Simon’s says ‘not guilty’: Former employees accuse owner of stealing tips, unfair business practices

The venerable midtown dive delayed an apartment takeover, but can it survive internal turmoil?

Not everyone wants to save Simon’s Bar & Cafe, the venerable Midtown dive that could eventually be swallowed up by an encroaching development of luxury lofts.

Three former employees have sued the 16th Street mainstay and its renowned proprietor, Simon Chan, in an unfair business practices lawsuit that’s potentially headed for a summer trial, says plaintiffs’ attorney Gaurav Bobby Kalra.

Kalra filed the suit on July 9, 2014, in Sacramento Superior Court. The 14-page complaint alleges that Chan made servers pay for customer credit card fees out of their own pockets, garnished their tips to pay undocumented workers under the table, and fired or “constructively discharged” the three plaintiffs after they protested.

Attorney Shane Singh is representing Simon’s and its owner, and says those claims are untrue. “We disagree with these allegations,” he told SN&R.

Two of the plaintiffs had worked at the restaurant for more than a dozen years when they say they were forced out in December 2013. Heather Ludlow was a server for more than 15 years, while Betty Ho worked as one for more than 12 years, until she says she complained about not getting fully compensated for her hours, having to pay customers’ credit card fees and pool tips.

Referring to late 2013, the complaint states: “Within the past several months, defendant Simon Chan became increasingly aggressive with staff indicating that they need to accept paying for business expenses, like credit card fees, and if they didn’t like it they were free to get the [expletive] out.”

Reached by phone, attorney Kalra declined to comment on the ongoing legal matter, save for a quick recap of his clients’ allegations: “A lot of weird things going on,” he said.

The third plaintiff, Mary Elizabeth Davis, worked as a server between October 2011 and April 2013. The complaint says she was “terminated after complaining she was not being paid for all hours worked, was having tips stolen by Simon Chan and protested when Simon Chan requested that she ’pad’ customer bills if he felt the bills were not high enough.”

Singh filed a retort to the allegations of wage theft and bad bookkeeping. He says it’s unusual for employee grievances to circumvent the state’s labor mediation process.

The plaintiffs initially submitted complaints to the California Department of Fair Employment & Housing. But that appeared to be a formality on the path to litigation, as Ludlow, Ho and Davis all received letters from the state on July 8, 2014, notifying them their complaints were closed “because an immediate Right to Sue notice was requested.”

Singh says courts often require employees to seek remedies through the state’s labor commission before filing suit, even if they don’t see the process all the way through. He believed the fact that all three plaintiffs received their “Right to Sue” letters on the same date indicates they planned to take his client to court.

The plaintiffs are seeking an unspecified amount in restitution and compensatory damages, as well as reimbursement of attorney fees. Singh revealed there have been “some very preliminary settlement discussions,” but wouldn’t disclose figures. He says his client has engaged in the talks out of a desire to save money, not guilt. “It’s a business calculus decision.”

Chan told the Sacramento Business Journal he immigrated from China to the U.S. in the early 1970s. After apprenticing under Frank Fats for a decade, he opened Simon’s in 1984. In the ensuing three decades, the Chinese restaurant-cum-saloon has hosted hobnobbing politicians, endured the recession and become an ironic touchstone for current midtown denizens, what with its Maraschino-red booths and cowboy doorman.

While Chan owns the restaurant—and incorporated it in March 2013, according to the complaint—the building in which it operates is owned by the state and managed by the Capitol Area Development Authority. As first reported by The Sacramento Bee, CADA wants to eventually develop the site into apartments. But that hinges on the toxicity of the land beneath Simon’s, and determining that could take years. News of Simon’s possible fate drew an immediate outpouring of local support, including a “Save Simon’s” Facebook page with more than 1,500 followers.

As for the lawsuit, a mandatory settlement conference is scheduled for March. Singh expressed skepticism that the matter would ever see trial, saying judges often encourage the sides to find their own resolution.