Former employee: Wage laws ‘had nothing to do with bankruptcy’ of Seattle restaurant chain

Jul 9, 2019, 1:08 PM | Updated: 1:51 pm

Seattle restaurant chain Henry's Tavern...

Henry's Tavern is one of a handful of locations run by Restaurants Unlimited. (Victor Chapa, Flickr Creative Commons)

A Seattle restaurant chain is claiming that “progressive wage laws” and increasing minimum wages led to a recent declaration of bankruptcy. According to one former employee, however, that may not be the case.

A recipe for a shortage of Seattle cooks

The company, Restaurants Unlimited, features numerous locations spread across Washington, Oregon, California, Minnesota, Colorado, and Alaska. Minimum wages vary in each state, from $9.86 an hour in Minnesota, to $15 in Seattle for companies with more than 500 employees.

That being so, Chief Restructuring Officer David Bagley told The Seattle Times that “the company’s profitability has been significantly impacted by progressive wage laws along the Pacific coast that have increased the minimum wage.”

That’s a claim an anonymous former employee calls into question.

“Wage laws had nothing to do with the bankruptcy,” they told MyNorthwest. “The company is stretched across the country with varying wage costs — that couldn’t possibly be a significant factor.”

The employee contends that a handful of less successful locations were responsible for sinking Restaurants Unlimited, that manages the likes of Henry’s Tavern, Stanford’s, Palomino, and more.

Amato: Understaffed Seattle restaurants don’t tell the whole story

“The simple fact is that the company, as all large restaurant companies do, was unable to provide a consistent product and service,” they said. “Some restaurant soared, while others sank with concrete boots. The latter bloated company-wide costs and dragged the other brands down. Failure to recognize that in time is almost certainly what dragged the company under.”

According to the Times, the company was looking to sell itself as recently as 2016, later failing to refinance a debt load in the tens of millions. Court documents state that it will be operate during bankruptcy on the strength of a $10 million loan, with just $150,000 of cash on-hand.

Restaurants Unlimited currently has almost 1,900 part-time employees, 168 full-time restaurant staff, and 50 salaried workers at its Seattle headquarters.

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Former employee: Wage laws ‘had nothing to do with bankruptcy’ of Seattle restaurant chain