‘I Am Closing:’ Cafe Gratitude Owners Will Shut Down Rather Than Fight Lawsuits

Cafe Gratitude in the Mission. (Photo by: Frank Gruber/Flickr)
Cafe Gratitude in the Mission. (Photo by: Frank Gruber/Flickr)

UPDATE: SFWeekly reports that the Santa Cruz location may be staying open

Since word first came yesterday that the popular vegan restaurant Cafe Gratitude was closing its seven Northern California locations, the story has gotten stranger and stranger.

Co-owner Terces Engelhart posted this message on her Facebook page, saying “aggressive lawsuits” were forcing the chain to close:

We were happy to tolerate low margins and sustain ourselves on the transformation and personal growth of our people, while providing local organic vegan food to our community in an atmosphere of unconditional love. That commitment is under attack and we are not able to weather this storm.

Despite the talk about unconditional love, the Facebook announcement and the SFist piece was apparently the first employees heard that they’d be out of work shortly. Engelhart’s husband, Matthew Engelhart, has said that with the exception of their LA restaurant, all of the Cafe Gratitudes, which employ about 200 people, will close.

The Bay Citizen talked to a lawyer representing the two employees who are suing. He says their combined claims are less than $200,000:

[Sarah Stevens] alleges in her suit that she was not given legally mandated breaks and that a tip-pooling practice robbed her of the bulk of her tips earned during server shifts. [Ravi Shankar]’s [Note: Not that Ravi Shankar] lawsuit alleges that he was paid as a salaried employee, when he should have been paid as an hourly employee, and as a result he is owed overtime pay.

The article goes on to say “the company is also the subject of a lawsuit stemming from allegations of violations of the Americans With Disabilities Act.”

The employees’ lawyer told GrubStreet there’s something else going on:

Sommers points out that while crying poverty, Café Gratitude has brought on one of the biggest and priciest labor-defense firms in the country, Littler Mendelssohn, and if this were any normal labor dispute that firm would not likely be advising them to close their whole operation over a mere $200,000.

This isn’t the first time Cafe Gratitude has been in the media on a less than sweet note. Over two years ago the East Bay Express ran a piece charging the owners encouraged employees – and required management – to attend a $500, controversial training program called Landmark Forum.

It’s an oddly polarizing ending for what seems to have been a polarizing place all along. According to the owners, the legions of fans of the food have about three to six months left before any locations close.

[Editor’s Note: This post was re-edited to more accurately describe an Aug. 5, 2009, East Bay Express feature story on Café Gratitude.]

  • http://www.facebook.com/cheyennebarr Cheyenne Barr

    As an actual employee of Cafe Gratitude, having worked for this company for five years, and having experienced the practices and mission of Cafe Gratitude in it’s actually I would love to be heard.  Negativity breeds negativity and everyone is looking for something to be a victim of, or someone/something to blame.  Let me assure all readers that Cafe Gratitude is of the highest integrity and has the highest generosity of any employer I have ever worked for and is the most compassionate and truly wonderful company that I have ever come across.
    Cafe Gratitude is a radical company that actually cares about all workers and created a context for all employees to share tips– a revolutionary way to distribute the wealth that recognizes the work and impact of all workers in the kitchen.  Because every item on the menu is made from scratch, that means that your pizza bread actually took 48 hours to make, not kidding.  That’s 48 hours of someone in the kitchen’s time.  The tips are shared to recognize that.  I am grateful for a company that addresses the inequalities in the mainstream restaurant structures, and dared to break the norm on several accounts, to HELP employees and to revolutionize food, workers rights, and capitalism.  I fully stand behind the owners as they are nothing but the kindest, most generous people, and they have put their money, their hearts, their land on the line.  So much so that they don’t even have a home on their property and live in a yurt.  THERE IS NO PILE OF MONEY SITTING ANYWHERE.  Every dollar went either to employees, our training, our health, our wages or farmers and local businesses with their integrous groundbreaking products, or they lowered the prices to make the food more affordable.  There is no profit, nothing hiding.  The owners have given this community their all.
    This job has changed my life.  This community has healed countless people around me both in body (cancer, MS, diabetes, depression and so much more) and soul (reuniting with parents, healing heartbreak wounds, inspiring the creation of countless other companies and organizations…).  
    What I can tell you is what is true for me, and true for hundreds of employees that work with this company, which is that we are deeply saddened by this news, and only wish that their 8 years of free Thanksgiving meals, 37,000+ annual organic meals given by donation, flexible healthcare and personal coaching/counseling is celebrated by the general community and news sources.  
    Local farmers that depend on us, employees who call this home, customers who couldn’t afford healthy food until the “Grateful Bowl” came… we are all feeling a lot of loss and heartbreak.  Please everyone, be mindful and respectful of the impact of your words.  I request that readers and critics take a hard look and recognize that they don’t actually know the facts, so please be humble in your “knowing” of how it is.

