Melting Pot employees in Queen Anne say they lost thousands of dollars after the local franchise paid them less than minimum wage despite announcing a surcharge for just that reason. The restaurant's owner denies the lawsuit's claims.
Before you can even pick up your fondue fork at the Melting Pot’s Seattle location, you’ll see a notice from management: Your bill will be 3 to 4 percent higher so the restaurant’s local owner can afford to pay the city’s higher minimum wage.
But according to a new lawsuit filed on behalf of employees, local franchise owner Lane Scelzi and his company were pocketing the extra money from customers and paying workers as little as $11.50, well below the city’s minimum wage, as part of a “systemic abuse of their lowest paid workers.”
The suit, filed in King County Superior Court, seeks class-action status, saying potentially “hundreds” of employees were underpaid at the Lower Queen Anne restaurant, at Mercer Street and Queen Anne Avenue.
“I felt like I was played, like I was taken advantage of,” said Kaitlyn Carlson, a former server at the Melting Pot who left recently and is one of three plaintiffs in the suit. She said the signs informing customers of the minimum-wage surcharge “was just like taunting you.”
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Scelzi had donated $500 to the campaign to repeal the minimum wage increase earlier this decade, though he told diners in a handout placard in 2017 that the surcharge was no political statement, just a way for him to pay his bills.
“We are happy for our dedicated team members, and we are pleased they are able to take advantage of these increases in wages and benefits,” Scelzi wrote in the placard. Another sign notifying diners of the surcharge — first set at 3 percent at the start of 2017, and raised to 4 percent this year — was placed at the host stand.
The suit says the employees were paid $11.50 an hour last year with no medical benefits. Seattle’s minimum wage has been increasing each year since the law first took effect in April 2015. This year, large employers — which includes the Melting Pot, the suit asserts — must pay $16 an hour; last year, it was $15 to $15.45, depending on health benefits. Small companies must now pay $15 an hour without medical benefits; or $12 an hour for workers with health benefits or those who get at least $3 an hour in tips.
Carlson, an 18-year-old Issaquah resident, estimates she was underpaid by at least $4,000 over a year.
“A lot of workers were purely just angry,” she said. The owner “comes in, every couple of weeks, and he’ll just come in and smile at you, and he knows what he’s doing.”
Scelzi, who also owns other Melting Pot locations in the region, did not respond to phone message and emails requesting comment Thursday.
In a legal filing responding to the suit, attorneys for Scelzi denied that employees were paid below minimum wage, but did not elaborate. The filing says “some or all of the claims” are “frivolous and without merit.” It asks a judge to dismiss the case and award him attorney’s fees.
Scelzi’s attorney, Derek Bishop, did not respond to a request for further comment.
The employees’ attorney, Tim Emery of Seattle-based firm Emery Reddy, said he couldn’t yet say how many employees may have been underpaid, or what the total loss in wages might be. Under the law, if wage theft is proven, the workers are entitled to receive double their lost pay, along with attorney fees.
The suit names three employees as plaintiffs: Carlson and two other servers, Renton resident Derek Etter and Seattle resident Nolan Morgan.
“They’re all young, brave and they just want justice for themselves and their co-workers and that’s the reason they sought out help,” Emery said. He noted at least one of the plaintiffs still works at the Melting Pot.
The defendants are Scelzi, as well as the local franchise he controls, called Pacific Northwest Fondue, and his company, Issaquah-based Ministro Management Group, which also had previously owned the Sip restaurant in Issaquah.
Carlson said the Melting Pot did ultimately raise worker wages around November — years after the minimum wage increase took effect — after employees began complaining. She said the raise was presented without any connection to the minimum-wage law, like a random pay bump.
She provided email correspondence with a manager in which she asked about back pay under the law.
“We are reviewing the current minimum-wage law to determine which category we fall under: Small or Large Employer,” the manager, who is not named in the suit, wrote back. “Once we have that confirmed we will inform the staff of pay moving forward. As for now, the rate will stay as is.” Carlson left the restaurant soon after.
City law requires companies to post fliers showing minimum wage rates and information on wage theft on the wall for employees to see, but the suit says the restaurant did not do that, either (which Scelzi’s lawyers also denied). Carlson added some workers had transferred in from other cities — herself from the Bellevue location — where the minimum wage was lower, and may not have realized that they were due more.
Seattle’s city government is supposed to enforce the minimum-wage law through its Office of Labor Standards. The department has launched more than 150 investigations into employers accused of not paying the minimum wage, and recovered about $780,000 for 1,200 workers.
But the office’s investigations are typically sparked by direct complaints. Cynthia Santana, a spokeswoman for the Office of Labor Standards, said the department has no open investigations at the Melting Pot. Emery declined to comment on whether any of the employees had filed a complaint with the city.
The Melting Pot was one of several restaurants to add a minimum-wage-related surcharge after the law was passed — mostly notable Tom Douglas, who started and then immediately repealed a 2 percent surcharge. Others have taken to imposing automatic service charges in lieu of tips, typically 20 percent, though some of those have been repealed, as well.
Laura Mulhern, a spokeswoman for the international fondue chain, said all of its more than 110 locations are independently owned and operated.
“The franchisor is not aware of the pending litigation against our franchise, or whether our franchisee has violated any law,” she said in an email. “However, as part of our franchise agreement with every franchisee, we require and expect our franchisees to follow all laws, including all labor and employment laws.”