How Good Does a Sandwich Have to Be? Wage Theft, Paseo, and the Industry

The best sandwich I ever had was from Paseo. In fact, every sandwich I ever had from Paseo was the best sandwich I ever had (the fact of it being the sandwich I was eating now giving it the winning edge over sandwiches I had already eaten and could therefore only remember with wistful fondness). I may or may not ever have a sandwich that good again, and I mourn for all the people in the world who will now never get to eat one, or eat one again. If you ever ate at either location, you know what I’m talking about. If you didn’t, well, you’ll just have to take my word for it (or, you know, read one of the many valedictions and cris de coeur posted in the last couple of days since the company shuttered both their Fremont and Ballard locations, apparently without even notifying their employees).

It was hard to find, even if you knew where it was, unless you went there at lunchtime, when you could spot it from blocks away thanks to the line out the door, rain or shine. It was not uncommon for the place to close before dinner because they had run out of food.

But man oh man, when your wait was done and the plate with your name on it came up, what heaven awaited: tender, slow-roasted pork on the most perfect sandwich bread (crusty enough to hold together, mostly, but doughy enough to sop up all that juicy flavor) topped with just enough cilantro, peppers, and onions to give it a slight vegetal crunch. It was enough to send your umami circuits into sustained platform orgasm, the flavor lingering on your palate like the taste of a lover’s sweat.

Now it’s gone, I regret not eating there more often in recent years (I worked as a bartender in Fremont for six years; since I’ve moved (and moved on), I don’t get down to Fremont much). Given those lines out the door (and the $1.5-2 million a year in sales), I figured it would be there forever, and was as surprised and dismayed as anyone by the news of its sudden closing.

I was not surprised (though I was dismayed) to read about the lawsuit by four former employees alleging discrimination and wage theft.

*Before continuing, a disclaimer: I am not a lawyer, and even if I was, the trial has yet to begin (it’s scheduled for next October). I did, for what it’s worth, spend twenty-six years working in bars and restaurants.*

When news of the lawsuit broke, reactions were swift, with most people jumping on whichever side best fit their personal confirmation bias. For some, the plaintiffs were the bad guys, helping bring down a beloved institution. For others it was the defendants, skirting labor laws and withholding compensation from overworked and underprivileged employees. The filing of bankruptcy paperwork only complicates the situation, as does this full-throated defense of Paseo’s ownership by nine (now) former employees.

The workers referred to that group as “the family” and said they all come from the same household. “The family” ran the kitchen for years, they said, since before Paseo became well-known and had lines of customers out the door…

But “the family” who ran the kitchen, the workers alleged, were mean-spirited. Lopez said he left the restaurant and only agreed to come back after last March, once they had been fired. “I was worried about coming back to work while ‘the family’ was here,” he said.

“The family” may very well have created what some folks would call a hostile work environment, and it may be that their allegations of race-based discrimination are undermined by the above information. Having spent all that time in the Industry, I’m not even a little surprised to find relations between longstanding and newer staff less than entirely collegial, especially in such a high-volume environment. But to my mind, the money-shot allegation isn’t the racial bias but the wage theft, which I’m inclined from both my own experience and what information is available to believe.

Certainly part of this is my own confirmation bias. Wage theft is commonplace in the Industry (and elsewhere), and two and a half decades of experience has given me plenty of anecdotal evidence, through both personal experience and hearsay. I think you’d be hard-pressed to find any Industry lifer who doesn’t have at least one story about an owner who dipped into the tip jar or shorted hours or used accounting tricks to get out of paying overtime, if they didn’t just outright refuse.

Which is what the owners of Paseo are alleged to have done. According to the plaintiffs’ complaint:

2.2  During their employment with Paseo, Plaintiffs did not qualify as exempt under the Washington Minimum Wage Act. They were paid on an hourly basis. With the knowledge and approval of Defendants, Plaintiffs routinely worked in excess of forty hours per week.

2.3  Plaintiffs were paid an hourly rate through Defendants’ payroll system for eighty hours for each pay period. Plaintiffs were also paid additional sums in cash that, upon information and belief, were not tracked through Defendants’ payroll system. The cash payments were approximately equivalent to number of hours worked by Plaintiffs over forty for the applicable week multiplied by their standard hourly rate. Plaintiffs were not paid an additional fifty percent of their hourly rate for hours worked over forty.

To which the defendants responded:

 1.10 Defendants deny Paragraph 2.2. Defendants allege further upon information and belief that plaintiffs participated in a tip sharing arrangement that was discussed with employees as they were hired. The tips pooled among the employees were significant and represented more than half of each plaintiff’s compensation for a representative period, of not less than one month.

1.11  Defendants admit only that plaintiffs were paid an hourly rate far in excess of the minimum wage, received additional sums in cash, received compensatory time-off, and participated in a tip pool that doubled their total compensation. Defendants deny the remainder of Paragraph 2.3.

So, on the complainants’ side, we have the allegation that employees worked overtime off the books, for which they were paid their regular wage (instead of the legally-mandated time-and-a-half) under the table. To which the response is basically “we paid you better than minimum wage, and you got tips.” I’m sure I needn’t point out the dodge.

