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News Release: 2011-07-12

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Wage theft lawsuit seeks to recover $440K in back pay, interest for cheated workers

Dick Lee Pastry paid well below minimum wage, demanded long hours with no overtime, falsified payroll records, retaliated against workers

SAN FRANCISCO (July 12, 2011) -- City Attorney Dennis Herrera today sued Dick Lee Pastry, Inc. and its owners and operators for violating state and local laws intended to ensure minimum wages, overtime compensation, and lawful competition by failing to pay more than $440,000 in wages plus interest to seven of their employees. The litigation comes as the result of an investigation by San Francisco's Office of Labor Standards Enforcement under the direction of Division Manager Donna Levitt. Also named as defendants in the lawsuit are Peter Yu and Ada M. Chiu, who own the restaurant at 716 Jackson Street.

Herrera's lawsuit, which was filed in San Francisco Superior Court today, seeks to recover compensation for the cheated workers that would include all unlawfully withheld wages, plus ten-percent interest, plus penalties of $50 per day for the duration of their employer's wage violations. Herrera is additionally seeking penalties of $50 per day per employee as compensation to OLSE under San Francisco's Minimum Wage Ordinance; potentially severe civil penalties under California's Unfair Competition Law; and attorneys' fees and costs associated with the action.

"Robbing employees of wages to which they're entitled doesn't just hurt working families -- it also hurts honest businesses and their employees by corrupting a competitive marketplace," said Dennis Herrera. "Dick Lee Pastry stands out even among the most egregious perpetrators of wage theft in San Francisco. They paid wages well below the legal minimum, demanded long hours with no overtime, instructed workers to lie to labor investigators, and retaliated against those who sought to protect their rights. I hope today's lawsuit sends a strong message to other would-be wage cheats about the seriousness of our resolve to protect working men and women in San Francisco. I applaud the Office of Labor Standards Enforcement for their investigation of this case, and I'm grateful to the Chinese Progressive Association for their community outreach efforts."

"The law requires that restaurant workers be paid at least the minimum wage for every hour worked, but Dick Lee Pastry paid workers a monthly salary that amounted to less than half of the City's minimum wage rate. This is wage theft and it will not be tolerated in San Francisco," said Donna Levitt. "The Office of Labor Standards Enforcement is here to vigorously investigate and enforce our City's minimum wage law and create a level playing field for law abiding businesses. I commend City Attorney Dennis Herrera and his deputies for filing this lawsuit today and appreciate the work of the Chinese Progressive Association who brought this claim to our attention."

"Today's legal action sends a clear message: San Francisco will not tolerate employers who steal from their workers," said Shaw San Liu, lead organizer of the Chinese Progressive Association's Worker Organizing Center. "The wage theft crisis is crippling our local economy, not just in Chinatown but across San Francisco. We applaud the courage of the workers who first came forward to CPA, and all the workers who are now speaking out. If you are a worker and you think you may be getting cheated, or simply want to learn more about your rights, we welcome you to come to CPA for confidential information and assistance."

The seven wage theft victims described in the City Attorney's complaint worked at Dick Lee Pastry for periods ranging from more than a decade to less than a year. All worked six-days per week, with shifts spanning eleven to fourteen hours per day. Despite the considerable overtime the employers demanded of their workers, however, none received overtime or double-time compensation as required by law. The cheated employees received semi-monthly wages of approximately $550, averaging between $3.02 and $3.91 per hour. San Francisco's current minimum hourly wage is $9.92.

OLSE initiated its investigation on the basis of a complaint referred from the Chinese Progressive Association in late 2009, after which City investigators notified the defendants in writing that it was investigating possible violations of San Francisco's Minimum Wage Ordinance. Yu and Chiu took immediate steps to obstruct the investigation, according to the complaint, retaliating against employees who were cooperating with the OLSE by dramatically reducing work hours to below full time, and immediately firing one employee who also worked as a live-in maid to the defendants. Yu and Chiu had previously fired a live-in maid and restaurant worker after she traveled to China to be with her sick mother.

The City's complaint against Dick Lee Pastry additionally details a pattern of deceptive payroll practices, in which Yu and Chiu provided employees with copies of three-hour work schedules with instructions to inform government inspectors that the document accurately represented the time they had worked. Defendants paid only three hours per day by check at San Francisco's minimum wage, with remaining amounts paid in cash. Apart from paying their employees well below the minimum wage and refusing to pay overtime or double time when required, Yu and Chiu paid employees in a manner that deliberately concealed the true number of hours employees worked, according to the City Attorney's complaint.

In November 2003, San Francisco voters passed the Minimum Wage Ordinance (S.F. Admin. Code, Ch. 12R) to provide for annual rate adjustments based on the previous year's Consumer Price Index for urban wage earners in the San Francisco-Oakland-San Jose metropolitan area. Historical MWO Wage Rates have been: $8.82 per hour in 2006; $9.14 per hour 2007; $9.36 per hour 2008; $9.79 per hour 2009; $9.79 per hour 2010; and $9.92 per hour in 2011. For more information about San Francisco's Minimum Wage Ordinance, members of the public may call the City's multi-lingual hotline at (415) 554-6292, or email MWO@sfgov.org. Wage theft victims may also seek confidential assistance from the following organizations: Chinese Progressive Association at (415) 391-6986; Filipino Community Center at (415) 333-6267; La Raza Centro Legal at (415) 575-3500; and Pride At Work at (415) 410-7462.

The case is: City and County of San Francisco et al. v. Dick Lee Pastry, Inc. et al., San Francisco Superior Court, filed July 12, 2011.

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Last updated: 7/12/2011 9:35:23 AM