Cheesecake Factory Fined for Wage Theft

Cheesecake Factory Inc. in Calabasas and its janitorial contractor Americlean Janitorial Services Corp. have been cited for $4.57 million in wage theft following an investigation by an industry watchdog and the California Labor Commissioner’s office. The restaurant group and Americlean, which subcontracted Cheesecake’s janitorial services to Pickerington, Ohio-based Magic Touch Commercial Cleaning, were said to have denied overtime pay and paid less than minimum wage to about 600 janitors over a three-year period. The investigation was launched by Maintenance Cooperation Trust Fund, a janitorial industry watchdog, and included eight Cheesecake Factory locations in San Diego and Orange counties. Investigators found that workers were not given proper meal or rest breaks and were required to complete additional tasks that constituted up to 10 hours of unpaid overtime every week. “We take matters of this nature very seriously. We are continuing to review the allegations and will respond to the wage citation within the time provided,” Sidney Greathouse, vice president of legal services at Cheesecake Factory, said in an email to the Business Journal. Cheesecake Factory has previously contracted with janitorial companies that ran afoul of wage and labor laws. One of its contractors was ordered to pay $14 million in a similar case in 2007, while another was the target of a private lawsuit by janitors in 2010. This time, though, the rules have changed: The company is legally responsible for the actions of its contractors under SB 588, legislation that went into effect in 2016. The law states that firms that contract with janitorial service companies are held jointly liable for wages for work performed on their property. Shares of Cheesecake Factory (CAKE) fell 70 cents, or 1.3 percent, on Monday to close at $53.36 on the Nasdaq.