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John and Jessica Meza had a real good thing going on. They owned 14 Subway restaurants in Northern California, raking in both profits and $190,000 in PPP loans (of which $66K was forgiven). Alas, their sandwich empire is about to fall, as they have been ordered by the the US District Court for the Northern District of California to cough up $625,000 in backpay and damages they owe to the 184 employees they apparently did not realize they were supposed to pay money to work for them. Whoops!
To be fair, they’ve only had since 1865 to figure that out.
As part of the consent order, the US Department of Labor is requiring them to sell off or close all of their locations. This is not a common occurrence, but it does seem to make sense in light of the whole “not being especially partial to paying their employees and violating a ton of other labor laws” thing.
The Mezas’ site operator Hamza “Mike” Ayesh also got into some trouble, as all three were required to pay an additional $12,000 for actually threatening an employee who complained about a paycheck bouncing.
Aside from the wage theft, the Mezas racked up piles of other labor violations, many related to their employment of 14 and 15-year-olds — including not requiring work permits, scheduling them beyond their legally allowed hours, not allowing them to take breaks and having them operate dangerous machinery they were not legally allowed to operate.
It was, in fact, three teenage girls who blew up their whole scheme. Allesandra Chavez, Yanelli Vargas and Lorenza Tapia initially brought up the issues during an impromptu class discussion, which led to an investigation by local newspaper the Press Democrat, which itself then led to the US Department of Labor investigation that brought the Subway Swindlers down.
Via Press Democrat:
Often, it was just one or two minors covering the entire shop, even late shifts that involved closing up.[…]
There were cameras inside the sandwich shop, and if someone took a break to eat or use the restroom, a camera’s red light would begin flashing, they said. Sure enough, they would immediately get a text or phone call from Ayesh urging them to get back to work, along with a photo grabbed from the store camera.
The three teenagers also complained of unsanitary conditions at the Subways, including cockroaches, yellowing walls and refrigerators that remained out of commission for up to three weeks. The students showed The Press Democrat photos of wilting food in display cases and a video of ants swarming over a kitchen faucet.
“I was like ashamed of that,” Vargas said. “I didn’t feel good if people were coming and seeing the store that dirty. So sometimes we’d close the store and clean as fast as we can.”
That … is gross.
All three teenagers were in difficult situations, trying to help out at home, save money for school, take care of their families, and the Mezas took advantage of that. The girls also noted that the vast majority of those who were screwed by the Mezas were Latinx, many of them immigrants — likely because the Mezas assumed they’d be less likely to report.
The Mezas also, notably, kept credit card tips for themselves and never distributed them to the employees that earned them.
Unfortunately for their former employees, the Mezas and Ayesh say they only have about $12,000 on hand between them, which is a far cry from the hundreds of thousands of dollars they owe. Hopefully, by selling the remaining restaurants, they can get it together.
The Mezas, in the end, were actually quite lucky. Normally, when you steal hundreds of thousands of dollars, you go to prison — but because they were stealing from teenagers and others making minimum wage, it didn’t count as real theft or anything. I highly doubt any Republican presidential candidates will be encouraging people to just go ahead and shoot their employers. After all, it’s hardly as if they stole a pack of gum from CVS or something.
But wage theft is, actually, a serious problem in the United States. The Economic Policy Institute estimates that approximately $50 billion is stolen from workers per year. Unfortunately, there’s just really no real way to tell, because so much of it goes unreported. Some of it is as outright as this, but a lot of it is in not paying people overtime, not giving servers their hourly pay, misclassifying workers as “independent contractors” when they are actually employees and more.
We could do better, but, you know, we probably won’t.
