Restaurant labor violations draw notice
Criminal probes into wage theft, other issues ‘all too common’ in Bay Area
The growing scrutiny of restaurants proliferating across the Bay Area is not limited to what’s on the menu: As the Bay Area continues to emerge as a culinary hot spot, some say restaurants are also becoming a hot spot for labor law violations.
“There are egregious wage violations in the restaurant industry in the Bay Area,” said Michael Eastwood, assistant district director at the San Jose area office of the federal Department of Labor. “It’s all too common.”
“When you don’t knowthe rules or labor laws here in the United States, that’s precisely when (businesses) can most exploit it. You come here with the need towork, and that’s when you get abused, because you know nothing about anything.” — Sergio Mejia, who worked at a restaurant for roughly five years after arriving from Guatemala in 2007
The problem has grown large enough that in recent years the Department of Labor and the state Department of Industrial Relations have collaborated with local authorities throughout California and opened numerous criminal investigations.
Many violations center on issues that typically would be expected to surface in the fast-paced restaurant sector: wage theft from not paying overtime and the failure to provide mandated meal breaks. From 2011 to 2015, the Northern California restaurant sector produced 234 cases of wage and hour violations that resulted in $3.2 million back wages owed to 1,618 employees, according to data from the San Francisco District Office of the Wage and Hour Division.
But authorities are also reporting wage theft cases that have a human-trafficking element, where employees are either forced to live on-site, or reside on property owned by their employers and forced to pay a majority of their salaries back as rent.
In some high-profile cases, workers are fighting back, taking restaurants to court.
“You see in San Francisco and Alameda counties on a daily basis between five and 10 class actions filed per day, and across the state you can multiply that tenfold,” said Cathy Arias, chairwoman of law firm Burnham Brown, who focuses on representing restaurants and retailers.
Not all of those are lawsuits against restaurants and retail, but wage violations are often concentrated in the hospitality industry, which relies on hourly employees almost exclusively.
Calavera, the high-end Mexican restaurant that made a splash when it opened in Oakland’s Uptown district last year, recently made headlines when three of its former employees sued its parent company, 15 Main, LLC, alleging that the restaurant failed to pay minimum wages and overtime, provide meal or rest breaks, indemnify employees for expenditures, and pay earned wages upon termination.
While Calavera partner Chris Pastena wouldn’t comment on specifics of the ongoing case, he said the restaurant keeps good records that “will speak for themselves.”
“We’ve worked hard to make sure we abide by all the laws and all the employment laws that have come down in the last few years,” Pastena said.
A jury found in 2014 that Marin County restaurant Seafood Peddler willfully violated the Fair Labor Standards Act. Sergio Mejia, who worked at the restaurant for roughly five years after arriving from Guatemala in 2007, said via a translator that he didn’t get meal breaks and never received overtime pay for the typical 13-hour shifts he worked at the restaurant.
“When you don’t know the rules or labor laws here in the United States, that’s precisely when (businesses) can most exploit it,” Mejia said. “You come here with the need to work, and that’s when you get abused, because you know nothing about anything.”
The court found that Seafood Peddler illegally retaliated against Mejia and other employees by firing them based on their suspicion that the employees had talked to the Labor Department’s investigators. Seafood Peddler did not respond to a request for comment.
Not far away in San Francisco, celebrity chef Michael Chiarello faces two lawsuits from former employees at his high-profile restaurant Coqueta. The allegations are against Chiarello and his management for a failure to pay the employees their due wages and for sexual harassment; Chiarello’s spokesman, Terry Fahn, has called the allegations “unfounded.”
Restaurants and retailers do have to be more vigilant than ever when it comes to labor policies. In recent years, policies have gone into effect locally and statewide that increased the minimum wage, ensure parental and family leave, and regulate scheduling for hourly employees.
In addition, the fastpaced, paperwork-free nature of the restaurant business also contributes to the litigation surrounding wages and hours, experts say.
Because the burden of proof is typically on the employer in a labor law violation case, and restaurants are not “paperwork-oriented environments,” they are often more susceptible than other businesses to wage theft cases, said Gwyneth Borden, executive director of the Golden Gate Restaurant Association, a lobby and resource group for Bay Area restaurants.
However, lawyers who file lawsuits on behalf of restaurant workers say there are plenty of cases that involve restaurants consciously taking steps to avoid paying workers what the law requires, including manipulating time cards to avoid paying overtime wages.
In Contra Costa County, District Attorney Mark Peterson has made wage theft investigations a priority. Over the past two years, his office has hired two forensic accountants to review documents and help investigate possible labor law violations.
Contra Costa County DA senior inspector Tim Weaver confirmed that his agency has criminal investigations into possible restaurant labor law violations.
“Our main goal is to get compensation for the victims,” Weaver said. “In many cases, these people don’t have any ability to sue; it would be very difficult for them to organize.”
There are some formal efforts gaining traction in the Bay Area that advocate for workers’ rights.
The Bay Area chapter of restaurant worker advocacy group Restaurant Opportunities Centers United has seen an uptick in workers seeking help for wage theft, said the chapter’s director, Evelyn Rangel-Medina.
Attorney Tamura-Sato said that while there are protections for workers, more needs to be done to assure them about their rights in the workplace.
“My impression is that people in the Bay Area are so conscious about where our food comes from and how it’s made ... but I think people would also want to know that people are being paid fairly and what the labor conditions are at the places where they’re eating,” Tamura-Sato said. “We share so much about cheap eats and bargain bites, and we need to think about the fact that those come at a cost.”