DJO LAW BLOG : Legal Newsletter

It is easy to say, as Café Gratitude owners Matthew and Terces Engelhart did, that a civil lawsuit is “legalized extortion” when you are being sued. Café Gratitude, a popular California eatery with a half dozen or so locations in the state, is being sued for various wage and hour violations, and claims to be closing its doors permanently due to these “aggressive” lawsuits.

At issue are Café Gratitude’s compliance with laws governing workers’ meal and rest breaks, overtime pay, and its tip-pooling policy. In addition, there are allegations that Café Gratitude impermissibly required or pressured employees to attend, and pay for, Landmark Forum self-transformation seminars.

As an employment law attorney who has represented and advised both employers and employees, I see things differently than Café Gratitude’s owners.

First, it should be a “no-brainer” not to give even the slightest appearance of pressuring employees to adhere to your particular spiritual philosophy, as Café Gratitude owners apparently did. Among other things, this could lead to claims of discrimination based on religion. Furthermore, it is illegal, with very few exceptions, to require employees to pay out of pocket for anything required by the employer. (See California Labor Code section 2802.) Café Gratitude’s scheme of paying half of the Landmark seminar tuition and having the employee pay the other half should have set off alarm bells to Café Gratitude’s legal advisor, if it had one.

Second, the topic of meal and rest periods is one I have addressed previously and at length. Go to the Legal Information page at to read my article Basics of California Meal and Rest Period Law. As I point out in that article, the California Supreme Court is considering the appeal in Brinker v. Superior Court, which will clarify what, if any, active steps an employer must take to “provide” meal and rest periods. In fact, the Court heard oral arguments in this case just a few weeks ago on November 8, 2011. In the meanwhile, however, employers would do well to take active, documented steps to ensure that all hourly employees receive proper breaks; this will limit their exposure to wage and hour lawsuits. Employers and employees alike should be grateful when the California Supreme Court finally issues its decision in Brinker.

The upshot here is that with a little more attention to the law, and less zeal about creating a “community,” Café Gratitude may have been able to avoid some of the litigation about which it is currently complaining.

Stay tuned for additional posts regarding tip-pooling, another issue that can plague restaurateurs who implement policies without an understanding of - or in Cafe Gratitude’s case perhaps, caring about - the law.  


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