July 23 For-profit college Universal Technical
Institute Inc said it is being investigated by the U.S.
Department of Justice after a former employee alleged the
company had violated compensation laws.
The company said a former employee alleged that Universal
Technical Institute's compensation of its enrollment counselors
violated the incentive compensation ban of the Higher Education
A federal law prohibits colleges from compensating employees
based on the number of students they enroll.
Universal Technical Institute is also under investigation by
the Department of Labor after the same employee alleged his
employment was improperly terminated.
The company said it believes that the employment of the
complainant was terminated based on failure of performance and
not for any illegal or retaliatory reason, and that it intends
to vigorously defend itself against the allegations.
Universal Technical Institute shares, which have lost more
than half their value in the last one year, were down 4 percent
at $12.35 in early morning trade on the New York Stock Exchange.