IN SUMMARY

A wage theft settlement with the Cheesecake Factory is one of the first uses of a state law designed to hold bigger companies accountable, as well as their contractors.

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. 

“My coworkers and I had to work long nights cleaning the kitchen and dining room of the restaurant,” said Naxhili Perez, who cleaned a San Diego Cheesecake Factory from 2016 to 2018. “We worked until morning, all without proper meal and rest breaks.” 

The state’s Labor Commissioner’s Office formally announced the settlement and handed 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.

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. And the settlement is the first of this kind in the janitorial industry, said Yardenna Aaron, the trust fund’s executive director.

For years, workers’ advocates have complained that with the rise of contracting and subcontracting in janitorial work, 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. 

“One time I recall staying two hours after my eight-hour shift,” Yadira Santos, another former janitor, said at Tuesday’s press conference. “Ultimately that meant we had to work overtime night after night. And we never got paid for that extra time.”

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.

Labor Commissioner Lilia Garcia-Brower speaks on the front steps of the Hall of Justice in Los Angeles, during a press conference on Feb. 9, 2021. Photo by Ringo Chiu, AP Photo
Labor Commissioner Lilia Garcia-Brower speaks on the front steps of the Hall of Justice in Los Angeles on Feb. 9, 2021. Photo by Ringo Chiu, AP Photo

“It’s a message to all brand names out there,” Aaron said in a press release. “If you don’t ensure your contractors comply with laws protecting workers, there are very real consequences.”

But the case also shows the hurdles for enforcing California’s strict labor laws in low-wage industries employing mostly immigrant workers. 

When the state cited the companies in 2018, it calculated the total amount in unpaid wages and damages owed to more than 500 workers to be nearly $4 million. 

The Cheesecake Factory and its contractors appealed, which is common for employers in such citations. For the next two years, the proceedings became mired in evidentiary disputes and scheduling conflicts, appeals documents previously obtained by CalMatters show. 

Then the pandemic hit, and the appeal was put on hold until January 2021. Settlement talks were underway by August 2022 and the agreement was signed in September 2023 — for only one-fourth of the initial citation amount.

“We have very powerful laws in California,” García-Brower said on Tuesday. “These laws are not utilized as often as we’d like them to be.”

That’s in part, she said, because it’s time-consuming to prove multiple companies’ roles in alleged workplace violations — making the testimony of workers all the more important.

Now, the state and the Maintenance Cooperation Trust Fund are looking for the company’s former janitors to receive payments for unpaid work they did as long as nine years ago. They’re in touch with about 60 former workers, the trust fund said in a press release, but believe about 500 more may be eligible. 

Janitors who worked at Cheesecake Factory restaurants in Brea, Irvine, Huntington Beach, Newport Beach, Mission Viejo, Escondido and San Diego between Aug. 31, 2014 and Aug. 31, 2017 are asked to call (619) 213-5260.