Labor Department Alleges Wage Violations at Oklahoma Nonprofit Coffee Company

The U.S. Department of Labor has initiated legal action against Not Your Average Joe (NYAJ), a nonprofit coffee company based in Oklahoma, and its founder Tim Herbel. The lawsuit alleges numerous violations related to employee compensation, including issues with tip handling, minimum wage payments, overtime pay, improper record keeping, and child labor regulations.

Filed on September 11, 2026, in the U.S. District Court for the Western District of Oklahoma, the complaint demands payment for unpaid tips, minimum wage, and overtime compensation dating back to September 12, 2023, along with an equal amount in liquidated damages. At least 320 employees could be entitled to compensation as a result of this suit.

Organization’s Rapid Growth and Compliance Challenges

Herbel acknowledged that some compliance issues arose during the rapid growth of NYAJ, which has expanded from just four employees at its inception in 2019 to over 100 staff members with disabilities today. The organization operates across 11 retail locations and includes coffee roasting and baking operations.

In light of the complaints made by the Labor Department, Herbel stated that NYAJ has undertaken significant remedial measures. These include consulting with experts and updating their operational systems and human resources procedures to comply with labor laws. “We’ve updated our HR systems, we updated our payroll system, all tips are paid on checks now,” he disclosed. “We’ve brought in consultants to ensure we leave no gap.”

Detailed Allegations in the Complaint

Among the specific allegations in the federal lawsuit are claims that NYAJ improperly managed employee tips, failed to compensate certain hours worked, and categorized hours exceeding 40 per week as unpaid "volunteer time." The Labor Department's complaint details that NYAJ pooled tips without a clear distribution formula and suggests that Herbel independently determined each employee's share, distributing cash in unmarked envelopes without any record for clarification.

In a statement issued on September 15, NYAJ disputed many of the allegations, asserting, “We have owned any procedural error, corrected it, and will make employees whole for amounts legitimately owed. 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.”

Additionally, the lawsuit accuses NYAJ of violating child labor laws by allowing at least four minors, aged 15 to 17, to use prohibited industrial equipment and to work beyond permitted hours when school was in session. Herbel claims he was unaware that minors were not allowed to operate the mixers and indicated that this practice ceased once the Labor Department raised the concern.

A Lesson for Others in the Industry

Herbel expressed his resolve to avoid a prolonged conflict with the Labor Department, viewing the situation as a cautionary tale for other small businesses within the coffee community. He recommended that businesses invest in compliance audits to mitigate potential issues. “Invest in somebody to come and make sure all your processes are compliant,” he advised.

This lawsuit isn't an isolated incident; it follows a pattern of recent federal actions involving wage violations in the coffee sector. Earlier this year, the Labor Department recovered $85,197 for 36 workers at a Texas coffee establishment due to unlawful tipping practices. In another case, they sued New York’s White Noise Coffee for alleged overtime and record-keeping issues.

Interestingly, amid this controversy, NYAJ has also received accolades in the industry. Barista Sabrina Denham recently advanced from a U.S. Coffee Championships qualifier to a finalist in the U.S. Barista Championship, showcasing the quality talent associated with the organization. Furthermore, NYAJ secured a $100,000 grant in 2022 from Impact Oklahoma for its outreach efforts, which focus on blending coffee service with disability-inclusive education.

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