But what really seals it for me is the bankruptcy filing. On page 26, we see that even though the restaurant’s gross receipts have been between one and a half and two million dollars per year for the last three years, it cannot pay some thirty thousand dollars to its creditors (much of it seems to be owed in taxes, along with over ten thousand to purveyors and another few thousand owed to employees, including the nine who spoke to the Stranger).

Why does that seal it for me? Well, aside from the you-have-to-be-kidding-me factor, what I would guess is going on (and this is, to be fair, speculation on my part, and should be taken with the proverbial grain of salt) is that Mr. Lorenzo’s lawyers have advised him he’s likely to lose in court, which will not only cost whatever damages are awarded, but will open up a whole world of hurt for all the labor law violations (working people off the books is a big no-no, even though, in my experience, it’s not uncommon), never mind the back taxes and other employer obligations that would have been shirked by not reporting on employees’ actual income. I imagine the penalties involved could be quite significant, and that the company’s declaration of bankruptcy is a strategic pre-emption of the worst of them. Given the fact that Mr. Lorenzo recently signed a new ten-year lease on their Fremont venue, it’s difficult to see the move as other than in reaction to the lawsuit.

Maybe I’m wrong. But I don’t think I am.

Whatever the court decides, the closure of Paseo offers all of us the chance to ask some important questions of ourselves and the society we inhabit. The plaintiffs’ allegations of wage theft, lack of legally-mandated breaks, and reprisals for complaint about illegal behavior reflect widespread practices in the food and beverage service industry. Indeed, that those things happen is pretty well taken as read by those who make their living slinging food and drink. Some even take a kind of pride in the suffering they endure as a result, and decry those who lack the fortitude to make it in the Industry. But the fact remains that for every delicious plate that comes to your table, a lot of people worked very hard for comparatively little money to make it happen. So the question remains:

How good does a sandwich have to be to justify that kind of exploitation?

However their colleagues might have felt about them, ‘the family’ was the core of Paseo’s business for a long time, the ones who did the actual work, week in, week out, sweating through the steamy hell of a commercial kitchen to produce what was undoubtedly the best sandwich in the Pacific Northwest, and possibly beyond. Week in and week out, the fruits of their labors brought joy and sustenance to countless patrons, who gladly lined up for tens of minutes in all manner of weather conditions to get a plate of that succulent goodness, and it put millions of dollars in the till. And while it sounds like they were compensated better than most kitchen staff, they were nonetheless shorted when it came to their overtime, which meant money that should have been in their pockets went into the owner’s pocket instead.

Restaurants are a tough business. Everybody knows that. Margins are thin, costs high. Especially labor costs (one of the reasons restaurants and restaurant workers featured so prominently in Seattle’s minimum wage debate last spring). I’ve seen cooks clock out and then clean the kitchen for free, chef-owners void all the cash sales at the end of the night, hours shorted on paychecks, tip jars raided. I’ve worked ten and twelve hour shifts with maybe ten minutes of break time to wolf down a plate of food I didn’t even have time to chew. Talk to Industry lifers and there’s a certain pride in accepting such difficult conditions. Indeed, many of the Industry folks I’ve talked to or seen in my facebook feed see the plaintiffs as the bad guys, because we all know the deal, and if you can’t take the heat, stay out of the kitchen.

And that’s the thing. The allegations the plaintiffs are making about the way business was done at Paseo are not at all exceptional. It’s the norm, how shit works, and we all know it. And it’s widely believed among Industry folks that if employers weren’t cutting every corner they probably wouldn’t make it. Many don’t.

Last night while I was writing the first part of this post, I had a discussion on facebook with a friend who’s still in the Industry, who made a point I thought was very telling. I’m paraphrasing, but what she said was essentially that if every restaurant was audited for the kinds of practices that look to have put Paseo out of business, then thousands would be unemployed, because so many would be be shut down. And she’s right. If labor laws as they exist on the books were rigorously enforced in the restaurant industry, a solid percentage of places would be out of business the day after their audit.

I don’t think anyone wants to see that happen. Restaurants are too ingrained into our way of life, and at their best they are a source of great happiness for many customers. Whatever the working conditions, Paseo did more than just fill hungry bellies; it brought joy into people’s lives, pleasure to their day. If you were lucky and/or patient enough to make it to the front of the line, then something good was going to happen for you, and knowing it was there gave you something to look forward to, whatever was going on in the rest of your world. There’s real value to that, and its loss is felt even by people who believe that the owners are getting their just desserts.

But the people behind the scenes, who do the actual work, need their just desserts, too.

The closing of Paseo is a sad occasion, no matter how you look at it. People lost jobs, two neighborhoods lost places that helped make them great places to live and work and visit, and worst of all, nobody gets to eat that amazing food anymore. But the closing of this beloved institution also gives us all an opportunity to reflect on who pays what cost for us to enjoy those culinary experiences that so enrich our lives and worlds. I hope we all will, and that we can figure out a way to keep those experiences alive and available while seeing to it that the people who make them possible are taken care of as well as they take care of us.

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