Reporter: Ko Lyn Cheang
Link to Article: https://www.sfchronicle.com/sf/article/lee-s-deli-settlement-19493388.php
June 06, 2024
The labor rights coalition that helped workers may have its budget slashed by Mayor London Breed as she deals with a $789 million deficit.
Seventeen former employees of a closed San Francisco dining institution will receive nearly $60,000 in back wages owed since the pandemic in a deal with the owner announced Thursday.
The agreement between the workers, all Chinese immigrants, and Lee’s Deli owner Leroy Quan, whose 40-year-old chain once had 12 locations centered in the Financial District, was brokered by a grassroots collaborative with deep ties to the Chinese American community. That collaborative now faces an uncertain future after Mayor London Breed proposed halving its modest budget as she looks to address a $789 million deficit over the next two years.
“I feel that the government should more greatly prioritize the working class and vulnerable groups,” Anne Vong, 58, a former cashier and cleaner who received $4,300 in unpaid wages as part of the settlement, said in Cantonese. “And should not be cutting funding for something that is very important to us.”
Vong was referring to the Workers Rights Community Collaborative, a partnership between the city’s Office of Labor Standards Enforcement and seven community organizations, including the Chinese Progressive Association, which advocates for the city’s lower-income Chinese immigrant community, and the Asian Law Caucus, which provides legal aid.
Both organizations worked with the Labor Standards Enforcement office to reach a settlement with Quan that delivered his former workers their back wages plus one week of vacation pay.
The office audited payroll records to determine the number of workers affected and the amounts they were owed. But Jenny Huang, the lead Chinese Progressive Association organizer on the case, said it is possible there are more workers who have not yet come forward, in part, because the records were not comprehensive.
Joyce Lam, acting co-director of Chinese Progressive Association, which has organized workers in other unpaid wage cases, said the settlement is notable given how difficult it usually is to recover owed wages after a restaurant closes. She and other workers hailed the settlement as a victory for workers’ rights — one that could become less common if the collaborative behind it sees its budget slashed.
Opened in 1983, Lee’s Deli at its height operated a dozen locations selling sandwiches and Chinese buffet staples like fried rice and sweet and sour pork. Quan, 78, said he shared his success with his employees, providing profit-sharing incentives along with paid sick leave and time off. The COVID-19 pandemic permanently altered his business’ course.
Quan said he lost $200,000 in the first 20 days of San Francisco’s lockdown and never recovered as the Financial District emptied of office workers, workplaces went remote and the foot traffic that the business depended on didn’t return. He said he raised $600,000 by refinancing his home, cashing out investments and tapping his retirement savings to keep his business afloat, but started closing locations in 2020 when he couldn’t make payroll. The last two closed in February.
Lei Pan, 54, said he commiserated with his co-workers when his paycheck started coming late and then not at all. “Everyone felt, ‘What on earth are we going to do?’ ” Pan said in Mandarin. “We also felt very confused.”
Pan, who started working at the Second Street location in 2005, whipping up Chinese dishes like spicy Mapo tofu, said he would tell himself to “forget it,” that “business was probably hard.”
“We didn’t make much noise about it,” Pan said.
On Jan. 9, a Chinese Progressive Association outreach worker, Selina Luo, was conducting routine visits with single-rental occupancy unit tenants in Chinatown.
One confided that her father, a former Lee’s Deli worker, was having a hard time getting paid back wages.
“If I hadn’t visited her, hadn’t told her about labor law, I don’t think her dad and other workers would have been so successful in getting their wages back,” Luo said in Mandarin.
The worker and three others filed a claim to the Office of Labor Standards Enforcement in February, with help from the Chinese Progressive Association.
In March, 20 former workers sent Quan a letter through the collaborative asking to meet. “We understand the pandemic hit the restaurant hard, every worker shared the burden with you, the owner, together,” the letter read. “But you have not paid us the wages we are owed for work.”
Quan said he responded quickly.
“There was no attempt to avoid, there was nothing we said we did not owe,” said Quan, now fighting to stave off bankruptcy. “The legacy I would hope to keep is that they were treated fairly.”
Still, the deal may not have happened without the efforts of a collaborative that has spent years building relationships in San Francisco’s immigrant communities and now faces the prospect of doing that work with less.
From the start of its five-year contract with the city in 2022, the collaborative said it had provided in-language education and support about workers’ rights to 23,340 people.
The collaborative is now faced with losing $383,000 of its approximately $783,000 annual budget. Lam said the Chinese Progressive Association is evaluating its options, including whether it will have to lay off staff. She said that the cuts will significantly reduce the collaborative’s capacity to serve community members experiencing labor law violations, especially low-wage immigrant workers.
The office of the city administrator, which is responsible for funding the collaborative, said it was heeding a Breed directive to identify 10% in general fund allocations that could be cut.
“We value our partnership with the Workers Rights Community Collaborative, which has supplemented the work of the Office of Labor Standards Enforcement and during a difficult budget will work to ramp up staff outreach and education and will work with the WRCC to best direct limited resources,” a statement from the office of the city administrator read.
The mayor’s office said that Breed had to make “tough budget decisions.”
Without the workers’ rights collaborative, Pan said, he would not have known how to get back the $2,000 that he was owed.
“Even though the money isn’t a lot, it’s very important to us,” he said in Mandarin. He added, “It is only now, after the business has closed, when no one is working there anymore, that everyone who was owed wages united together, with one heart, and dared to tell the boss. Truly, workers are a vulnerable group.”
Reach Ko Lyn Cheang: KoLyn.Cheang@sfchronicle.com