RETAIL OPERATIONS NEED TO UNDERSTAND THE CLOSING LAW TO AVOID STIFF FINES

Puerto Rico’s ‘Closing law’ requires retail commercial establishments to remain closed during certain hours and days. In the case of Sundays,  an establishment may only open for business from 11:00 a.m. to 5:00 p.m. There are exceptions depending on the type of store involved, the nature of the goods sold and the number of employees.

Besides civil and criminal penalties for requiring employees to work on Sundays, a commercial establishment risks severe penalties for selling merchandise outside the allowed hours of operation.   The Department of Justice of Puerto Rico investigates and files administrative complaints against commercial establishments that fail to abide by the opening/closing schedule. 

The charges are filed before the Department of Consumer Affairs (DACO) which ultimately decides the applicable fines. The fines can later be appealed in a court of law.

Penalties are stiff- up to for $50,000 for each violation. Here are some real-life examples (some of which were later revoked):

• ELA v. Frigorifico, 2001 JTS 125: A supermarket  operation received a      $50,000.00 fine.
• Supermercado Selectos de Venus Gardens: A supermarket fined $15,000 by DACO.
• Supermercado Jardines de Caparra, 2002 JTS 103:  DACO issued a $10,000 fine to the merchant.
• Servicentro v Justicia,  PR Court of Appeals, KPE01-0823 (907): A gas station franchisee was facing  over $50,000 in fines.
• DACO v. CM Cash and Carry,2002 TCA 1574: Supermarket  sold a pack of lightbulbs to an undercover agent from the Justice Department and later was fined $5,000. When IT refused to pay, DACO obtained a court order  against the owner for criminal contempt.
• E.L.A. v. Diaz Arocho, 2000 TCA 839: In 1999 a business was fined $20,000 for violations that had occurred in 1994.
• ELA v. Farmacia La Nueva Modelo De Bayamón, 2000 TCA 1662: A pharmacy was fined $10,500 for selling to  an undercover agent three items (on Sundays before 11:00 a.m.)  totaling $6.47.
• ELA v. Fairview Service Station, Inc., 2001 TCA 486: A circle K franchisee was fined 9,500 for selling merchandize to an undercover investigator totaling .94 cents.
• ELA v. Royal Motors Corp,  98 TCA 343: Car dealer fined  $5,000 for opening on a holiday.
• ELA v. Caguas Expressway Motors, 2000 TCA 1582: Car dealership fined $10,000 for opening before 11:00 a.m. on Sundays.

The biggest danger I see for commercial establishments is that the Justice Department takes a long time to complete the complaint process.  It may gather evidence in the course of several years and then simultaneously file a dozen charges which could ultimately cripple a small business. The case also moves at a slow pace in  DACO; often taking more than a year to adjudicate a complaint.