The U.S. Department of Labor has initiated legal action against Not Your Average Joe (NYAJ), an Oklahoma-based nonprofit coffee company dedicated to training and employing individuals with disabilities, along with its founder and executive director, Tim Herbel. The lawsuit, filed in the U.S. District Court for the Western District of Oklahoma on September 11, 2026, alleges a litany of violations concerning employee tips, minimum wages, overtime pay, accurate record-keeping, and child labor regulations. The department is seeking to recover unpaid wages, tips, and overtime compensation dating back to September 12, 2023, along with an equal amount in liquidated damages, legal costs, and an injunction to prevent future transgressions. The complaint identifies a significant number of employees, estimated at 320 individuals, who may be entitled to compensation.
In response to the allegations, Tim Herbel stated in an interview with Daily Coffee News that Not Your Average Joe is actively engaged in settlement discussions with the Department of Labor. He acknowledged that as the nonprofit experienced rapid growth, some compliance issues arose, a situation he attributed to the organization’s swift expansion rather than intentional disregard for regulations.
The Rapid Ascent and Compliance Challenges of Not Your Average Joe
Founded in 2019 with a mission to foster inclusivity and provide meaningful employment opportunities for individuals with disabilities, Not Your Average Joe has seen remarkable growth. From its humble beginnings with just four employees, the organization has expanded to employ several hundred individuals, including over 100 people with intellectual, developmental, or physical disabilities. This expansion has led to the establishment of 11 retail locations across multiple communities, alongside robust coffee roasting and baking operations, all under the umbrella of NYAJ and its affiliated brands.
Herbel emphasized that upon being alerted to the specific areas where NYAJ had fallen short of "the letter of the law," the organization took immediate and decisive action towards remediation. This proactive approach included seeking counsel from industry peers and undertaking a comprehensive overhaul of its operational systems. "We updated our HR systems, we updated our payroll system, all tips are paid on checks now, the records go back far enough," Herbel explained. "We’ve brought in consultants to make sure we leave no gap." This commitment to rectifying any shortcomings is underscored by their press release from September 15, which stated, "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."
Unpacking the Federal Allegations: A Multifaceted Lawsuit
The federal lawsuit outlines several key areas of alleged non-compliance by Not Your Average Joe. A central tenet of the complaint is the accusation that NYAJ improperly handled employee tips, retaining some and failing to distribute them according to established legal frameworks. Furthermore, the Department of Labor alleges that the organization did not compensate employees for all hours worked, with some periods of work exceeding 40 hours per week reportedly being classified as unpaid "volunteer time," a practice that contravenes federal wage and hour laws.
The complaint details that tips were pooled by NYAJ, but the distribution mechanism lacked a clearly defined and legally compliant formula. The Department of Labor contends that Tim Herbel exercised discretionary control over the allocation of these pooled tips, often distributing cash in unmarked envelopes without maintaining adequate records to document the amounts disbursed or the specific pay periods to which they pertained. Herbel has broadly contested the specifics of this particular allegation, suggesting that while procedural errors may have occurred, the intent and overall practice were aimed at ensuring fair compensation.
In addition to wage and hour concerns, the lawsuit also addresses alleged violations of federal child labor laws. The complaint asserts that NYAJ directed at least four workers, aged 15 to 17, to operate industrial vertical dough mixers. These types of machines are generally prohibited for minors under federal child labor regulations due to inherent safety risks. Moreover, the lawsuit claims that at least one minor was reportedly instructed to work more than three hours on a school day, exceeding the permissible hours for young workers during instructional periods. Herbel has stated that he was unaware of the prohibition regarding minors operating the dough mixer and that the practice was ceased immediately after the Department of Labor brought the issue to their attention.
A Cautionary Tale for the Industry
Tim Herbel views the current situation not as a personal battle, but as a potentially significant cautionary tale for other small businesses and organizations operating within the coffee industry, particularly those with social missions. He strongly advises, "Invest in somebody to come and make sure all your processes are compliant." This sentiment highlights the complex regulatory landscape that businesses, especially those experiencing rapid growth, must navigate to ensure adherence to labor laws.
This case involving Not Your Average Joe is not an isolated incident within the coffee sector. The U.S. Department of Labor has been actively pursuing wage and hour violations across various coffee-related businesses in recent years. For instance, earlier in 2026, the department successfully recovered $85,197 for 36 workers at Nate’s Coffee & Cocktails in Texas following an investigation into an unlawful tip pooling arrangement. Prior to that, in 2024, the agency filed a lawsuit against White Noise Coffee, a New York City-based coffee chain, citing alleged violations related to overtime pay and record-keeping. In 2023, federal investigators secured $300,000 in back wages and damages for 492 employees of Louisville, Kentucky-based Heine Brothers Coffee after uncovering improper handling of employee tips. These recurring actions underscore a pattern of increased scrutiny and enforcement by the Department of Labor concerning labor practices within the coffee industry.
Despite the current legal challenges, Not Your Average Joe’s commitment to its mission and its impact on the community have not gone unnoticed. The organization’s dedication to fostering talent within its workforce has yielded notable successes. Sabrina Denham, a barista at NYAJ, achieved significant recognition by advancing from a 2023 U.S. Coffee Championships qualifier to competing in the prestigious U.S. Barista Championship. Furthermore, the nonprofit grant organization Impact Oklahoma acknowledged NYAJ’s valuable contributions by awarding them a $100,000 grant in 2022. This funding was earmarked for an outreach project aimed at integrating coffee service with comprehensive disability-inclusion education, further solidifying NYAJ’s role as a beacon of social enterprise.
The ongoing legal proceedings against Not Your Average Joe present a complex narrative of a mission-driven organization grappling with the intricacies of labor law compliance amidst significant growth. The case serves as a stark reminder of the critical importance of robust internal systems and professional guidance to ensure adherence to federal regulations, even for businesses with the most commendable social objectives. The outcome of the settlement talks and any potential court rulings will be closely watched by industry observers and other social enterprises navigating similar growth trajectories.
