A Nonprofit That Employs Disabled Workers Is Being Sued Over How It Paid Them

Keypoints:

• The US Department of Labor sued Oklahoma nonprofit Not Your Average Joe and founder Tim Herbel
• Allegations include withheld tips, unpaid overtime, and prohibited child labor
• The lawsuit identifies 320 employees who may be owed compensation
• The organization employs people with intellectual, developmental, and physical disabilities alongside other staff
• Herbel says the nonprofit is now in settlement talks and has updated its payroll systems

The US Department of Labor filed suit on September 11 against Not Your Average Joe, an Oklahoma nonprofit coffee and bakery chain, and its founder Tim Herbel, alleging violations of the Fair Labor Standards Act spanning tips, overtime, recordkeeping, and child labor rules. The complaint, filed in the Western District of Oklahoma, identifies 320 employees who may be entitled to compensation dating back to September 2023.

The specific allegations center on how tips got handled. The Labor Department says Herbel pooled employee tips without a defined distribution formula, then sometimes paid them out weeks or months after they were actually earned. The complaint also alleges the company failed to pay overtime correctly and allowed minors to perform work prohibited under federal child labor law.

What makes the case land differently than a typical wage dispute is who the company employs. Not Your Average Joe has grown from four employees at its 2019 founding to several hundred today, including more than 100 people with intellectual, developmental, or physical disabilities, spanning 11 retail locations plus coffee roasting and baking operations. 

Herbel didn't dispute the substance of the findings when he spoke with Daily Coffee News, acknowledging compliance gaps opened up as the organization expanded quickly. "We updated our HR systems, we updated our payroll system, all tips are paid on checks now," he said, adding that the nonprofit remains in settlement talks with the Labor Department while working through the underlying claims.