Labor Department Sues Oklahoma Nonprofit Not Your Average Joe

The U.S. Department of Labor has sued Oklahoma nonprofit coffee company Not Your Average Joe and founder and executive director Tim Herbel, alleging violations involving employee tips, minimum wages, overtime pay, record keeping and child labor.

The complaint, filed Sept. 11 in the U.S. District Court for the Western District of Oklahoma, seeks unpaid tips, minimum wages and overtime compensation dating to Sept. 12, 2023, plus an equal amount in liquidated damages, costs and an injunction against future violations. It identifies 320 employees who may be entitled to compensation.

In an interview with Daily Coffee News, Herbel said Not Your Average Joe (NYAJ) remains in settlement talks with the Labor Department.

Growth and Compliance

Herbel acknowledged some compliance failures as the nonprofit organization, which maintains a mission to train and employ people with disabilities, rapidly expanded. NYAJ has grown from four employees upon its founding in 2019 to several hundred today, including more than 100 people with intellectual, developmental or physical disabilities.

NYAJ and its affiliated brands now span 11 retail locations, plus coffee roasting and baking operations.

Herbel said that once the Labor Department outlined ways in which NYAJ had not met “the letter of the law,” the organization took immediate steps toward remediation, including consulting with other operators and updating operational systems.

“We updated our HR systems, we updated our payroll system, all tips are paid on checks now, the records go back far enough,” Herbel said. “We’ve brought in consultants to make sure we leave no gap.”

Multiple Allegations

The federal lawsuit alleges that NYAJ kept employee tips, failed to pay for some hours worked and treated some work beyond 40 hours per week as unpaid “volunteer time.”

According to the complaint, NYAJ pooled tips but did not use a defined formula for distributing them. The Labor Department alleges that Herbel determined how much each employee received, distributing cash in unmarked envelopes without records explaining the amounts or applicable pay periods. Herbel broadly disputed the allegation. 

“We have owned any procedural error, corrected it, and will make employees whole for amounts legitimately owed,” NYAJ said in a press release issued Sept. 15. “We will also be equally committed to factual accuracy where the government’s allegations do not reflect how our systems actually operated. Protecting employees and telling the truth about what happened are not competing values. We intend to do both.”

The lawsuit also alleges that NYAJ directed at least four workers ages 15 to 17 to regularly operate industrial vertical dough mixers generally prohibited for minors under federal child-labor rules. At least one minor was also allegedly directed to work more than three hours on a day when school was in session.

Herbel said he did not know minors were prohibited from using the mixer and that NYAJ stopped the practice after the Labor Department raised the issue.

A Cautionary Case

Herbel told DCN he has no intention to engage in a battle with the Labor Department, but characterized the case as a potential cautionary tale for other small businesses and organizations in the coffee industry.

“Invest in somebody to come and make sure all your processes are compliant,” he said.

The case follows other recent federal wage-and-hour actions involving coffee businesses. Earlier this year, the Labor Department recovered $85,197 for 36 workers at Texas-based Nate’s Coffee & Cocktails following an investigation into an unlawful tip pool.

In 2024, the agency sued New York City’s White Noise Coffee over alleged overtime and record-keeping violations. In 2023, federal investigators recovered $300,000 in back wages and damages for 492 workers at Louisville, Kentucky-based Heine Brothers Coffee after finding improper handling of employee tips.

NYAJ’s coffee achievements have also attracted positive attention. NYAJ barista Sabrina Denham advanced from a 2023 U.S. Coffee Championships qualifier to compete in the U.S. Barista Championship, while nonprofit grant organization Impact Oklahoma awarded NYAJ $100,000 in 2022 for an outreach project combining coffee service and disability-inclusion education.

Comments? Questions? News to share? Contact DCN’s editors here. For all the latest coffee industry news, subscribe to the DCN newsletter.