What you need to know: In a win for workers, the Labor Commissioner’s Office (LCO) reached settlements with multiple parties for $942,604 to settle a citation and a lawsuit filed against Baked in the Sun, a wholesale bakery in Vista, California that closed its doors without paying 187 workers. The parties involved will now have to pay more than $3 for every $1 in wages originally owed to workers. 

November 6, 2024 - Sacramento— The LCO has announced nearly $1 million in settlements to secure back pay for 187 former employees of Baked in the Sun, a bakery that abruptly closed its doors without notice, leaving workers unpaid for their wages and vacation time. The LCO’s actions have resulted in workers receiving more than three dollars for every dollar owed – ensuring justice for those who were left jobless and without the compensation they rightfully earned.

What Labor Commissioner Lilia García-Brower said: “This case demonstrates our team’s aggressive litigation strategy in pursuing enforcement actions against all liable parties, leading to the identification of assets that might otherwise have gone undetected. We pursued multiple defendants who collectively are paying three times the amount initially owed in wages. Robbing workers of their wages has proven to be a costly crime.”

How we got here: As Baked in the Sun faced financial struggles, the company sought loans from multiple lenders. One lender, HCAP Partners III, L.P., took control of the company in the months before its demise, leading to the nonpayment of wages. The Labor Commissioner held this lender and its restructuring officer, Gregg Yorkison, jointly responsible for the failure to pay those wages through a wage citation.

Shortly after the bakery ceased operations, another lender, First Choice Bank, took possession of company assets and sold them to new owners. In doing so, it failed to use sale proceeds to pay final wages to the bakery workers. This action violated state law, which requires that workers’ final three months of wages be paid first when a business closes and its assets are sold. The LCO filed a lawsuit seeking those wages.

After issuing the citations and filing the lawsuit, the LCO settled with most of the parties, including founder Rachel Shein, lender First Choice Bank, lender HCAP Partners III, L.P., and restructuring officer Gregg Yorkison.

LCO’s Bureau of Field Enforcement (BOFE) and Judgment Enforcement Unit (JEU) collaborated on this case to help the workers recover their unpaid wages. More judgment success stories are posted online.

The LCO has begun distributing the back wages to former employees of Baked in the Sun. Workers who believe they are owed money in this case should contact the LCO at 833-LCO-INFO (833-526-4636).

The Labor Commissioner’s Office in 2020 launched an interdisciplinary outreach campaign, “Reaching Every Californian.” The campaign amplifies basic protections and builds pathways to vulnerable populations, providing critical information to workers and employers on legal protections and obligations, as well as the Labor Commissioner’s enforcement procedures. Californians can follow the Labor Commissioner on Facebook and Twitter.

The California Department of Industrial Relations, established in 1927, protects and improves the health, safety, and economic well-being of over 18 million wage earners, and helps their employers comply with state labor laws. DIR is housed within the Labor & Workforce Development Agency
Source: California Department of Industrial Relations