Huffpost San Francisco

Cafe Gratitude Closes Under Employee Lawsuits

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CAFE GRATITUDE CLOSES
Yuko Chan

On Tuesday, SFist reported that Cafe Gratitude -- a small, beloved local restaurant chain that serves only organic vegan fare -- will be closing all of its Northern California locations due to "aggressive lawsuits" brought about by former and current employees. The closure will affect all eight of its Northern California outposts, including Gracias Madre, the company's vegan Mexican restaurant in the Mission.

According to SFGate, one of the lawsuits targets allegedly illegal tip pooling, while the other, brought forth by a former bookkeeper, claims the company illegally paid the plaintiff a salary wage instead of hourly to avoid paying him overtime, and he is seeking damages.

In a letter posted to the company's Facebook account, Cafe Gratitude denied any wrongdoing and announced that the company is being forced to close beneath the financial weight of the suits:

"Although we believe that we have done nothing wrong and our policies are completely legal, it will cost us too much money to defend them in court. [...] We were happy to tolerate low margins and sustain ourselves on the transformation and personal growth of our people, while providing local organic vegan food to our community in an atmosphere of unconditional love. That commitment is under attack and we are not able to weather this storm."

However, on Tuesday afternoon, SFGate reported that "the lawsuit number is under $200,000 and this is not a class-action suit (yet)," suggesting that the company should not need to close all locations to "weather this storm."

"These are not huge cases," said Stephen Sommers, the attorney representing the wage and hour claims, to SFGate. "There's no reason, financially, for them to close eight locations. They are not closing because of these lawsuits. There's something else."

But Cafe Gratitude owners insist that the suits are both devastating and debilitating.

"For seven-and-a-half years we've been willing to work and tolerate low margins because our real wealth was the transformation of our people," said co-owner Terces Engelhart to SFGate. "And now that's being threatened by the lawsuits. October was the best month we ever had in the history of business."

In recent years, Cafe Gratitude has suffered from several tense encounters with employees. In 2009, East Bay Express published an expose on the company's tight relationship with the Landmark Forum self-help philosophy, and claimed that the company forced the philosophy upon employees and assigned mandatory Landmark seminars, compromising the personal beliefs of employees.

Adding to the already strained internal relationship, Vegansaurus reported that many employees, including those high up in the company, did not know about the closure until reading about it on SFist on Tuesday morning.

The restaurants will remain open for several months while the details are settled. And while the alleged internal struggles are shady at best, we are already mourning our tahini-spiked sea veggies and hazelnut-fig-date smoothies. Sigh.

Read the entire letter about the closures by owners Matthew and Terces Engelhart below:

With great sadness we are announcing the upcoming closing/sale of all Northern California Cafe Gratitudes.

A series of aggressive lawsuits has brought us to this unfortunate choice. Although we believe that we have done nothing wrong and our policies are completely legal, 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 Cafe Gratitude are insufficient to sustain and defend our community, they have refused to give up and are forcing us to close.

We appreciate the loyalty of our employees and customers over these past 8 years and are grateful for having had the opportunity to serve each of you. We were happy to tolerate low margins and sustain ourselves on the transformation and personal growth of our people, while providing local organic vegan food to our community in an atmosphere of unconditional love. That commitment is under attack and we are not able to weather this storm.

This process will take a few months so please keep coming in and let's celebrate our 8 years of success together, we are grateful for you!

We have come to realize that it isn’t how we serve that is most important but rather that we serve.

Our mission will survive this, as love cannot be threatened.

CORRECTION: An earlier version of this article stated that the suits were filed by former employees, and that the bookkeeper is female. The bookkeeper is male and is currently working for Cafe Gratitude.

UPDATE: Cafe Gratitude co-owner Terces Engelhart posted a call to help on the company's Facebook page. In the post, Engelhart asked patrons to continue visiting the restaurant locations, purchase retail items and join the company workshops if they wish to show support. Engelhart also called on those who had attended workshops to share their experiences.

"If you have participated in any of our workshops, please take what you learned, that had value to you, and give it away!" she wrote.

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Filed by Robin Wilkey