Santa Clara County’s counsel has sued a Cupertino-based Taiwanese restaurant that owes its employees more than $200,000 in unpaid wages from a judgment issued more than a decade ago, seeking to compel it to finally pay its employees what it owes.
The lawsuit was filed in Santa Clara County Superior Court under a new California law that allows much larger penalties for employers who fail to pay withheld wages for longer than six months. It alleges that the owners of Liang’s Village dissolved their former corporation and incorporated a new one to avoid a stop-work order issued after it failed to pay judgments to its employees for five years.
“There are workers that have suffered a longstanding harm here who had their wages stolen over a decade ago, have never been made whole and need justice that we’re able to achieve through the administrative process,” said county counsel Tony LoPresti.
The lawsuit seeks an injunction to stop the business from continuing to violate labor law and asks a judge to order civil penalties — tripled under state law — of the full amount owed on the 2013 judgment, plus attorneys fees and other penalties. If the lawsuit succeeds, the owners of Liang’s Village could owe up to $800,000 — the initial $90,000 judgment that with interest has grown to more than $200,000, plus $600,000 in tripled penalties. The penalties would be split between the seven impacted employees and the state’s labor commisioner’s office, LoPresti said.
In addition to the restaurant and corporations, the lawsuit names co-owners Ivan Cheng-Chi Liang, Austin Liang, Jessica Liang, Erica Liang and Janine Lee, as well as Mama Liang’s, the restaurant’s prepared food service, as defendants.
Liang’s Village did not immediately respond to a request for comment on Tuesday.
LoPresti said that it has been a “long-standing challenge” for workers rights advocates to hold businesses accountable that dissolve then reincorporate as a “slightly altered” business.
“It’s a shell game that they engage in to avoid accountability,” he said. “It’s the workers that are the victims, and typically it’s vulnerable workers really struggling to make ends meet that suffer that kind of compounding injustice.
“As civil prosecutors, we’re going to go after businesses in court if they engage in that kind of fraudulent activity to avoid paying workers,” LoPresti added. “When we go after them, we’re not just going to go after them for what they owed in the first place. We’re going to use the tools that the legislature has provided us.”
Ruth Silver Taube, supervising attorney for the workers’ rights practice at Santa Clara University’s Katharine & George Alexander Community Law Center, said that it is a common tactic used by “unscrupulous employers” that is “horrible” for workers.
“It’s heartbreaking for workers because often these are low-wage workers and they live paycheck to paycheck,” Silver Taube said. “It’s very expensive to live here, and these were wages that they earned.”
Liang’s Village was initially cited by the California Labor Commission in 2013 for failing to pay several employees overtime pay and minimum wage, as well as failing to provide itemized statements of wages, according to the lawsuit. After those citations were upheld at an appeal, the Santa Clara County Superior Court imposed judgments totaling nearly $93,000.
The restaurant then ignored those judgments and continued its operations, LoPresti alleges.
The labor commission issued a stop-work order to the business in 2019 due to the unpaid judgments, LoPresti said. Less than two weeks later, the business owners allegedly closed the corporation it operated the restaurant under – Liang’s Kitchen Cupertino, Inc. – and registered a new corporation, JAJE Foods, Inc.
That new corporation continued operating Liang’s Village in the same location, under the same business name, with several family members listed as managers in their same roles and members of the same family taking over officer positions in the successor corporation, the lawsuit alleges. The restaurant also included the same menu in its application to substitute the corporation named on the county food facility permits.
That makes the corporation liable for the outstanding judgments as the previous corporation’s successor under state labor law, the lawsuit argues.
“It is doubtful that customers knew there was any change in business operations given that the same food services were offered out of the same location under the Liang’s Village name,” the lawsuit alleges.
This action by the Liang family was also in violation of unfair competition laws, LoPresti alleges in the lawsuit, because the restaurant continued to profit from their business unlike other businesses that have complied with labor code regulations.
LoPresti added that he hopes the lawsuit serves to dissaude other local businesses from failing to pay judgments for unpaid wages.
“If it becomes clear to businesses that that’s what they’re facing, they’ll start acting better,” LoPresti said.