Wounds Reopen for Restaurants’ Laid-Off Workers
Restaurateur Joseph K. Knight has opened a new eatery and an old wound, infuriating restaurant workers who still have not been paid tens of thousands of dollars in wages since two of his other restaurants went out of business.
As many as 100 waiters, cooks and other employees lost their jobs and several weeks pay with the closures of the Seafood Grill & Broiler restaurants in Northridge and Woodland Hills just before Christmas, 1993.
Although 20 workers won court judgments for a total of more than $47,000, the victory has proved hollow. Seafood Grill & Broiler Inc. apparently has no assets to satisfy the judgments and Knight, its president, is not personally liable for the firm’s debts.
Which was why Knight’s re-emergence in March as founder and chief executive of Favoritz--an upscale, Hollywood-themed restaurant in a Woodland Hills mall--is a particularly bitter pill for the workers.
“How could he do this? . . . It just shocked me that people can get away with that,” said Michael N. Bolken, 22, a waiter who has been unable to collect a judgment for $1,724.
“For him to just ditch all his employees . . . it’s like he almost didn’t take any regard [for] the fact that we’re people,” Bolken said.
“Pretty amazing, isn’t it?” said Tim Henry, who resigned as manager of the Woodland Hills Seafood Grill when it began having trouble making its payroll. “I understand that when a business fails, a business fails, but you have to take care of certain things, and the employees working for you is one of them.”
In an interview, Knight said he lost more than $300,000 on the Seafood Grills and has suffered “financial problems, just like everyone else.”
He also said he understands the workers’ feelings.
“I’d be pissed too. . . . I feel bad about the whole thing, but what are you going to do?”
For the embittered cooks, dishwashers, cashiers and servers, who had earned $4.25 to $10 per hour, being deprived of their pay just before Christmas seemed especially cruel.
Pedro M. Chavez, a cook who had worked more than 15 years for Knight, was owed about $3,000 for 359 hours of work, according to the complaint he filed with the state. The lost income and unemployment forced Chavez to file for bankruptcy.
Workers say the episode has been an eye-opening civics lesson: a demonstration that people can work and not be paid and then get little help from the legal system.
Although they succeeded in getting judgments, “sometimes you wind up with a piece of paper you can hang on your wall,” said Cecil Hill, a deputy state labor commissioner. “It breaks your heart . . . but it’s a fact of life.”
The workers were owed up to two months pay when Knight called them together just after Thanksgiving, 1993, to announce the closings. According to employees, Knight said their money would arrive in the mail within two weeks, and he offered to hire them when he opened his new restaurant.
But the money never arrived, and several workers said phone numbers they were given to report problems with their checks proved useless.
“I was . . . given a number to call if it [the paycheck] didn’t arrive on time, and the number is disconnected,” wrote Jill E. Small, a $5.25-an-hour cashier, in her complaint to the state. “There is no way to get ahold of anyone.”
Knight told The Times he had intended to pay the workers but was unable to resolve a dispute with business associates.
“We were in the midst of a settlement, and the bottom line is the settlement didn’t happen,” he said, refusing to give specifics.
In the past year, 20 of the workers’ complaints were upheld by the state Division of Labor Standards Enforcement. Together they had lost about $24,000, but got judgments totaling more than $47,000, including penalties and interest on back pay. Individual judgments ranged from about $1,100 to $5,300. Knight was served with notices of the proceedings, but neither he nor any other representative of the firm appeared.
The decisions were entered as judgments in Los Angeles Municipal Court, and are binding for 10 years.
Last year, the state received about 56,000 complaints for unpaid wages, including nearly 27,000 in Southern California.
In 1993, the agency managed to collect $4.3 million in wages and penalties, but officials said they did not have a figure on the total of unpaid judgments.
The agency takes no action to collect unless workers can identify bank accounts or other assets of the employer. In this case and many others, employees do not know if there are assets and cannot afford to hire lawyers and investigators to find out.
“We crank these things through the system and get the judgments, but we lack the resources” to follow up, said Gus Carras, assistant chief of the labor standards division.
But in this case, Carras added, “even if I had a dozen investigators . . . I don’t know what they’d come back with if it’s a defunct corporation.”
Public relations literature on the Favoritz opening in the Promenade mall in Woodland Hills speaks only of Knight’s past successes. During the 1970s, he was co-founder of the Seafood Broiler chain, which grew to 29 restaurants before the units were acquired by General Mills in 1988 and converted to Red Lobsters. Knight separately operated the Northridge and Woodland Hills restaurants under the slightly different name Seafood Grill & Broiler.
Favoritz press releases credit Knight with developing the concept of the restaurant and identify him as founder and chief executive. But in an interview, Knight described himself as a hired hand, saying he will have equity only if the new company is successful.
Of the Seafood Grill failures, Knight said the restaurant world is fraught with risks, calling it “the No. 1 failing business there is.”
“I had to get a job, like they [the former employees] had to get a job,” Knight said. “It’s not fun for anybody what a lot of Californians have had to go through in adjusting their lifestyle.”
But some workers said they found it particularly galling that Knight never tried to explain.
“If he had simply called me and said, ‘I’m really, truly broke,’ ” explained Lyn Harris, a waitress with a judgment for $1,084.39. “If he had even been apologetic or nice about it . . . but he was such a jerk.”
