Court orders operators of 14 Bay Area Subway locations to pay employees nearly $1M in wages, damages; sell or shut down their businesses

SAN FRANCISCO – The U.S. District Court for the Northern District of California has ordered the owners and operators of 14 Bay Area Subway restaurants to pay employees nearly $1 million in back wages and damages after federal investigators found they directed children as young as 14 and 15 to use dangerous equipment and assigned minors to work hours not permitted by law; failed to pay employees their wages regularly, including by issuing them hundreds of bad checks; and illegally kept tips left by customers. 

In a rare action, the court’s order requires the owners to sell or shut down their businesses by Nov. 27, 2023, a term the department insisted on to resolve the case.

The action comes after the department’s Wage and Hour Division found these and other violations of the Fair Labor Standards Act by John Michael Meza and his wife, Jessica L. Meza, who had franchise agreements with franchisor and operator Doctor’s Associates LLC to operate the restaurants in Antioch, Clayton, Concord, Cotati, Napa, Petaluma, San Pablo, Santa Rosa, Vallejo and Windsor.

Investigators also found the employers interfered with the division’s review by coercing employees not to cooperate and threatening children who raised concerns or tried to exercise their legal rights. The department’s investigation also found that the Mezas’ associate, Hamza “Mike” Ayesh, played a role in these violations, including threatening an employee who complained about receiving a bounced payroll check.

The department obtained a preliminary court injunction on May 19, 2023, forbidding the employers from violating child labor laws, threatening and retaliating against workers and obstructing a federal investigation. 

On Sept. 27, 2023, the department obtained a consent judgment and permanent injunction that orders the Mezas to pay 184 workers $475,000 in minimum wage, overtime and tips and an equal amount in liquidated damages. The court also ordered them to pay $150,000 in penalties. The Mezas and Ayesh will also have to pay $12,000 in punitive damages for their retaliatory conduct. 

“Thanks to some very brave young people who stood up to their employers’ exploitation and attempts to intimidate them, the Department of Labor and a federal court are holding these business owners accountable,” said Wage and Hour Regional Administrator Ruben Rosalez in San Francisco. “With the combined efforts of Wage and Hour Division investigators and the department’s Office of the Solicitor, these employers are facing the consequences for endangering the safety and well-being of children and violating federal law.” 

In June 2023, Doctor’s Associates notified the Mezas that it knew of the department’s litigation and that the Mezas continued to violate federal law. Regardless, Doctor’s Associates allowed the Mezas to continue operating their Subway franchises. 

“The contempt employers showed for their workers’ safety, dignity and rights cost them the businesses they hoped to build and brought significant financial consequences,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “This case sends a clear message to others who — despite ongoing litigation and a preliminary injunction — continue their wage theft that the department will use the tools at its disposal to end their illegal practices.” 

The investigation and litigation include the following 14 Subway franchise locations:

The Wage and Hour Division provides many resources to help employers comply with child labor laws. Its YouthRules! initiative promotes positive and safe work experiences for teens by providing information about protections for young workers to youth, parents, employers and educators. Through this initiative, the U.S. Department of Labor and its partners promote developmental work experiences that help prepare young workers to enter the workforce. The division has also published Seven Child Labor Best Practices for Employers to help employers comply with the law.

The FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek. Learn more about the Wage and Hour Division and workers’ rights, including a search tool to use if you think you may be owed back wages collected by the division.

Employers and workers can call division staff confidentially with questions, regardless of where they are from, and the department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Download the agency’s new, free Timesheet App for Android and iOS devices, available in English and Spanish, to help track work hours and pay.

Julie A. Su, acting Secretary of Labor, U.S. Department of Labor vs. John Michael Meza, Jessica Leyva Meza, Hamza Ayesh, MZS Enterprises LLC, Crave Brands LLC 

Civil Action No. 3:23-cv-01714