A Detroit-area Leo’s Coney Island franchisee is on the hook for nearly $600,000 after a federal wage case accused the operator of paying overtime hours at the regular rate and keeping a second set of timecards. The settlement covers 143 workers across four metro Detroit restaurants. It brings a long-running dispute over employee pay to a costly close.
According to the Detroit Free Press, Sterling Ponds Plaza LLC and Kyriakos “Ken” Vlahadamis must pay $515,857 in overtime wages and damages, along with $73,784 in penalties and $10,000 in attorney fees. The parties reached a global settlement on June 15, resolving the case without a trial verdict.
The dispute centers on Leo’s Coney Island locations in Clarkston, Dearborn, Livonia and Sterling Heights. The ownership group allegedly paid employees straight-time rates for hours worked beyond 40 in a week, rather than the legally required time-and-a-half rate.
The U.S. Department of Labor previously said investigators found two sets of timecards during a 2024 investigation: one reflecting regular hours and another tracking overtime. Investigators also alleged that overtime records were regularly destroyed, according to a Department of Labor release.
How The Alleged Pay Scheme Worked
The alleged practice was straightforward: hours above the 40-hour threshold were separated from the main time record, then paid at the employee’s normal hourly rate instead of the overtime rate. The Detroit Free Press reported that the settlement requires the franchisee and Vlahadamis to compensate workers for both unpaid overtime and related damages.
The case also followed an earlier federal wage dispute. A 2018 consent judgment had already required Vlahadamis and one of his companies to comply with federal overtime and recordkeeping rules, while a 2024 court order required the operators to maintain accurate timecards and avoid retaliation against employees who cooperated with investigators.
What Federal Overtime Rules Require
Under the Fair Labor Standards Act, covered, nonexempt employees generally must receive at least one-and-a-half times their regular rate for every hour worked over 40 in a workweek. The Department of Labor’s overtime guidance also makes clear that employers must keep accurate records of wages and hours.
That requirement is why the timecards matter as much as the dollar amount. A federal judge denied the defendants’ motion to compel in November 2025, leaving the Labor Department’s investigation and witness-related disputes intact as the case moved toward resolution, according to a federal court order.
The Labor Department’s 2024 action described the restaurants as having a history of overtime and recordkeeping problems, including an earlier consent order. The latest settlement does not change the broader Leo’s brand, which has more than 70 Michigan locations, but it puts the spotlight squarely on the four restaurants connected to this ownership group.
