Court orders Subway franchise owners to pay workers nearly $1M - and to sell or close their stores

Associated Press
Updated Fri, September 29, 2023 

SAN FRANCISCO (AP) — A federal court ordered the owners of 14 Subway locations north of San Francisco to pay employees nearly $1 million in damages and back pay — and also to sell or shut their businesses, with any sale proceeds going to the Department of Labor.

Federal investigators said franchise owners John and Jessica Meza directed children as young as 14 to operate dangerous machinery, assigned minors work hours that violated federal law, and failed to pay their employees regularly, including by issuing hundreds of bad checks and illegally keeping tips left by customers.

The Labor Department also charged that the Mezas coerced employees in an attempt to prevent them from cooperating with its investigation and that an associate, Hamza Ayesh, played a role in those efforts, including threatening an employee who complained about receiving a bad check.

The Mezas did not admit to threatening or coercing employees, according to Arkady Itkin, their lawyer, who added that they did admit to issuing bad checks and violating some labor standards. He added that Ayesh did not admit to threatening an employee, but agreed to settle what Itkin called a “he said, she said situation" to put it to rest.

Itkin added that the Mezas are people of modest means who are very unlikely to be able to pay the sum agreed to in the court order. “The settlement agreement might make it look like they're just going to cough up a million dollars,” he said. “It's not going to happen.”

Unpaid 15-year-old Subway workers were threatened when they asked for wages, feds say

Julia Marnin
Fri, September 29, 2023 

Szymon via Unsplash

When two 15-year-old Subway workers in California asked for their unpaid wages, their supervisor threatened to file a police report against them and “push for the max sentence,” court documents say.

They were threatened for simply exercising their rights as a Department of Labor Investigation was underway, according to the agency and a complaint filed in federal court.

The restaurant’s owners and operators, who run 14 Bay Area Subway restaurants, didn’t properly pay their employees, including the two teens, stole workers’ tips, violated child labor laws and tried convincing workers to not cooperate with a federal investigation, according to the U.S. Department of Labor.

“Hundreds of bad checks” were issued to the employees — that bounced, officials said.

As a result, the Department of Labor sued the franchisees, John Michael Meza and his wife, Jessica L. Meza, who run the 14 Subway restaurants with franchisor and operator Doctor’s Associates LLC. The restaurants are located in Antioch, Clayton, Concord, Cotati, Napa, Petaluma, San Pablo, Santa Rosa, Vallejo and Windsor, according to officials.

Now, a federal judge has ordered the Subway operators to pay nearly $1 million in back wages and damages to 184 employees after repeatedly violating the Fair Labor Standards Act, the Department of Labor announced in a Sept. 29 news release.

In addition to this, they must also “sell or shut down their businesses by Nov. 27,” according to officials who described the court order as a “rare action.”

“Thanks to some very brave young people who stood up to their employers’ exploitation and attempts to intimidate them, the Department of Labor and a federal court are holding these business owners accountable,” the agency’s Wage and Hour Regional Administrator Ruben Rosalez in San Francisco said in a statement.

Attorney Arkady Itkin told McClatchy News in a statement on Sept. 29 that the court’s order was the result of the parties reaching an agreement.

“Any settlement payments will be subject to my client’s ability to pay which appears to be quite modest at this time,” Itkin said.

In addition to threatening teen employees, the Subway franchisees had 14- and 15-year-olds using dangerous equipment, which is illegal under federal law, officials said.

Young workers were also assigned shifts that resulted in them working “hours not permitted by law,” the release said.

The 184 Subway employees are owed $475,000 in minimum wage, overtime and tips they never received and will be paid that same amount in liquidated damages, according to officials.

The Mezas must pay $150,000 in penalties and the couple, along with their associate, must pay $12,000 in punitive damages “for their retaliatory conduct,” officials said.

“The contempt employers showed for their workers’ safety, dignity and rights cost them the businesses they hoped to build and brought significant financial consequences,” Marc Pilotin, the regional solicitor of labor in San Francisco, said in a statement.