A once-prolific but now much-reduced Northwest restaurant chain is the focus of two class-action lawsuits involving former employees as well as job applicants.
The corporate entities tied to ownership of Shari's Cafe & Pies, with just a handful of locations remaining, are the focus of the two cases, one filed in Washington state and the other in Oregon.
The Washington case involves allegations of past job postings that ran afoul of salary and benefits information requirements, while the Oregon case is tied to the sudden layoffs and closures of Shari's Oregon properties.
Attempts to reach Shari's corporate legal department for comment on the cases were unsuccessful. An auto-reply generated by the email listed in its corporate filings with Washington state noted the recipient was "no longer at the company" and referred inquiries to other unrelated departments.
Oregon lawsuit
The most recent of the two lawsuits was filed in November against Shari's Management Corporation, Gather Holdings, LLC, and Gather Holdings Guarantee, LLC, following the mass closing of the Oregon restaurants in October.
The case, filed by attorneys for former Shari's employee Heidi Woebbeking of Portland, contends she was "terminated without cause and did not receive 60 days' notice of her termination."
At the time of her employment, she was working at the chain's Grant's Pass restaurant.
"On or about October 20, 2024, Defendants unceremoniously informed all employees (including Woebbeking) at her restaurant, that their jobs would be immediately terminated as of that same day," the filing states.
"Defendants not only failed to provide any advance notice, but they also failed to pay out the full amount of (Woebbeking's) and the putative class's final paychecks," according to the filing.
The lawsuit contends that the chain violated terms of the federal Worker Adjustment and Retraining Notification Act, which requires employers to give a 60-day notice to affected employees as well as state and local representatives "prior to a plant closing or mass layoff," as described at the state's WARN Act Notifications site online.
According to the lawsuit, the layoffs affected "at least 50 employees," though it is unclear the total number of workers who lost jobs.
The lawsuit seeks to cover all Shari's employees terminated in a span of three months.
"Within 90 days of October 20, 2024, upon information and belief, Defendants abruptly terminated employees across all locations in Oregon, unilaterally and without proper notice to employees or staff, terminating over 50 employees and at least 33% of active full-time employees, including Plaintiff," it states.
The lawsuit calls for "back pay to the fullest extent permitted by the WARN Act" along with compensation for lost benefits as well as litigation costs and attorney fees and seeks a jury trial.
Woebbeking's attorney did not respond to a News Tribune request for comment on the case.
The Oregon closures as previously reported appeared to be tied to debt owed the Oregon Lottery for video lottery-gaming machines, which had been an extra revenue stream at its restaurants in that state.
Melanie Mesaros, media representative for the Oregon Lottery, told The News Tribune this week in response to questions, "No payments have been made. The outstanding debt amount is the same as what we previously shared: $905,164.67."
The closures marked an end of an era for the chain that originally launched in 1978 in Hermiston, Oregon. At the time of the closures, Shari's had 42 sites remaining in the state.
Washington lawsuit
A separate class-action lawsuit against Shari's Management Corp. and 10 unidentified parties was filed June 14 in Pierce County Superior Court, later removed to federal court.
In that case, Mary Turner of Puyallup and Tyler Crutchfield of Olympia contend that Shari's violated regulations regarding the state's wage-transparency requirements.
Turner applied for work in February 2024 and Crutchfield applied in April, according to the initial filing.
The complaint contends the parent company engaged in "a systematic scheme of failing to include the wage scale, salary range, and/or a general description of all benefits and other compensation to be offered in job openings," going back to January 2023.
That's when new regulations took effect in Washington state regarding the disclosure of salary and benefits information required in employment listings for employers with 15 or more workers.
"Plaintiffs applied for the jobs in good faith with the genuine intent of gaining employment and, as such, became personally exposed to risk of harm caused by Defendant's violations," the filing states.
"Plaintiffs seek to represent a class of all individuals who, from January 1, 2023 through the present applied for a job in the State of Washington with Defendant, where the job posting did not disclose the wage scale or salary range for the position."
The lawsuit in July was removed to the U.S. District Court for the Western District of Washington at Tacoma.
In a response to the complaint filed in July, attorneys representing Shari's Management issued a general denial off all listed allegations in the complaint, argued against the case's merits as a class action, and stated, among other defenses, that "Plaintiffs have failed to state a claim for which relief can be granted. Plaintiffs lack standing as they have not suffered an injury-in-fact."
On Nov. 26, the attorneys for Shari's Management Corp. filed a motion to withdraw from the case, "due to a substantial open balance," owed to the law firm.
"Defendant is unable to continue paying for legal representation in defense of the claims," the filing stated, adding that there would be plenty of time to retain new counsel before the start of private mediation, "currently scheduled for January 9."
It noted that Shari's Management also was advised "that if no new counsel were engaged to enter an appearance, the Court may enter a default judgment on any claims Plaintiffs have against Defendant."
As reported in September by The News Tribune, the restaurant chain's corporate ownership has faced delinquent tax debt with the states of Washington and Idaho as well as numerous eviction notices and debt collection cases, including in Pierce County, over unpaid rent.
Mikhail Carpenter, communications manager with the Washington State Department of Revenue, told The News Tribune on Tuesday that there have been no additional tax warrants issued against Shari's, but also no payoffs on existing warrants with the state.
News Tribune archives contributed to this report.
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