This week Bay Area vegans were shocked by news that after seven years in business, local vegan chain Cafe Gratitude is closing all its Northern California locations, including Gracias Madre on Mission Street. Owners Terces and Matthew Engelhart made the announcement on their Facebook page and their company website. But according to the Vegansaurus blog, many employees only found out after the news were posted by SFist. Kind of unwelcome news to get after the Thanksgiving holiday.
The owners state that “A series of aggressive lawsuits has brought us to this unfortunate choice. … it will cost us too much money to defend them in court. Despite telling the attorneys that brought the lawsuits that the current structure and resources of Café Gratitude are insufficient to sustain and defend our community, they have refused to give up and are forcing us to close.”
The closures affect locations in San Francisco, Oakland, Berkeley, San Rafael, Healdsburg and Cupertino, as well as the Gracias Madre restaurant on Mission.
One of the current lawsuits involves the lack of mandated-breaks, and allegedly illegal tip pooling —waiter tips were used to cover daily operating losses, and shared with supervisors and offsite kitchen staff, according to reports. The second lawsuit is a claim for unpaid overtime wages for a bookkeeper position, that according to labor laws was misclassified as salaried instead of hourly.
Stephen Sommers of Kumin Sommers LLC, the lawyer who filed the current lawsuits against Cafe Gratitude, contacted Grubstreet to explain his side of the story. He remains skeptical about the Engelhart’s claim of financial hardship to cover the $200,000 worth of lawsuits, and states that their motives might be more shady.
Among his examples, he points out that the owners picked an expensive defense lawyer Littler Mendelssohn, the expense of a three-week retreat for the managerial staff at a property owned by the Engelharts in Hawaii, and the purchase of three paper shredders. I’m not sure that these examples prove anything, and in my opinion give the impression of a veiled attempt at trial by media.
Sommers speculates that it all seems like a convenient excuse to dump the less profitable Northern California restaurants. In the meantime, expansion plans into Southern California continue. A Venice Beach location is scheduled to open in Spring 2012.
The closures don’t affect the Los Angeles location, a popular celebrity hangout and one of Top Chef judge Gail Simmon’s favorite LA stops, because it’s under a different partnership.
I confirmed by phone that the new Santa Cruz location, which opened August 15 will remain open. That location is managed by Matthew Manzo, stepson of owner Matthew Engelhart, while two other brothers manage the shop in LA.
Graphic Credit: Cafe Gratitude sign logo (designed by Julia D. Stege)