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State orders Palo Alto restaurant firm to pay workers millions in back wages

Original post made on Jun 8, 2018

The owners of downtown Palo Alto restaurants Rangoon Ruby and Burma Ruby have been ordered by the state labor commissioner’s office to pay $5 million in wage theft violations for failing to pay hundreds of workers minimum wage, overtime and split shift premiums.

Read the full story here Web Link posted Friday, June 8, 2018, 9:50 AM

Comments (44)

26 people like this
Posted by Anon
a resident of Crescent Park
on Jun 8, 2018 at 10:33 am

Ouch. Hard to see how that won't result in all six of these Lee brothers restaurants going out of business.


70 people like this
Posted by Crescent Park Mom
a resident of Crescent Park
on Jun 8, 2018 at 10:56 am

This is outrageous!! You won’t see my family in any restaurants owned by this family again. The Labor Commissioners Office should look at our nail places next!


56 people like this
Posted by Done with them.
a resident of Duveneck/St. Francis
on Jun 8, 2018 at 11:08 am

Done with them. is a registered user.

That's too bad. I used to like Rangoon. No more. Done with them. Shame on them.


8 people like this
Posted by CrescentParkAnon.
a resident of Crescent Park
on Jun 8, 2018 at 11:52 am

Sure, that's the problem, the workers putting in all kinds of overtime to make this place a success are getting paid so much they are driving the business into the ground. Wow ... wonder why rent hikes never seem to get blamed for restaurant failures even though the majority of what we hear as reasons places are going out of business has to do with unaffordable rents, i.e. Cheesecake House and others reported on here. [Portion removed.]


3 people like this
Posted by CrescentParkAnon.
a resident of Crescent Park
on Jun 8, 2018 at 11:54 am

[Portion removed.]


1 person likes this
Posted by @CrescentParkAnon
a resident of Old Palo Alto
on Jun 8, 2018 at 12:12 pm

Everytime a local restaurant goes out of business, I assume it is because of soaring rents or they lost their lease because the landlord wants to convert to office space.


55 people like this
Posted by tdinovi@yahoo.com
a resident of College Terrace
on Jun 8, 2018 at 12:27 pm

Caught downtown Palo Alto Rangoon Ruby's red-handed at outrageous, blatant wine fraud about a year after they opened. Fobbing off inferior Sauvignon Blanc as Cloudy Bay ... absolutely graceless, offensive handling of the situation by management. Spoiled my birthday lunch. Never went back. Stuff like that usually signals a modus operandi. So glad they finally got nailed. Richly deserved punishment for shady business practices.


8 people like this
Posted by SRE
a resident of Crescent Park
on Jun 8, 2018 at 12:52 pm

@CrescentParkAnon Did you even read the article?

If minimum wage is driving businesses into the ground there is no point being in business in the 1st place.


41 people like this
Posted by Been to Rangoon Ruby
a resident of College Terrace
on Jun 8, 2018 at 1:00 pm

OMG! my mom and I went to eat at Rangoon Ruby before. Everything was expensive and nothing was tasty!!! Service was mediocre. I can't wait to see it closed! How greedy of them to steal their employees' tips. :(


24 people like this
Posted by Zack
a resident of Menlo Park
on Jun 8, 2018 at 1:47 pm

Glad they got caught! Wish it happened sooner.
The Lee's will be ok. They'll just close up the LLC and start a new one.


2 people like this
Posted by Don't Believe Everything You Read
a resident of Stanford
on Jun 8, 2018 at 1:49 pm

[Post removed.]


15 people like this
Posted by Michael Cohen
a resident of Charleston Meadows
on Jun 8, 2018 at 2:09 pm

[Post removed.]


50 people like this
Posted by Pryssila
a resident of Palo Verde
on Jun 8, 2018 at 3:19 pm

I worked for this small family restaurant back when they first opened and I ended up taking them to the labor commission office on my own. After 3 weeks of working I never received a paycheck, tips or anything and that made me take them to court. I had all my times slots on a memo pad that I had bought because the restaurant never gave me a pin to click on or anything which was odd to me so I thought to write down the hours myself. Anyhow long story short, The owner never showed up for the case he sent a regular payed employee to fight the case in which the employee wasn't able to provide any details to anything so I was automatically awarded what I never received. This owner had a extremely bad attitude and glad he's paying for his malpractice if that's what you categorize this. Shame on him for continuing this ABUSE!


55 people like this
Posted by Anthony
a resident of Stanford
on Jun 8, 2018 at 3:39 pm

FYI: John Lee and Max Lee also own the Wahlburgers located on University in Palo Alto. As well as Ella’s American Kitchen in SF. Currently they have sole Franchising rights for Wahlburgers in the Bay Area. Interested to see how this affects that relationship. Needless to say, try deserved what they get, not that the employees affected will see any of that money. They’ll probably just file bankruptcy [portion removed.]


