Court Approves Multi-Million Dollar Settlement for Low-Wage Workers Against Former Restaurant Owner

Court Approves Multi-Million Dollar Settlement for Low-Wage Workers Against Former Restaurant Owner

PRESS RELEASE

Court Approves Multi-Million Dollar Settlement for Low-Wage Workers Against Former Restaurant Owner

May 26, 2021, Orange County, California – After a saga lasting more than 10 years, today the Superior Court announced its final approval of a $2.2 million settlement for hundreds of former employees of Koji’s Japan, Inc., a southern California restaurant chain that shuttered many years ago. The workers recover these millions directly from the former restaurants’ individual owner, Arthur J. Parent, Jr., who failed in his many attempts to avoid responsibility for his ex-employees’ unpaid wages, through personal and corporate bankruptcy filings and dozens of contested proceedings in the case.

In Turman v. Koji’s Japan, Inc., and Arthur J. Parent, Jr., Case No. 30-2010-00425532-CU-OE-CXC, filed in November 2010, the plaintiffs asserted that Koji’s and Parent did not provide meal and rest periods, or pay premiums for missing them, as required by California law. Koji’s also had a flawed timekeeping system that resulted in off-the-clock work, the suit alleged. The largely minimum wage workers testified that they would have to rush to eat for a few moments between serving customers and could spend hours on their feet without any relief.

Instead of accepting responsibility, Parent first fired the original named plaintiff, Amanda Quiles, before Christmas in 2010. He then closed the restaurants all together in 2012, hoping that would end his troubles. It did not.

The focus of the litigation became whether the plaintiffs could hold Parent personally liable – since, by then, he had emptied the resources of Koji’s. In 2015, after a lengthy trial on Parent’s liability as an alter ego or joint employer with Koji’s, the court found that Parent “dominated or controlled” Koji’s, making him an employer under the federal wage law, the Fair Labor Standards Act (FLSA). However, the court found Parent not liable under California law – the basis of the vast majority of the class members’ claims.

In 2017, the Court of Appeal reversed the trial court on multiple grounds in a precedential, published opinion, holding that law-breaking owners are potentially liable personally for their wage violations. “[T]he trial court expressed concern that if Parent were held liable by virtue of his control as sole shareholder and president of Koji’s, then all owners of all closely held corporations would suffer the same fate,” the Court of Appeal observed. “But Parent’s status as sole shareholder and president of Koji’s cannot insulate him, or any other sole owner of a closely held corporation, from liability as a joint employer if his actions meet any one of the three definitions set forth in Martinez [v. Combs (2010) 49 Cal.4th 35],” the Court held, giving hope to millions of low-wage California workers. After Turman, an individual owner, officer, or director is potentially liable for California Labor Code violations (among other reasons) if he allows (“suffers or permits”) the workers to work for substandard wages, or if he exercises control over the wages, hours, and working conditions.

Meanwhile, the original named plaintiff, Quiles, won a jury verdict of $383,500 – with just $3,000 in lost wages – because of Parent’s retaliation against her. Public records show that he wound up personally owing Quiles nearly $2 million, including her judgment and fees and costs, plus collections fees and interest, based upon this wrongful termination and his long refusal to pay for the verdict against him.

Today’s announcement by the Superior Court acknowledged the importance of the class settlement, stating, “The attorneys’ efforts on behalf of the Class, under extremely difficult circumstances after the Defendant restaurants were closed and Defendants filed bankruptcy, yielded an exceptional result for low-wage workers, over Defendants’ vigorous opposition. The Class is recovering $2.2 million from an individual business owner, Defendant Parent, establishing an important precedent allowing workers to recover unpaid wages from some corporate owners, Turman, et al. v. Superior 17 Court (2017) 17 Cal.App.5th 969. The Court also recognized the named plaintiffs’ “extraordinary time and effort in pursuing this litigation over the course of many years.”

The settlement will yield thousands of dollars of recovery, on average, per class member – which, according to an analysis by the plaintiffs’ expert, equates to an average net payment of an additional 2+ hours of the average base wage rate for every shift worked more than five hours.

“I have never had a harder-fought case,” said plaintiffs’ veteran attorney Bryan Schwartz, of Bryan Schwartz Law, P.C., pointing out that the docket has 2,756 entries as of today’s date. “But, I’ve also never had a more important one,” he added, explaining: “This result means that those who violate our wage and employment laws in California face real consequences if they don’t own up.”

“I am looking forward to all of us moving on from Artie Parent,” said lead plaintiff Heather Turman. “It was a lengthy process, but it is great to see this bad actor have to pay, in the end.”

Bryan Schwartz Law, P.C. is located at 180 Grand Avenue, Suite 1380, Oakland, CA 94612. The telephone number is (510) 444-9300.