A federal court has ordered the owners of 14 Subway locations near San Francisco to pay nearly $1 million in damages and back pay to their employees. The court also instructed the owners, John and Jessica Meza, to either sell or shut down their businesses. If the owners decide to sell, the proceeds must be given to the Department of Labor. The ruling comes after federal investigators found several labor law violations at the Subway locations. These violations included employing underage workers for dangerous tasks, disregarding work hour regulations for minors, irregularly paying employees, issuing bad checks, and unlawfully keeping customer tips.
In addition to the labor law violations, the court also found evidence suggesting that the Mezas and their associate, Hamza Ayesh, had attempted to coerce employees into not cooperating with the investigation. Ayesh was reported to have threatened an employee who complained about receiving a bad check. While the Mezas did not admit to these allegations, they did admit to issuing bad checks and violating some labor standards. Their attorney, Arkady Itkin, stated that the couple has modest means and is unlikely to be able to pay the agreed sum. Itkin also emphasized that the settlement agreement may give the false impression that they will easily be able to pay the penalty, but that is unlikely to happen.
This court ruling highlights the severe consequences faced by franchise owners who violate labor laws and mistreat their employees. The Mezas were found guilty of subjecting underage workers to dangerous conditions and failing to comply with regulations regarding work hours and employee payment. Their misconduct also extended to unlawfully holding onto their employees’ tips. Moreover, the court determined that they had attempted to intimidate and silence their workers during the investigation. However, the Mezas did admit to some violations, such as issuing bad checks and violating certain labor standards. Despite the substantial penalties imposed on them, their attorney claims that their financial situation makes it highly improbable for them to pay the ordered amount in full.