Labor Dep’t orders probe on employer

The Department of Labor ordered an investigation into the legal viability of a corporation whose business operations have been found questionable.

Hearing officer Jerry Cody issued this order and remanded to the Labor director an appeal regarding the denial of permit applications for 10 nonresident workers.

Records showed that L&B Corporation—which operates a store, a farm and a beauty salon—filed transfer applications for the 10 workers during the period from May through Oct. 2003. The applications were subsequently denied after the employer failed to correct deficiencies noted in each submission.

The appeal of the denial followed.

Cody said a preliminary review of the evidence raised serious questions regarding the case.

“First, it was unclear whether L&B Corporation has a representative or agent in the Commonwealth or whether L&B is actually being managed by its board of directors,” Cody said.

It appeared at the hearing that the corporation’s president and vice president reside in South Africa and have had no contact with L&B’s Saipan operations for many months.

According to the testimony of one of the workers, L&B’s local corporate secretary/treasurer and director, Kuan Leung, resigned his title and directorship in Oct. 2003. In Jan. 2004, Kuan resigned as L&B’s “local agent” as well.

Cody said there is no evidence that these positions were ever replaced.

The hearing officer also questioned whether Kuan had the legal authority to sign and submit employment contracts on behalf of L&B in late Oct. 2003, or after he had resigned as secretary/treasurer.

“Mr. Kuan’s conduct with respect to these applications is suspect and merits further investigation,” Cody said.

At the hearing, the testimony of worker Lin Jin Fu also suggested that he has been serving as L&B’s de facto manager on Saipan without the department’s approval or authorization.

Lin claimed he had been orally appointed manager by L&B’s president during a telephone conversation with him in about Jan. 2003. However, his permit application to be L&B’s manager was denied in April 2004, along with the rejected transfer applications.

Further, Lin stated that he has had no communication with L&B’s board in many months.

“Therefore, it is unclear how the ‘profits’ generated by L&B’s business operations have been handled,” Cody said.

“The evidence elicited at this hearing raises serious questions that can only be answered by means of an agency investigation,” he concluded.