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Lawsuits target Gullace's Max restaurants

Rochester Business Journal
December 6, 2013

Restaurants owned by chef and restaurateur Anthony Gullace are targeted in lawsuits filed last week by former workers alleging labor law violations and a breach of contract.
 
Gullace owns Max of Eastman Place Inc., Max at the Gallery Inc. and Max Chophouse, a Brighton eatery identified in court papers by its corporate name-Kaboom of Rochester NY Inc. He previously owned Max to Go Inc., a lunch-trade sushi restaurant near the Liberty Pole that operated as Max Sushi and Noodles for some nine months until it shut down last July.
 
The court actions were filed separately in state and federal courts by Ferr & Mullin P.C., a law firm in Fishers, Ontario County.
 
Gullace this week said he had not been served in either action, was unaware of the allegations and could not comment.
 
Filed Nov. 25 in U.S. District Court in Rochester, the federal complaint largely centers on the Gullace restaurants' tip-related policies. It seeks class-action status on behalf of current and former servers at Max of Eastman Place, Max Chophouse, Max at the Gallery and the closed sushi restaurant.
 
The action lodged in state Supreme Court in Monroe County also was filed Nov. 25. It targets Max to Go, seeking some $51,000 in wages, benefits and penalties allegedly owed to the shuttered sushi restaurant's former manager and assistant manager.
 
In addition to the restaurant corporations, both actions individually name Gullace as the corporations' CEO and Jeffrey Hefke, identified in court papers as a co-owner of Max to Go.
 
Court papers identify the lead class-action plaintiffs, Kaylee Woodward and Sara Cotto, as having worked as servers at unspecified Max restaurants, Woodward for some five years and Cotto for roughly eight months.
 
The federal complaint largely involves provisions of the Fair Labor Standards Act covering compensation for tipped workers. As with hourly workers who do not receive tips, the labor law mandates that tipped employees earn at least the federal minimum wage but allows for tips to count toward the $7.25 an hour required by law.
 
The Max eateries disburse tips that servers earn on credit card payments once a week rather than on the day they are earned, the women's attorney, Robert Mullin, said in an interview. The eateries also withhold some of the total to pay table bussers and bartenders a set share of servers' tips, he added.
 
Neither practice is illegal, and both are widely followed in the restaurant industry, Mullin said. But the law requires amounts withheld and shared to be an accurately computed percentage of each server's actual tips.
 
Gullace's restaurants do not keep records of tips left with charge card payments but instead withhold amounts determined by a formula devised by the restaurant management. The formula, the servers' lawsuit maintains, holds back more than would a percentage of each server's accurately tallied tips.
 
The federal complaint also alleges that in situations when servers were not tipped enough to bring their hourly earnings up to minimum wage, the Max restaurants routinely failed to make up the difference. It also claims servers made less than minimum wage when tasked with jobs such as cleanup for which no tip would be forthcoming.
 
Other violations alleged include the restaurants' failing to properly inform workers of the labor law's provisions.
 
How many people could join the federal case and how much the damages might be if a judge certifies the suit as a class action are not yet clear, Mullin said.
 
Court papers state the number of potentially eligible co-plaintiffs at more than 50, the minimum needed for a federal class action. The actual number could go far higher, Mullin said.
 
"I've spoken to several potential plaintiffs," he said. "It's likely that more than 100 could join."
 
Federal law would allow anyone currently working as a server at the Max restaurants or who has worked for the eateries as a server during the past three years to join the class action. State law, which otherwise follows the federal statute's provisions, allows for a six-year look-back period.
 
The federal complaint estimates Woodward's damages at $16,380 and Cotto's at $6,870.
 
Those figures-based on the women's partial records-do not include penalties, interest and attorney fees that would be added if a jury sided with the servers, Mullin said.
 
The state court action alleges that Max to Go breached a contract signed by Gullace, Hefke and former Max Sushi general manager Ponciano Bolima. It also maintains that Gullace and Hefke failed to pay former Max Sushi assistant manager Brian Lieberman everything he was due.
 
According to the state complaint, Bolima's contract guaranteed him one year's work. Terms called for him to be paid $1,500 a week plus a commission on the restaurant's after-tax receipts, with benefits including health and dental coverage and two weeks' paid vacation, the complaint states.
 
When the sushi restaurant's owners closed the eatery some three months shy of a year, they stopped paying Bolima, ended his health plan and stopped providing other benefits. That breached the one-year guarantee, the complaint maintains.
 
The suit does not mention a contract involving Lieberman but alleges that unauthorized amounts were deducted from his paychecks, shorting the assistant manager on wages he was due.
 
Including fines and penalties for alleged labor law violations, the court document claims Bolima is due total damages of $45,000 and Lieberman is owed a total of $6,500.
 
Gullace's restaurants are high-end establishments ranked by many among the area's top upscale eateries. Max Chophouse on Monroe Avenue in Brighton was No. 3 on the Rochester Business Journal's most recent list of fine-dining restaurants, ranked by average dinner entree price. Max of Eastman Place, in the Eastman School of Music's Miller Center on Gibbs Street, placed eighth.

12/6/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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