Why Cheesecake Factory wage theft case in Orange County matters for California

By Jeanne Kuang | CalMatters

National restaurant chain The Cheesecake Factory and some of its contractors have paid $1 million to settle a major California wage theft case, in which state labor officials accused the companies of stiffing hundreds of janitors of overtime pay and breaks.

Janitors at eight Cheesecake Factory restaurants in Orange and San Diego counties were forced to work as many as 10 extra hours a week without being paid overtime, the state’s Labor Commissioner’s Office said in a 2018 citation.

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“When we were working long nights cleaning the kitchen and the dining room of the restaurant, we knew the employer and the restaurant owner were taking advantage of us,” Naxhili Perez, one of the former San Diego janitors, said in a press release.

The state’s Labor Commissioner’s Office planned to formally announce the settlement and hand out checks to former workers at an event in San Diego on Tuesday. The office is now hoping to get the attention of other ex-employees who may qualify for a payout for unpaid work they did between 2014 and 2017.

The agreement, reached last fall, marks a long-delayed resolution in one of the state’s most significant cases alleging wage theft. To persuade workers to cooperate with the state, the Labor Commissioner’s Office worked with the Maintenance Cooperation Trust Fund, a workers’ advocacy center that employs former janitors to investigate conditions in the industry.

Such partnerships are one of the state’s recent strategies to bring wage theft cases against large employers in the hopes of sending a message across their industries. The trust fund’s director at the time of the citations, Lilia García-Brower, is now the state’s labor commissioner.

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And the citations were one of the office’s first uses of a 2015 law that holds companies that hire janitorial contractors jointly responsible for workplace violations.

For years, workers’ advocates have complained that with the rise of contracting and subcontracting in the janitorial industry, it was easy for smaller employers to close up shop, declare bankruptcy or change names when accused of wage theft, while building owners or other companies that hired them escaped liability.

In the Cheesecake Factory case, the company contracted with the national Americlean Janitorial Services Corp. to clean its restaurants. Americlean in turn subcontracted the work in the eight southern California locations to a cleaning company called Magic Touch, according to the state.

Though Magic Touch directly hired the janitors, the state said in 2018 that Cheesecake Factory managers kept workers from going home at the end of their eight-hour, overnight shifts. The managers would inspect the restaurants and assign additional tasks to the janitors before they were allowed to leave, without paying overtime, the labor commissioner said. 

During the state’s investigation, Magic Touch changed its name, but the state said both businesses were liable for back pay. Owner Zulma Villegas filed for bankruptcy in 2021.

Villegas’ attorney Roxana Verano, reached by phone today, declined to comment on her client’s behalf. An attorney for Americlean did not immediately respond to a request for comment.

In the end, The Cheesecake Factory agreed to pay the bulk of the settlement — $750,000 — while the rest was split between Villegas and Americlean, according to the agreement.

As part of the settlement, none of the companies admitted fault. But both Villegas and Americlean will provide a written apology to workers. Villegas’ apology, included in the settlement, states she “did not fulfill my obligations under the law as an employer, some of which were out of my control,” while Americlean notes it “could have overseen Magic Touch better” and said it no longer provides cleaning services to the restaurant chain.

For the next two years, the restaurant chain has agreed to require any contractors bidding to provide janitorial services at its California restaurants to disclose whether the state has ever found them liable for wage theft. It will also require its current and future California contractors to provide their janitors information on labor laws in English and Spanish, and submit to audits if workers have future complaints, according to the settlement. But the agreement says the apology by Villegas and Americlean won’t be distributed at any Cheesecake Factory restaurants.

A spokesperson for The Cheesecake Factory did not immediately respond to written questions this afternoon.