CA Labor Commission: Cheesecake Factory Liable for Unpaid Wages; Damages to 559 Janitors

Liz Carey

San Diego, CA (WorkersCompensation.com) – Cheesecake Factory restaurants in Southern California may be liable for any wages due to more than 550 janitors who cleaned their restaurants. The restaurant chain could face workers’ compensation violations as well.

The California Labor Commission announced this week that Cheesecake Factory restaurants in Brea, Escondido, Huntington Beach, Irvine, Mission Viejo, Newport Beach and San Diego were jointly liable for millions in unpaid minimum wage and overtime, meal and rest period violations, damages, waiting-time penalties and failure to provide itemized pay stubs.

According to court records, the restaurant chain contracted with a national cleaning firm, Americlean Janitorial Services Corp., a Minneapolis firm operating as Allied National Services, Inc., to do its cleaning. Americlean subcontracted out the services to workers who were managed by San Diego-based Magic Touch Commercial Cleaning.

Labor Commissioner Julie Su said Magic Touch’s owner, Zulma Villegas, must pay the janitors $4.57 million because of the violations.

But if the state cannot collect from Villegas, under CA law, it can turn to the restaurant chain and the national cleaning firm for the unpaid wages and damages.

In 2015, California passed Assembly Bill 1897, which holds employers liable for workplace violations even when they contract out the labor. The companies may be responsible for the wages, damages and penalties imposed by the court on the subcontractor, and may face workers’ compensation violations.

Erika Monterozza, spokesperson for the Labor Commissioner’s Office, said in an interview with WorkersCompensation.com that the Cheesecake Factory and Allied would only be liable for $4.2 million in unpaid wages, because some of the violations took place prior to Assembly Bill 1897 going into effect on Jan. 1, 2015.

Villegas, Monterozza said, must pay the workers $3.92 million in wages and penalties, as well as pay $632,750 in civil penalties to the state.

“If she doesn’t appeal in 15 days, the amount comes due,” Monterozza said. “Sometimes the Labor Commissioner’s office will work out payment plans, but the full amount is due in 15 days if she does not appeal.”

The investigation — started by reports from two labor nonprofits; Maintenance Cooperation Trust Fund, out of Los Angeles; and the Employee Rights Center in San Diego — found that the janitors would start their shifts at midnight and would work through the night, without proper meal or rest breaks, until a Cheesecake Factory manager reviewed their work with them eight hours later. The walkthrough, the Commissioner said in a statement, often led to each janitor working up to 10 additional hours each week that went unpaid as overtime.

“This case illustrates common wage theft practices in the janitorial industry, where businesses have contracted and subcontracted to avoid responsibility for ensuring workers are paid what they are owed,” Su said in a statement. “Client businesses can no longer shield themselves from liability for wage theft through multiple layers of contracts. Our enforcement benefits not only the workers who deserve to be paid but also legitimate janitorial businesses that are underbid by wage thieves.”

Sidney Greathouse, Vice President, Legal Services at The Cheesecake Factory, said in a statement, “We take matters of this nature very seriously. We are continuing to review the allegations and will respond to the wage citation within the time provided.”

Allied did not immediately respond to requests for comment by press time. Magic Touch Commercial Cleaning changed its name during the investigation to Z’s Quality Commercial Cleaning, for which a listing could not be found.