Labor Commissioner Reaches Settlement to Secure $190,000 in Back Pay for Rosemead Restaurant Workers – The Corporate Shell Game

By June 8, 2016HR, Public Blogs

California Labor Commissioner Julie A. Su reached a $190,000 settlement on behalf of three workers who were victims of wage theft while employed at
a Rosemead restaurant, Nem Nuong Ninh Hoa. The settlement comes after the owners faced a lawsuit for fraudulently transferring the restaurant’s ownership to avoid paying the workers their back pay.

The case began after one of the workers filed a wage claim in May 2012. That September, siblings Mai Ngoc Lam, Thanh Di Lam and Ivey H. Lam began to transfer the restaurant’s ownership amongst themselves in an effort to escape liability for the wage theft.

The three employees, who worked as kitchen staff, regularly worked 12-hour shifts, six days per week with no overtime, meal periods, or rest breaks. They were paid $875 to $900 twice per month, with no pay stubs detailing their hours or lawful deductions. Each of the workers filed wage claims in May 2012 and January 2013, and won judgments in September 2013 ordering the owners to pay wages owed as well as liquidated damages
and penalties.

The Labor Commissioner’s Office teamed up with the Wage Justice Center to file a lawsuit in Los Angeles Superior Court in June 2015 against the three owners and their corporations to enforce payment of the August 2013 orders. The Wage Justice Center is a non-profit legal services organization that specializes in unraveling corporate schemes by employers, and holding them accountable for wage theft.

As a result of the lawsuit settlement reached, the owners this month delivered a cashier’s check for $150,000 to the Labor Commissioner’s Office to pay the three workers’ back wages. The other $40,000 owed will be paid in six installments beginning August 1.

The sibling employers transferred the ownership and changed the name of the restaurant successively from Nem Nuong Ninh Hoa Restaurant, Inc., to Nem Ba Ty Ninh Hoa Inc. in September 2012, to Summer Rolls, Inc. in January 2014. During this period, the restaurant continued to operate at the same location at 9016 Mission Drive in Rosemead. The Wage Justice Center’s investigation also concluded that all three corporations served the same cuisine, using the same equipment and substantially the same kitchen staff.

The bottom line here is that companies who hire employees under different companies to avoid pay and benefits issues are considered one company under most circumstances.

If you should have any questions, please contact your HRI Representative. Non-clients may email questions to [email protected]

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