As labor investigations into the Lemongrass Grill restaurant chain continue, locals may find that the pad thai they order from the recently renamed uptown location may come at a hefty price.
Earlier this summer, the New York attorney general’s office filed a verified petition against the Liberty Thai Corporation, which operates the Lemongrass Grill in the Financial District and another on the Upper West Side. The company is believed to owe $1 million in unpaid wages and damages to its employees.
Liberty Thai’s uptown restaurant at 95th Street and Broadway was not cited in the lawsuit, but recently expanded its menu and changed its name to Long Grain Thai & Japanese. “We added Japanese food to attract more customers,” said Steve Tham, manager at Long Grain. “Our business was going down, so we had to make a change.”
Tham indicated that the name change was part of an effort to disassociate the uptown restaurant from its downtown relative, which is currently under investigation. “The other one might change later, but we changed first,” Tham said. “It depends on management.”
Labor experts who were not directly involved in the case were suspicious of the name change. “Name changes can be a superficial ploy, if there is no major change in management and it retains some or most of the old employees,” said Jackson Chin, associate counsel for LatinoJustice Puerto Rican Legal Defense and Education Fund, a legal firm. “Or it can signify the existence of a new corporate business entity.”
According to Chin, these name changes not only demonstrate employers’ efforts to distance themselves from ongoing lawsuits, but in some cases, they can also be an indication of potential bankruptcy.
“Most restaurants use sophisticated methods,” he said—maybe to avoid outstanding creditors and liabilities, to receive tax breaks, or both.”
As part of its investigation, the attorney general’s office is looking into the employment and wage records of both the downtown Lemongrass Grill and Long Grain restaurants.
According to the attorney general, Liberty Thai’s owner Hann Low knowingly paid employees at his downtown restaurant less than the minimum wage, without overtime compensation, and failed to keep proper employment records as required by law. Employees worked 12-hour days up to six days a week for only $25 a day. This translates to an extremely low hourly rate of $2.08 per hour.
“Lemongrass Grill is the latest employer this office is holding accountable for cheating hardworking New Yorkers out of fair pay,” Attorney General Andrew Cuomo said in a statement. “Such blatant violations of New York’s labor laws come with a price.”
It is uncertain at this time if Low has sought legal counsel or if Liberty Thai Corporation will be filing for bankruptcy. Low did not return repeated phone calls.
In the past year, the attorney general has prosecuted several major labor claims in the food industry, including cases against Saigon Grill, Associated Supermarkets, and Tsu Yue Wang, the owner of Tomo Sushi & Sake Bar and eight Ollie’s restaurants, who paid a record settlement of $2.3 million to his employees.
But despite recent success in prosecuting labor violations, the attorney general and advocacy groups still face challenges in getting employees to speak up about unfair practices.
“Sometimes workers feel more comfortable coming forward to community groups than they do the [New York State] Department of Labor,” Michelle Duffy, a spokeswoman for the department, said. “It’s better if they come forward and fight for their wages owed, but some fear retribution or retaliation.”
The Spanish-speaking complainants, who worked as deliverers for the Financial District’s Lemongrass Grill, did in fact come directly to the labor bureau of the attorney general’s office.
JoAnn Lum, director of the National Mobilization Against SweatShops, said that, although workers often fear retribution from their employers, there is an even greater problem with New York state’s labor legislation.
“[New York’s] employers sanction provision makes it illegal for employers to hire workers without papers. This creates an underclass of workers without documents, who are treated as criminals without any rights,” Lum said. “This weakens the ability of workers to organize and stand up, because it divides them. It’s a modern day slave law.”
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