    Employee quotes just today and yesterday as the news hit:

    “Thank you for the amazing leaders you are for our community. We are forever changed.” – M.V.
    “Thank you for being a beautiful strong elder for me to respect and love! Thank you for the gifts of wisdom, time, and words you have shared with me, you make a difference in my life every day. I am so grateful that your crazy cafe project was so succesful for so long and that it awakened so many people to share their gifts. ” -H.M.M
    “I am very saddened by the news, it’s almost impossible to believe that something so good be done this way. I am grateful for these 5 years of working with you, I and my family are very grateful to you by CAFE GRATITUDE” -L.S.
    “M & T, we love you and what you’ve gifted us SO much and are SO VERY grateful at the miracle of getting to be a part of your vision which is only getting more bright and living in more hearts every day. Thank you for daring to LOVE so big that you’ve caused a revolution!” -Y.J.
    “I hope that Cafe Gratitude employees come together and buy each location and keep it as beautiful in spirit, mission, and quality!” – S.S.B.
    “I just want you and Matthew to know how grateful I am that I had an opportunity to be a Gratitude employee and to receive so many generous gifts and transformational opportunities. You guys created something the world has never seen and I hope you continue to share this with the world! I would happily stand up in court for you guys! Sending my love, gratitude, and appreciate for all you do!” -A.W.
    “Your cafes have made such a huge impact on my life. The friends, support, love and of course good food I’ve experienced have been more than I can say in words. Just know that you have made a giant contribution to my happiness and well being, and that I love you!” -E.L.
    “The past 7 years, at Cafe Gratitude, have been the best of my life. I got my sobriety. I stepped onto my spiritual path. I met my father after 31 years. I found my life partner. I have loving relationships with my ex’s and all of my family members. I could go on and on and on! None of this would have been possible without the gift of GRATITUDE!” -B.S.
    “Thank you for providing me the space, community, food, encouragement and imagination to create my life is the best ever! Thank you for helping me let that cancer leave my body. Thank you for supporting me in seeing how beautiful my family, friends and myself are. Thank you for EVERYTHING. I love you endlessly.” -C.M.

    • Taffygrrl

      Huh. So you’re copy-pasting this on SFist and who knows what other blogs. Actual employee, or owner posing as employee to try to whitewash things?

      • http://www.facebook.com/cheyennebarr Cheyenne Barr

        I came to Cafe Gratitude for a part time job while attending SFSU for my Masters degree.  I’ve since graduated and fallen in love with this place, now working full time and planned on spending another 5 years here to learn more and get trained in leadership tools that I so admire.  I am a real person, and these quoted people are my friends, who I have worked with.  I am re-posting this because I am frustrated by the gossip, hatred and assumptions of all of these articles.

        • Glibglub

          haha cultist!

    • guest

      Generally speaking, preparing food is part of a chef’s job. If that job is labor intensive, the owners need to pay that chef more, even if that means raising prices on your menu. It isn’t fair to take money AWAY from servers in order to compenate chefs. Now, if you decide to pay the servers a larger base wage and then pool tips in that fashion, that’s one thing, but is that what happened?

      This is one of the problems with tipping. I tend to tip based on the service, not the food. So i could have a lousy meal but a good server, and she gets a good tip. Thus, it is unfair for the chef, who did a poor job, to share in that tip. Other people may take the meal into account.  Sadly, there isn’t much consistency.

      • guest

        FYI, when you use words like “beautiful strong elder,” it really does sound like a cult.

  • FormerManager

    Try this one on for size. Years ago Cafe Gratitude’s managers received $16- $18/hr.  and paid vacations. Then the paid vacations went away because the company could no longer afford it. We opened another restaurant. After years of service many of the managers voiced we’d like to be paid more. The company said they couldn’t afford it. They opened another restaurant. And then they came up with a solution. Our titles changed, we were called shift leaders, our hourly wage dropped to $11-$13/ hr. and we were thrown in the tip pool (thus taking more from our servers). Now we made more. They opened another restaurant.  The vote they speak of when “we the workers voted to tip pool” went like this. Keep things the way they are or lose your benefits and reduce your wages. Not a very powerful choice. Eventually, I got fed up and quit. In the beginning CG was an amazing place to work, but as we expanded many employees felt less like we were being taken care of. They always taught us to live in integrity. Of coarse no one does it all the time. The lesson was when it was broken, take responsibility and clean it up. I see now their version of cleaning it up is blaming the plaintiffs, the lawyers and closing down. Who is responsible for putting over 200 employees out of work? It is a choice they are making to close. They will expand in LA, where they don’t tip pool. That location sells $12k a day and yes like every other restaurant, it pays it’s back of the house minimum wage. Apparently, Sacred Commerce is practiced differently in Southern California.

  • Anonymous

    A bunch of vegan liberals getting hit by government regulations and trial lawyers.  I believe that’s called karma.

  • Sibyl3

    It is sad that companies use these ridiculous employment practices on low-income earners. I have worked in many places that showed just as little respect for their employees and it is really sad to have this type of practice associated with a raw-food-related business. Sounds like these locations deserver to be closed to me, so they can make way for more honorable business people. Also, finding out you are losing your job on Facebook is about as lame a way to be fired as I can imagine. These owners need to grow up and stop treating the people who have helped them become a success, like expendable commodities. Really pathetic.

Author

Rachel Dornhelm

Rachel Dornhelm has worked as a reporter, editor and producer in public radio for the last twelve years. She got her start in New York City at WNYC and went on to work with the national business program Marketplace, WBUR’s “On Point” and KQED News in San Francisco. Her work has been honored by the LA Press Club and the SF-Peninsula Press Club.

Rachel has a BA with honors in anthropology from Rice University and did graduate work at NYU.

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