A federal court in Northern California ordered franchisees of 14 Subway restaurants to either close or sell their stores by November 27 and pay employees almost $1 million in back wages.
A federal investigation found that operators John and Jessica Meza allowed children as young as 14 to 15 years old to handle dangerous equipment and work illegal hours. They also failed to pay employees regularly, including hundreds of bad checks and keeping tips from customers.
Officials also discovered the franchisees interfered with the review by coercing workers to not cooperate and threatening children who raised concerns. The Mezas’ associate, Hamza “Mike” Ayesh, was said to have threatened an employee who complained about receiving a bounced payroll check.
“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,” Ruben Rosalez, San Francisco’s Wage and Hour Division regional administrator, said in a statement. “With the combined efforts of Wage and Hour Division investigators and the department’s Office of the Solicitor, these employers are facing the consequences for endangering the safety and well-being of children and violating federal law.”
The Department of Labor said Subway notified the Mezas in June that it knew of the litigation and that they were violating federal law, but allowed them to continue operating their stores.
Subway said it doesn’t condone the operators’ behavior and that it “takes these matters very seriously.”
“Immediate steps were taken to remove the franchisee from the system when we learned of the DOL investigation,” a Subway spokesperson said in a statement. “Our restaurants are independently owned and operated, and franchisees are required to follow federal, state and local laws.”
On May 19, the Department of Labor obtained a preliminary injunction to prevent the operators from violating child labor laws, retaliating against employees, and obstructing a federal investigation. On September 27, the court instructed the Mezas to pay 184 workers $475,000 in minimum wage, overtime, and tips, and an equal amount in liquidated damages, in addition to $150,000 in penalties. The franchisees and Ayesh must also pay $12,000 in punitive damages because of their retaliatory conduct.
“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, San Francisco’s regional solicitor of labor, said in a statement. “This case sends a clear message to others who—despite ongoing litigation and a preliminary injunction—continue their wage theft that the department will use the tools at its disposal to end their illegal practices.”
