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

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.]