3 people like this
Posted by Tanya
a resident of Menlo Park
on Jun 8, 2018 at 3:44 pm

[Post removed.]


27 people like this
Posted by Sophie
a resident of another community
on Jun 8, 2018 at 4:03 pm

My husband and I used to go to Rangoon Ruby and Burma Ruby often, until we found out they listed employees medical insurance (or something like that) as part of the bill last year. Come on as business owner, you are liable to cover your employees benefit, you can’t transfer those cost to customers, just like if you itemize the furniture, the decoration, the gas range on the bill, no one will accept.


21 people like this
Posted by Anthony
a resident of Stanford
on Jun 8, 2018 at 4:28 pm

In Addition to owning Rangoon Ruby, Burma Ruby, Wahlburgers, Ella’s American Kitchen an the Rail Club in San Carlos....John Lee is also the owner/broker for MRL Group Inc. A commercial and residential real estate company. Web Link


32 people like this
Posted by Stew Pid
a resident of Community Center
on Jun 8, 2018 at 4:40 pm

Totally done with these guys and ALL their businesses.


40 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 8, 2018 at 4:54 pm

"Ouch. Hard to see how that won't result in all six of these Lee brothers restaurants going out of business."

No surprise. Like Trump, the Lee Bros got rich by stiffing the stiffs who worked for them. Like Trump, they'll go bankrupt.


1 person likes this
Posted by Sarah
a resident of Old Palo Alto
on Jun 8, 2018 at 5:04 pm

Question. Are these Lee brothers at all related to Dan Lee who owned Ming’s back in 70’s?


13 people like this
Posted by Me 2
a resident of Old Palo Alto
on Jun 8, 2018 at 5:37 pm

Sophia: "Come on as business owner, you are liable to cover your employees benefit, you can’t transfer those cost to customer"

Wow - someone doesn't know how a business works. *All costs* get transferred to customers, including increased minimum wages and taxes. That's some magical thinking that businesses somehow absorb increased costs in a way that doesn't impact the customer.


Like this comment
Posted by musical
a resident of Palo Verde
on Jun 8, 2018 at 8:17 pm

Hmm. For just the cooks, $3.8M / 87 is over $43,000 each. Servers etc $590,072 / 211 = $2800 average lump sum. Withhold say 20% federal, 6% state, 7.65% FICA, that's more than one third whacked off what workers might think they are getting. Who is stuck for the other 7.65% FICA? Tax collector always wins.


10 people like this
Posted by the_punnisher
a resident of Mountain View
on Jun 9, 2018 at 4:25 pm

the_punnisher is a registered user.

Sigh. This behavior is the reason UNIONS still exist. Collective bargaining still adds to a corruption where every wage slavegets the shaft, but far less of one.

What may happen is the Company files for Chapter 7 bankruptcy, then reopens a s a different company. This has happened for many minimum wage or " salary + tips jobs that are allowed to pay BELOW MINIMUM jobs. Owners just use a tips jar and empty it at night and tips just disappear. I won a Labor Case; he did not even show up to my complaint of " Fired or just laid off " case. He was a player and he liked to show off all the time to his employees. I think I irked him a bit when I showed up to work in a Jaguar. V12 that could scare his customers off. Leaper envy?
This type of setup also was used by the original " Silicon Valley " companies that held many wages down by agreeing to do that ( technically ) in a conspiracy. One of the NON agreement companies would pay me a 30% wager increase just to " walk across the street ". I gave the same offer to my present ( LARGE ) employer to match it. No dice. My new job paid me MORE to work LESS. My rule of thumb: Always keep your resume updated and in public view. Know your Federal labor statistics and the numbers given for full time jobs in the area and how much is the basic salary for your local areas. Prepare to " get real ". No one actually hire at that scale, especially in the SFBA. Or, pack up your possessions and leave.
Right now, many people have started a such a task and M$M has noted this.


EVERYONE plays this game, even with professionals with new degrees or certifications. This behavior has been used for DECADES in the United States.



32 people like this
Posted by Ken
a resident of another community
on Jun 9, 2018 at 11:28 pm

I really liked the menu.
and the waitresses were so nice.

I will never go there or to any of the Lee owned businesses.
Sounds like they took lessons from Trump.

WE NEED UNIONS! to fight this corruption.
and give people fair wages,not to mention just getting paid.

I'm so bummed about this.


36 people like this
Posted by Stephen
a resident of Duveneck/St. Francis
on Jun 9, 2018 at 11:41 pm

They got caught stealing $5 million from their employees - why are they not going to prison for grand larceny?


