06/22/2012 02:59 pm ET Updated Dec 06, 2017

La Boulange Investigation: Bakery Accused Of Violating San Francisco Health Care Ordinance (VIDEO)

Popular San Francisco bakery La Boulange Café and Bakery made headlines earlier this month when it was purchased by Starbucks for $100 million.

But now, the company is under investigation for accusations that it violated San Francisco’s mandatory health care ordinance by failing to inform employees about available coverage.


According to CBS, workers who were entitled to health care benefits alleged that they were never offered coverage after years of working for the company. Workers also alleged that mandatory paperwork about health care benefits was not posted in employee areas.

Reportedly, La Boulange did not file required health care records until CBS called for comment on Monday. When the forms were submitted, the records indicated the company had set aside hundreds of thousands of dollars for employee health care reimbursement, but no health care funds had actually been reimbursed.

In May, a San Francisco janitorial services company was ordered to pay $1.3 million after it was charged with a similar violation.

Under San Francisco’s health care reimbursement option, a company may recollect any unused reimbursement funds after two years--a detail that some lawmakers have called a “loophole.” Last year, Supervisor David Chiu argued that the reimbursement option is a tempting route for some businesses, even though it may not offer the best health care in practice.

“This is a significant legal victory,” said City Attorney Dennis Herrera in a statement about the janitorial service company's $1.3 million order. “Not just for the employees who were systematically denied benefits to which they were entitled, but for all the competing businesses that play by the rules.”

La Boulange contacted CBS after the allegations with a statement claiming that the company "abides by all San Francisco laws" but admitted that there may have been an "awareness gap."

Watch CBS's video for more on the story below: