$1 million settlement in Cheesecake Factory wage theft claims

The Cheesecake Factory, as well as Magic Touch Commercial Cleaning and Allied National Services, the two companies that provided janitorial services for the Cheesecake Factory, have finally settled a wage theft case in California that involved failure to pay some 589 janitors working in their San Diego and Orange County restaurants for overtime and not allowing them meal or rest breaks.

The claim, which was filed back in 2018 by the California Labor Commissioner’s Office, alleged that janitors on the overnight shifts were required to work extra hours every shift and accumulated as much as 10 hours of overtime per week between 2014 and 2017 for which they weren’t compensated.  All three entities, including the Cheesecake Factory, were found liable under California Labor Code section 2810.3 and cited for unpaid minimum wages, unpaid overtime, liquidated damages and waiting time penalties, as well as meal and rest period premiums.

Appeals by The Cheesecake Factory were among the reasons for the delays in the case.  At least some of the janitorial workers have come forward and have been paid from the $1 million settlement. The California Labor Commissioner hopes that others who qualify for a payout from the settlement will come forward and contact their office. In the meantime, money is being held in a trust fund for them.

The broader context of this case

The suit and the settlement were possible because of California Labor Code section 2810.3, a law enacted in 2015 (SB 588), that allows not just contracted companies that hire workers like janitors to be held liable for workplace violations, but also the larger companies that contract out these services. California strengthened its laws to remove loopholes that allowed larger businesses to subcontract services and avoid responsibility for not paying wages.

It is surprisingly easy for small businesses to declare bankruptcy, go out of business or change their name and escape responsibility. By being able to hold large companies liable for the misdeeds of the companies with which they contract, there’s a better chance of securing payment – and of these companies being more careful in choosing their contractors. The Cheesecake Factory is paying three-quarters of the settlement, while the other parties are paying the remainder.

Labor Commissioner Lilia Garcia-Brower says, “We have very powerful laws in California…[but they’re] not utilized as often as we’d like them to be.” She said the testimony of wronged workers is crucial to getting justice.

It’s important for all workers throughout California to know their rights and to be able to assert them. The latter can be difficult, which is why having experienced legal counsel in wage and hour laws can make all the difference.