27 people like this
Posted by Sandra
a resident of another community
on Jun 10, 2018 at 1:21 am

What John Lee has done to the art deco Carlos Club and its' sign is a travesty. He was trying to rip off the letters to spell out the name of his new bar, the Rail. The City stopped that and ordered him to repair the neon tubing he ripped out - they surround the letters that spell CARLOS.

Call the City of San Carlos to put the pressure on Lee to fix what he was supposed to. The Carlos Club is a valuable historic resource for the city. The gorgeous neon sign is one of the most respected and beautiful in the Bay Area.

City of San Carlos
Economic Development Division
600 Elm St.
San Carlos, CA 94070
(650) 802-4263
email@cityofsancarlos.org

You can also write to the Council and the City Manager, Jeff Maltbie.


21 people like this
Posted by Vasche LaMou
a resident of Greenmeadow
on Jun 10, 2018 at 5:11 pm

"They got caught stealing $5 million from their employees - why are they not going to prison for grand larceny?"

Because it's a white collar crime.


20 people like this
Posted by Palo Alto family
a resident of Community Center
on Jun 11, 2018 at 11:21 am

Never returning to Burma Ruby, which we enjoyed as a family for special occasions. Wahlburgers now off our dining out list too. Absolutely disgusted and disappointed.
Curious if anybody knows of local restaurants who are ethical in their treatment of their employees so we can show those doing the right thing support.


14 people like this
Posted by resident
a resident of Downtown North
on Jun 11, 2018 at 11:39 am

The headline to this article is attention grabbing (stealing money from poor immigrants, etc). If you read the details of the article, this is not a criminal theft case. The dispute is not about intentionally stealing money. A large part of the dispute is about how working hours are calculated.

The same thing happened to a good friend of mine who is an American citizen with a white collar job at a large well-known American accounting company. Workloads for many employees at this company varied a lot depending on tax season etc and the government decided that the company was calculating working hours and overtime hours incorrectly and awarded the employees several thousand dollars each, which the company paid.

Without more details on exactly what these restaurants did wrong, I am not going to be so quick to judge as many of the other people commenting here. If the company pays the employees what they are due and the employees are happy, then I will probably be happy to continue patronize them. Boycotting the restaurant is going to hurt the employees as much as the owners.

I'm kind of surprised that this article does not have any comments from either the restaurant owners or any employees.


18 people like this
Posted by Outraged
a resident of Old Palo Alto
on Jun 11, 2018 at 4:43 pm

Outraged is a registered user.

Don't patronize Wahlburgers, Burma Ruby, or Rangoon Ruby, whose owners got caught stealing from their employees. Sadly, no personal liability will probably accrue to either John or Max Lee. They'll probably just fold the individual LLC that owns each restaurant, declare bankruptcy, and stiff their employees yet again.

If the Lee's restaurants go out of business, as they should, their employees will easily find jobs in other Palo Alto restaurants.Palo Alto restaurants are having difficulty hiring employees. Just look at the "Help Wanted" signs at restaurants all over the Peninsula.

Max Lee is apparently the exclusive franchisee for Wahlburgers in our area. Wahlburgers should terminate that franchise immediately because of the unethical, and perhaps criminal, activity of its franchisee.


Like this comment
Posted by GaryB
a resident of Greenmeadow
on Jun 11, 2018 at 9:03 pm

People blame rents for businesses going out of business ... but, if you've run a business, wages dominate. Well, this is especially true at a tech startup where each worker is $200K, but even in a restaurant with minimum wages, workers are about $22K ... by 10 and that's before the owners buy the food and pay themselves. It's a tough business, restaurants, that's why you see so many family members working there at probably way below minimum wages.

It could be they are reaching their limit -- the business simply doesn't work beyond what they were paying. There's a certain limit what you'd pay for a tea leaf salad. If you aren't going for it at 40% increase, don't get tooo moral about it all.


17 people like this
Posted by Outraged
a resident of Old Palo Alto
on Jun 12, 2018 at 8:22 am

Outraged is a registered user.

Is GaryB saying that if a restaurant's business model doesn't work, it's OK to deny employees a portion of their wages? If so that is definitely a very questionable moral position to take.

In the restaurant business the costs are very approximately divided 1/3 for food, 1/3 for wages and the rest for rent, other overhead & profit. So wages are an important factor but not necessarily the dominant factor. But restaurant margins are slim so skimping on wages is one way to improve profitability, especially for non-unionized workers. It's much harder to cheat your food suppliers since they won't put up with it.

There is no excuse for what the Lee's did other than to assume they are greedy.


