Employees have filed multiple lawsuits against Kreation, and across these suits, failure to pay overtime is the most common complaint. But Kreation employees also allege they weren’t paid for missed breaks, didn’t get paid sick time, and, in one case, were harassed and threatened at knifepoint on the job for being gay.
In an email statement to BuzzFeed News, Kreation founder Marjan Sarshar wrote, “Kreation, as a team, values our employees as our family. We value all people from all walks of life, and we give all employees the opportunity to grow within the company. Kreation is aware of the Kaputsos lawsuit—a lawsuit titled a class action, but filed by one former employee claiming to act on behalf of others he does not represent. Those issues will be tried and decided in court later, where Kreation will continue to defend against the claims. In the meantime, as always, Kreation will continue to ensure its employees are treated justly and fairly.”
Asked to elaborate on specific allegations made by current and former employees, especially pertaining to missed overtime pay, Sarshar declined to comment further.
In December 2016, a Kreation employee named Marshall Kaputsos, who worked as a host and server in-store at various Kreation locations, filed a class-action lawsuit against the company, as well as Sarshar, and her business partner, Farzin Madjidi. In the suit, which is currently pending in LA County Superior Court, Kaputsos says he’s seeking back wages for unpaid overtime (he alleges he sometimes worked more than 14 hours a day), uncompensated breaks, and unpaid sick time.
According to Kaputsos’s lawsuit, Sarshar used Kreation’s multiple business locations to conceal the fact that Kaputsos was working overtime and to avoid having to pay higher wages in accordance with California law. From the suit:
For example, during the pay period starting May 9, 2016 and ending May 22, 2016, Plaintiff received one paycheck from “Kreation Organics Inc.” to compensate him for 80 hours of work at his base rate of pay, which was $10/hour (minimum wage). For the exact same pay period, Plaintiff received another paycheck from “Kreation & 1023 Montana Inc.” to compensate him for an additional 9.27 hours of work at $10/hour. Even though the pay stubs plainly show that Plaintiff worked at least 9.27 hours of overtime during this pay period, there is no overtime compensation reflected on either pay stub.
Kaputsos also alleges that he was asked to stay at Kreation locations until 2 or 3 a.m. preparing for pest exterminators, and that on the occasion of one cockroach infestation, Kreation “required servers to stay late and deep clean the restaurant” but never paid them. The potential class, which hasn’t yet been certified by a judge, is estimated to be more than 200 individuals.
According to court filings, Kaputsos's and Kreation’s lawyers attempted to reach a settlement agreement via mediation over the summer. But last week, Kaputsos’s lawyers filed an amended complaint, moving ahead toward a trial. The next hearing in the suit is scheduled for December.
“I never got paid overtime,” a former Kreation employee who is not involved in any legal action against Kreation, and asked to remain anonymous, told BuzzFeed News via private message. “I got those hours on a separate check from the juicery, which, I never worked there. I only worked in the restaurant. So when I would do overtime I got to [sic] separate checks one for 80 hrs and another one for the overtime hrs at same minimum wage.”
A second anonymous employee gave a similar account, telling BuzzFeed News, “There are a lot of people who do work overtime, but they just pay them two different checks instead of overtime and change the location of the store.”
Other workers have filed suit against Kreation independently. Donnie Ramos, who used the same law firm as Kaputsos did, filed his suit in March this year. In his complaint, Ramos says he repeatedly brought up the issue of overtime pay with his supervisors at Kreation, but never received any. His suit alleges the same multi-address pay stub scheme that Kaputsos’s describes.
But according to his lawsuit, Ramos’s real problems at work started when a kitchen supervisor started harassing him for being gay. Ramos alleges that the harassment took place over a seven-month period, beginning with name-calling (“faggot,” “fucking puto,” etc), escalating to aggression (“Panchito whipped him with a wet towel on his buttocks”), and then, allegedly, assault. From the lawsuit:
On Saturday, November 5, 2016, Mr. Ramos was in the kitchen with Panchito and another cook. Panchito looked at Mr. Ramos and said aggressively, “What do you want, puta?” Before Mr. Ramos could respond, Panchito grabbed a chef’s knife with a long blade and held it out threateningly towards Mr. Ramos. He said, “Get the fuck out of here, I am going to kill you because you are a faggot,” or words to that effect.
Ramos says he reported his coworker’s harassment and threats of violence to his supervisors at Kreation multiple times between February and November, but they didn’t take action. Following the knife-wielding incident in November 2016, Ramos says Kreation fired him (his suit includes a wrongful termination claim). According to his lawsuit, Ramos picked up a knife in self-defense during the altercation; Kreation later filed a petition for a restraining order against him, which was dismissed. Ramos’s own suit, which claims he experienced harassment in a hostile work environment and discrimination based on sexual orientation, in addition to lost pay and wrongful termination, is pending in LA County Superior Court.
In June, Kreation’s lawyers filed an answer to Ramos’s complaint, in which they denied “each and every allegation” he made against the company. His trial is currently scheduled for February.
Other workers have also sued the company in the past. An employee named Juan Romero filed a suit against Kreation in 2014, alleging that he wasn’t paid overtime, despite working for Kreation between 60 and 70 hours a week. That case was dismissed by request of the worker’s attorneys in August 2015.
Marjan Sarshar, who says she started the Kreation brand with a Santa Monica café in 2007, has faced legal troubles before. Her financial backer, Farzin Madjidi, filed suit against her in November 2016, alleging that she had duped him, using a secondary company, Bebegol Inc., to cut him out of the business. He says they’d agreed to split the profits from any Kreation stores or projects he helped fund 50-50. Sarshar filed a countercomplaint vehemently denying these allegations in April. The trial is currently scheduled for February.
In 2005, Sarshar and her husband were arrested following a police investigation into an LA opium ring; Sarshar’s husband, Mehrdad Lari, who was allegedly the “boss” of the ring, pleaded guilty to some charges and was sentenced to four years in prison. Sarshar was not charged.
Despite these struggles, Sarshar has successfully built Kreation into a popular brand in LA. Celebrities are frequently photographed holding or buying Kreation products; some tweet about how much they like them. Kreation was even highlighted on Gwyneth Paltrow’s lifestyle website, Goop.
Caroline O'Donovan is a senior technology reporter for BuzzFeed News and is based in San Francisco.
Contact Caroline O'Donovan at email@example.com.
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