Arkansas entrepreneur tells U.S. House panel that regulations threaten survival of company
Posted: February 17, 2017 at 1:57 a.m.
Updated: February 17, 2017 at 9:02 a.m.
WASHINGTON -- An Arkansas woman who built a consignment sale empire told congressmen Thursday that federal regulations threaten the survival of her company.
Rhea Lana Riner told members of the House Committee on Education and the Workforce that she's been locked in a legal battle with the U.S. Department of Labor since 2013.
"If we lose, Rhea Lana's will no longer be able to provide its valuable service to families in need," she said.
Thursday's hearing focused on "Federal Wage and Hour Policies in the Twenty-First Century Economy." The entrepreneur from Faulkner County was the first of four people who addressed the subcommittee on workforce protections.
Riner started her children's clothing consignment company in 1997, holding the first sale in her Conway living room. A few friends gathered, buying and selling items. Since then, her business has mushroomed, with 80 franchises that operate in 23 states.
Many of the mothers who buy or sell gently used kids apparel also volunteered their time and helped run the consignment sales. In exchange, they're allowed to shop before the sale opens to the general public.
But in 2013, the Department of Labor said that Rhea Lana's Inc. was in violation of the Fair Labor Standards Act because she was using volunteer labor.
Since then, the government agency and Riner have been fighting each other in federal court.
If Rhea Lana's loses, it faces penalties as high as $3.6 million, she said.
Riner portrayed the battle as a struggle between big government and small business, between hardworking moms and oppressive bureaucrats.
"We're continuing to fight for a mother's right to use her personal time as she sees fit to help her family," she said.
But the yearslong battle has been "very disheartening and discouraging," she said.
Republican committee members expressed sympathy for Riner's plight.
U.S. Rep. Francis Rooney of Florida called it a "heart-moving story of bureaucratic abuse."
Committee Chairman Virginia Foxx of North Carolina was also supportive.
"Bless you for exercising your civic responsibility in doing what you had done," she told Riner. "Let's hope we can see some changes so that the kind of small-business people like you will not be harassed by a bureaucrat with too much time on their hands."
U.S. Rep. French Hill, a Republican from Little Rock, doesn't serve on the subcommittee, but he stopped by the gathering to greet his constituent.
"I'm inspired by entrepreneurs. I'm inspired by the American ingenuity to see a challenge or see a problem and solve it ... through our free market system," he said. "I believe that Rhea Lana is an interesting innovation that's been caught up in the red tape of the Fair Labor Standards Act and that it was never intended to prohibit or inhibit this kind of innovation."
Hill and U.S. Sen. John Boozman introduced legislation this month called the Children's Consignment Event Recognition Act, legislation that would exempt volunteers at Rhea Lana's from the Fair Labor Standards Act. (U.S. Sen. Tom Cotton, a Republican from Dardanelle, is a co-sponsor.)
In an interview Thursday, Boozman said he also believes in Riner's cause.
"That industry has really come up with a vehicle that allows them to help lots of people," he said. "Being able to have the ability to buy clothes at a discounted price is just such a benefit for so many people. It's a great model."
Business on 02/17/2017