Restaurant News

Ruggles Waitstaff Stages Walk-Out, Alleging Non-Payment of Tips: UPDATE

Update: Bruce Molzan says that he has "three auditors" and a new manager going through files and payroll records as of today, admitting that Ruggles does owe the waitstaff back wages. "It's about $14,000 or $15,000 to catch everybody up," Molzan said. "This whole thing has just been blown out of proportion. I understand everyone being upset and wanting to get paid. It just happens, I guess." Molzan claims that he is working on getting Jeremiah Villarreal and the other waitstaff paid "today."

This past Saturday night at Ruggles was a busy one. There were nearly 200 customers packing the restaurant at Westheimer and Montrose, with a skeleton crew of only five waiters out of a normal 10-man crew. And at 7 p.m., all five of those waiters -- as well as Ruggles's general manager -- walked out, closing the restaurant behind them.

"We told the customers there was a gas leak," said Jeremiah Villarreal, 28, a University of Houston sports medicine student who had been a waiter at Ruggles since June.

Villarreal, his GM and his co-workers called the customers who had reservations for the evening to inform them that the restaurant would be closed unexpectedly, hung a sign on the door and left chef and owner Bruce Molzan with an empty restaurant and only four employees. All five waiters and the general manager submitted their resignations that night as well.

Villarreal and his fellow waitstaff allege that Molzan hasn't paid them their tips in nearly a year. Prior to the walk-out, Villarreal and his co-workers filed a claim with the Texas Workforce Commission, claiming that they're owed thousands of dollars in back wages. In a statement to the Chronicle today, Molzan claimed that "he was not in charge of the tip payments, but is working to get checks out as soon as possible."

However, this differs from the statement Molzan made to the Houston Press just last week, when contacted about Villarreal's claims of non-payment.

"Those are just people that are disgruntled," said Molzan, when contacted by phone. "We are paying people. We are keeping up with stuff. There's not a single person that's owed over $1,000."

This is untrue, says Villarreal: "I have maxed out my credit cards and have used up my entire savings to pay my bills in the meantime."

"I have no more money, and I'm now dealing with late fees and several overdraft fees. I'm worried my utilities will be cut off soon. I'm not the only person in this situation, I'm actually the one on staff who might be suffering the least."

Villarreal says that in the six months he worked for Ruggles, he never once received a standard payroll check. Instead, he alleges, Molzan paid his workers with personal checks -- a claim backed up by Ruggles's general manager, who asked not to be identified by name. And even when the waitstaff received personal checks for the money they were owed, Villarreal says, they were few and far between.

When Villarreal first started waiting tables ten years ago, it was common for waiters to get a $0 paycheck: Taxes were deducted from the few credit card tips they received, which were paid to them via check every week or two weeks. This is no longer the case, with nearly all tips left via credit card.

"I didn't get my first check for a month and a half," said Villarreal. "And it was only $165." That $165 was far less than the estimated $500 Villarreal claims to get in credit card tips each week, tips he says rarely show up on his paychecks. To date, he has only received $2,200 in six months of waiting tables.

It's increasingly rare for customers to leave cash tips, especially at upscale restaurants such as Ruggles, where a plate of steak Diane is $33. Said Molzan just last week: "Most of our sales are credit card sales," he said. "Maybe 85 percent of our sales are credit cards."

Villarreal estimates it at slightly more: "90 to 95 percent of all tips" are left on credit card receipts at Ruggles, he said. The rare instances in which he received a cash tip, he said, he was forced to hand it over to Molzan at the end of the evening.

"[Molzan's] personal checks didn't show our hourly wages," he said. Neither did the checks show any credit card tips, nor were Social Security taxes deducted from them, Villarreal said. The Texas Minimum Wage Act (Sec. 62.003) requires employers to provide an earnings statement to their employees, including hours worked, rate of pay and total amount of pay for the period.

The situation escalated in recent months, when Molzan repeatedly took trips and flaunted new purchases in front of his employees -- "On Facebook, his wife posts pictures of their extravagant Thanksgiving feast, when several of us couldn't even prepare a feast for Thanksgiving because we haven't been paid," said Villarreal -- despite telling his waitstaff that he was having cashflow issues. The general manager, who had access to Ruggles's bank account records, claims that this is not true, and that Molzan has always had enough money to pay his waitstaff -- but chooses not to.

"He says if he pays us he won't be able to pay the bills at Ruggles and we won't get paid either way," Villarreal told the Press last week, prior to the walk-out. "Management constantly tells us to be patient and not quit."

Molzan told the Press: "I'm a small business guy. I live on cashflow just like everyone else in a bad economy." Last week, Molzan was blaming his cashflow issues on a downed computer system and a slow credit card company.

"Our computers went down a week ago and we're working on getting them back up. My credit cards haven't been going back into the bank," Molzan said. Today, he's blaming the general manager -- even though Villarreal claims that the GM was the only person at Ruggles fighting to get the waitstaff paid.

The excuses have gone on long enough for Villarreal. The waiter, who worked at Bonnie's Beef & Seafood for six years before leaving for Ruggles, compared the two situations: "Bonnie's always made the effort to pay us, even when business was slow."

Villarreal has made an appointment with the Harris County District Attorney's office to file a civil case against Molzan, although he'll have to get in line: Molzan is currently embroiled in several other lawsuits, including two against the owners of Ruggles Green and Ruggles 11th Street Cafe. (Molzan doesn't run those restaurants, but rather licensed his name and recipes to them.)

In the meantime, Villarreal plans to picket the restaurant until he receives all the back wages he and his other waitstaff claim they are owed. "A lot of the servers are too scared to speak up, but I will," Villarreal said. "I'm fed up working for free and not being treated with respect."

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Katharine Shilcutt