14 people like this
Posted by Rob
a resident of Atherton
on Jun 13, 2018 at 12:57 pm

My family and I were regulars here. Not anymore...I'll never be back.


5 people like this
Posted by resident
a resident of Downtown North
on Jun 15, 2018 at 4:14 pm

This sort of thing happens a lot in the restaurant business. I just read that the Michelin-star Michael Mina restaurant group is accused of exactly the same labor violations. San Francisco Chronicle news report: Web Link
Apparently, these violations are so common that some lawyers specialize in just restaurant wage cases. The article lists a number of other Bay Area restaurants who are accused of the same violations.


9 people like this
Posted by SJ
a resident of another community
on Jun 19, 2018 at 3:51 am

What the Lees did is nothing new, it is just that most people aren't aware of it and are shocked because they hadn't known about it before. It isn't. It happens more than you think.

And by the way, @resident, this is not a matter of wage miscalculation. You know how everyone likes to leave a tip because they think they're doing a good deed, or because they don't want to look shabby? Restaurant owners like the Lees keep the tip money and use it to pay the workers (e.g., worker works 8 hours...owner pulls money from the tip jar to pay for that 8 hours so they don't have to pay out of their profit and worker does not pocket any of that extra tip money you shelled out). That is not wage miscalculation.

As for health benefits being tacked onto your dining bill, @Sophie, this is what a lot of restaurants in SF do, it is legal and openly accepted. This may have been where the Lees got the idea from, although in light of what we now know, who knows into whose pocket that extra fee money went.

Very glad though the workers had the courage to report this. Oftentimes, they are intimidated by the owners and fear losing their jobs. It just goes to show though that there is no reason to be scared when there are people who will help and back you fight for what's right. So thank you also to Asian Law Caucus and all the other organizations out there fighting for the victims and marginalized.


1 person likes this
Posted by Carol
a resident of Downtown North
on Jun 19, 2018 at 10:46 am

This is why we need to get the Republicans back in power in this state. It’s next to impossible doing business in this state. The Lee’s employee many people, pay them a lot more then minimum wage, give them free rent, and the state fines them $4 million because they paid them salary instead of hourly?! Give me a break!!! Power out of control.


Like this comment
Posted by micheal wu
a resident of Palo Alto Hills
on Jul 7, 2018 at 10:08 pm

the owners should protective for thief


7 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 8, 2018 at 11:08 am

Online Name is a registered user.

So glad the state is finally going after them and all the other restaurants ripping off their workers.


8 people like this
Posted by Chinese
a resident of Another Palo Alto neighborhood
on Jul 8, 2018 at 3:44 pm

This is no surprise. Restaurants often do this, especially restaurants run by non-Caucasian. The immigrants want to leave their countries and are promised jobs but when they arrive, they are slaves to the restaurant.


26 people like this
Posted by MAGA
a resident of another community
on Jul 9, 2018 at 2:31 pm

Look who is accused of ripping off his employees! From USA Today. "President Trump's personal driver for 25 years sues for unpaid overtime wages" Web Link


2 people like this
Posted by Hmmmm
a resident of Barron Park
on Jul 11, 2018 at 9:42 am

1860 Liberals get pissed cause the Republicans were taking away their cheap labor and leave the Union

2018 Liberals come unhinged at the prospects of again loosing their cheap labor. California wants to leave the Union.




2 people like this
Posted by Silent Majority
a resident of Community Center
on Jul 12, 2018 at 12:49 am

Haha, leave it to the liberals to digress to bashing Trump whenever they have an audience, captive or not. I’ll bet my retirement savings that a Dem paid Trump’s personal driver to sue. It could be true that he didn’t pay overtime wages, but he probably gave him a generous monetary gift instead to cover the expense. How interesting that the Clintons are crooked but they get an automatic pass from the liberals. They are definitely unhinged now .


2 people like this
Posted by Silent Majority
a resident of Community Center
on Jul 12, 2018 at 12:49 am

Haha, leave it to the liberals to digress to bashing Trump whenever they have an audience, captive or not. I’ll bet my retirement savings that a Dem paid Trump’s personal driver to sue. It could be true that he didn’t pay overtime wages, but he probably gave him a generous monetary gift instead to cover the expense. How interesting that the Clintons are crooked but they get an automatic pass from the liberals. They are definitely unhinged now .


4 people like this
Posted by Bone-Spur Bozo
a resident of another community
on Jul 12, 2018 at 7:59 am

> I’ll bet my retirement savings that a Dem paid Trump’s personal driver to sue.

Based on the fact that a Conservative cannot do anything unless an outside force brainwashes them?


Sorry, but further commenting on this topic has been closed.

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