San Diego County sues supermarket sushi chains

The county claims the sushi companies misclassify their sushi chefs as independent contractor “franchisees” rather than employees. Shutterstock

The San Diego County Office of Labor Standards and Enforcement has sued five companies that operate sushi franchises inside supermarkets, accusing them of exploiting workers and violating state labor laws.

The suit accuses these firms of staffing grocery stores with sushi chefs who often work 50-70 hours per week but take home very little money after the firms collect multiple fees from the chefs. These include not only franchising fees but payments for equipment rental, financing charges, minimum ingredient purchasing requirements and other costs.

The suit names Ace Sushi Franchise Corp. (and its parent company, Asiana Management Group), Advanced Fresh Concepts Franchise Corp. and FujiSan Franchising (and related entity Fuji Food Products), which run branded sushi counters inside grocery stores in California.

The county claims the sushi companies misclassify their sushi chefs as independent contractor “franchisees” rather than employees, which enables the companies to avoid the costs of complying with state labor laws. The companies have avoided paying state and local minimum wages, overtime, paid sick leave, workers’ compensation coverage, reimbursable business expenses, unemployment insurance and providing meal and rest breaks, the lawsuit alleges.

“These ‘franchises’ are truly sham arrangements under which sushi chefs pay to work while defendants evade numerous labor laws,” the suit alleges.

Under California law, companies are presumed to have an employer-employee relationship with the people that they hire unless the hiring companies can prove they are independent contractors, according to the suit. Independent contractors must be “free from the control and direction” of the companies, among other criteria, in order to be classified as independent contractors.

Because the sushi companies contract directly with the supermarkets, they effectively control the locations, and the individual sushi chefs are required to fulfill the terms of the contract obligations, the lawsuit states.

The suit, filed in San Diego County Superior Court, seeks relief in the form of unpaid wages, liquidated damages, restitution, civil penalties and other costs.