell their merchandise.

Package agents are paid a flat fee for operating DABC stores (and cannot turn a profit as state liquor sales are a legally mandated cost-plus 88% markup). As a liquor control state, Utah controls the sale and supply of alcohol.

The lawsuit alleges the DABC retains exclusive control over training, hiring and sales decisions made by the rural package agency operators yet also refuses to count them as state employees. Instead, they were counted as "independent contractors" denying them overtime wages and benefits.

"Defendants have structured their relationship with Plaintiffs and Collective Members in such a way that Plaintiffs and Collective Members meet all of the statutory requirements of state store managers and employees," the lawsuit said.

When the 13 package agency employees asked for a review, they were told by the DABC and the Utah Attorney General's Office that they were "independent contractors." Their lawyers claimed that when they raised concerns about their work hours, the lack of wages and benefits, DABC staffers threatened to retaliate against them by canceling their contracts.

The lawsuit seeks at least $8.6 million in damages and to have them listed as state employees.

"Initiating an action against a state entity is a difficult choice that has effectively put a target on our clients’ backs, but they feel strongly about their responsibilities to each other, their families, and all other similarly situated workers," said the plaintiffs attorney, Erika Larsen, in a statement announcing the lawsuit.

A spokesperson for the DABC declined to comment, citing the commencing litigation.