Conway’s Rhea Lana Riner, president of Rhea Lana’s, Inc. children consignment events, has been recognized by the Stevie Awards for Women in Business for defending her business model against government allegations of labor law violations.
Rhea Lana’s was originally audited by the Arkansas Department of Labor in January 2012 for unpaid labor.
The ADL concluded that consignors who volunteer to set up the large-scale children’s consignment events are not classified as employees within the definition of the Arkansas Minimum Wage Act.
However, the U.S. Department of Labor found Riner’s company to be in violation of the Fair Labor Standards Act, concluding that moms and families who volunteer up to 15 hours for an early shopping pass are classified as employees and should be paid a minimum wage.
Riner said her customers are outraged, and there have been no complaints about her events.
"They are discouraged that the government would step in and over regulate an industry that is doing nothing but good," she said. "Moms only volunteer if they want to."
Riner was a finalist in the Maverick of the Year category of the Stevie Awards for Women in Business. November 8, she was named a silver award recipient in a ceremony in New York City.
A maverick by definition is "an unorthodox or independent-minded person; a person who refuses to conform to a particular party or group."
Riner is living up to her title by defending the way she’s done business for the past 15 years.
"We’re at a place with our company and our industry where we have to protect the way we’ve held consignment events," Riner said.
In a column published this summer in USA Today, Riner said the Fair Labor Standards Act is archaic, holding back innovative businesses models like hers.
She compared the labor department’s findings to a hypothetical investigation into child labor laws applying to Build-a-Bear Workshop because young customers assemble their own teddy bears.
January 2012, Riner signed a consent agreement with the ADL to solely use consignment sellers or paid staff to set up and work her events.
Within the parameters of the agreement, Rhea Lana’s consented to pay 40 Arkansas employees nearly $6,400 in minimum wage and overtime back wages.
"That was the end of it as far as we’re concerned," said Denise Oxley, general counsel for the Arkansas Department of Labor.
Despite her feelings about the results of the investigation, Riner said she still believes the law is on her side, and that’s why she is working with the state to protect her business.
November 6, Sen. Mark Pryor and Sen. John Boozman introduced the Children’s Consignment Event Recognition Act or S. 1656 to the Senate "to clarify that volunteers at a children’s consignment event are not employees under the Fair Labor Standards Act of 1938."
"Arkansas parents looking to provide for their children are being unfairly targeted by the Department of Labor. This commonsense legislation preserves an innovative business model for consignment events and protects parents from unfair federal regulations," Boozman said.
The bill is currently in committee.
Riner said passing the bill will be an uphill battle, and the reality of it being passed is very challenging.
Oxley said any pending Senate bill would not affect state law.
Riner said any added expenses would have to be passed on to the moms and families who participate in the consignment events.
Rhea Lana’s currently gives back a 70 percent cut of each sale to consignors. Riner said she’s not ready to disclose how her business model is being affected, but she’s beginning to research the costs.
"If we have to carry an extra burden, we’re left with the only option of passing it on," she said. "In the end everyone loses."
(Staff writer Michelle Corbet can be reached by email at email@example.com or by phone at 505-1215. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net. Send us your news at www.thecabin.net/submit)