Gordo Taqueria, which owns five restaurants in San Francisco, Berkeley and Albany, has agreed to pay a total of $690,000 to settle a class action lawsuit brought by current and former employees who allege the restaurant’s owners engaged in wage theft and other labor-related improprieties.
The settlement, which received preliminary approval from Alameda Superior Court judge Brad Seligman in December, is scheduled to receive final approval on April 2. As part of the settlement, Gordo neither admits wrongdoing nor accepts the facts presented in the plaintiff’s complaint.
The suit includes 240 current and former Gordo employees and was brought by former dishwasher and prep cook Jose Martinez, who worked at the restaurant’s College Avenue location in Berkeley from 2013 to 2015.
Martinez alleged in the complaint, filed in December 2016, that the restaurant did not pay him and other workers legally required overtime even when they worked 10–12 hour days, that employees did not receive additional legally required rest or meal breaks when working more than 10 hours a day, that tips were distributed only once or a few times a year to employees based on hours worked and rate of pay, rather than as legally required, in addition to other allegations.
According to industry practice and state law, tips are supposed to be distributed at the end of every work day if in cash, according to Carole Vigne, senior staff attorney at San Francisco-based Legal Aid At Work, who is representing Martinez and the other present or former Gordo workers in this case. Additionally, California’s labor code specifically states that tips are the sole property of employees and that credit card tips are to be distributed at the end of every pay period.
The restaurant, according to the complaint, also allegedly did not pay employees their full wages or back pay once they left employment with Gordo and did not keep accurate payroll records to calculate employee hours and wages. During the legal discovery process, according to Vigne, it was found that Gordo did not use a time clock until 2015, but relied on manual record keeping. Furthermore, those pre-2015 paper records were not kept by the restaurant, which would be a violation of state record-keeping requirements. However, according to Vigne, the state has said it will not pursue this case further.
Although Gordo owners, Dick Yamagami and Manuel Hernandez, have settled this case, they dispute all the allegations in the complaint, according to Harry DeCourcy, an attorney in Walnut Creek with the Kansas City-based law firm Littler Mendelson, who is representing the owners.
“The position of Gordo is that they haven’t done anything unlawful. All the factual allegations in the complaint are disputed,” according to DeCourcy, who refused to make any specific comments related to the complaint or claims made by the plaintiff’s attorney. “We got into early mediation and negotiated an amicable settlement over a year ago. Our client is eager to move on.”
Wage theft, according to the UCLA Labor Center is an umbrella term that refers to any situation where employees do not receive the wages they are legally owed by an employer, such as when workers are not paid the minimum wage, do not receive overtime for working more than eight hours a day, do not get customer tips when they are supposed to, are forced to work off the clock, or do not receive sick leave or worker’s compensation insurance.
Martinez waited to file this case until he no longer worked at Gordo due to fear of retaliation, according Vigne. “The issue with tips was the main issue that he initially presented with,” she said, describing Martinez’s allegations. “Gordo had a practice of collecting tips and holding on to them and distributing them to workers around the holidays, sort of like a holiday bonus. It was insinuated that they did it to retain employees. If you left before holidays, you wouldn’t get them. [They are] supposed to give tips at end of day.”
According to Vigne, the owners of Gordo claimed that the practice of once-a-year tips was inspired by worker preference. However, she said no worker that her firm spoke to wanted them distributed in such a manner. “None of the workers we spoke with actually liked that practice,” she said. “They would have benefited from a little extra money at the end of each pay period.”
The settlement should provide an average payout of $2000 to each member of the suit, according to Vigne. Up to 40 workers will receive more than $5,000 in the agreement and one will receive $13,000, she said. Martinez, as the one who stepped forward and was named in the suit, will receive up to an additional $10,000 for his service, depending on what is finally approved in court, according to the settlement.
“Generally a $2,000 average worker payout is really good,” Vigne said. “These are really low-wage workers, the average wage of each of these workers was $13 [an hour]. A payout of $2,000 is about a month’s pay. We hope it’ll make a difference in their lives.”
If the settlement receives final approval, employees that are part of the suit should receive checks by the end of April, as mandated in the settlement.
According to Vigne, because of the suit, Gordo is now in full compliance with state labor laws including payroll records, overtime and other regulations, which she cites as a major victory. “That was important to [Martinez] and important to us as an organization,” she said. “We feel Gordo has come into full compliance and we’re proud of that.”
DeCourcy insists, however, that the restaurant was never out of compliance in the way described in the complaint, although he would not comment on the restaurant’s record keeping or any changes the owners may have made in response to the suit. “We have in the past and currently fulfilled our legal obligations in regards to timekeeping,” he said.
A popular chain of Bay Area taquerias, Gordo Taqueria was founded in 1977 at 2252 Clement St. in the Richmond neighborhood of San Francisco by Yamagami and Hernandez before opening more locations in the city and expanding to the East Bay.
According to the California Department of Industrial Relations, Gordo has been subject to two other investigations in the past. One, filed Sept. 30, 2016, alleged Gordo did not provide adequate meal and rest breaks to employees. The case was settled with a $7,000 payment to the plaintiff, according to Lucas Brown, a spokesperson for the Department of Industrial Relations.
A previous department-led Bureau of Field Enforcement investigation of Gordo in 2011 did not lead to a citation and specific information on the investigation was not available by press time because the papers have been archived off-site, according to Brown.
The sudden closure in September of Gordo Taqueria at 2404 Telegraph Ave. near UC Berkeley’s campus was not connected to this case, according to the restaurant’s attorney, who said it was closed purely for “business reasons.” At the time, the Daily Cal reported that the surprise closure was due to competition and high rent, quoting the restaurant manager there.
Legal Aid At Work is working on other similar wage theft cases in the area, including a case against Burma Superstar, which received media attention when it was announced two years ago. That case, which is still winding its way through the courts, includes 100 employees who worked at its San Francisco and East Bay locations. The suit claims workers were not paid minimum wage, were denied overtime, breaks and sick leave.
Other wage theft cases that have been publicized include a case in December against the owner and operator of Grant Street Pub & Pizzeria in Concord, who was sentenced to two years probation and a $10,000 fine for not providing workers’ compensation insurance to employees.
In January, the owners of two Malaysian-Chinese restaurants, Mango Garden in Fremont and Mango Blaze in San Jose, were found guilty of paying their workers as little as $2 an hour to work 11 to 12 hour days, six days a week without overtime. Additionally, their tips were stolen, and injured workers were denied medical treatment. The owners were found guilty of wage theft and tax and insurance fraud. They received probation, community service and more than $1.7 million in assets were seized by the state to pay back employees and to pay fines.
Although the region is known as a global food mecca with consumers increasingly focused on the fresh and healthy sourcing of ingredients and the humane treatment of animals, the human workers who toil away in Bay Area kitchens often work in illegal and difficult conditions, according to Vigne.
“[We] appreciate the progress for sustainable foods and local farmers,” Vigne said. “But as worker advocates, it’s frustrating that there doesn’t seem to be the same level of concern for people prepping and cooking the food as there is for the food itself. It’s all interconnected, it’s all part of the bigger picture of food justice.”