Terces Engelhart, owner of Café Gratitude, just posted the following announcement on her Facebook page announcing the closure/sale of all Northern California Café Gratitudes locations. According to Englehart, some "aggressive lawsuits" from former employees brought her to the decision to shutter her vegan/cult restaurants.
With great sadness we are announcing the upcoming closing/sale of all Northern California Café Gratitudes.
A series of aggressive lawsuits has brought us to this unfortunate choice. Although we believe that we have done nothing wrong and our policies are completely legal, it will cost us too much money to defend them in court. Despite telling the attorneys that brought the lawsuits that the current structure and resources of Café Gratitude are insufficient to sustain and defend our community, they have refused to give up and are forcing us to close.
We appreciate the loyalty of our employees and customers over these past 8 years and are grateful for having had the opportunity to serve each of you. We were happy to tolerate low margins and sustain ourselves on the transformation and personal growth of our people, while providing local organic vegan food to our community in an atmosphere of unconditional love. That commitment is under attack and we are not able to weather this storm.
This process will take a few months so please keep coming in and let's celebrate our 8 years of success together, we are grateful for you!
We have come to realize that it isn’t how we serve that is most important but rather that we serve.
Our mission will survive this, as love cannot be threatened.
Thank you and love to you all,
Matthew and Terces Engelhart on behalf of Café Gratitude, LLC
The lawsuits in question stem from former Gratitude employees who left the restaurant with a bad taste in their mouths, so to speak. East Bay Express published a 2009 article that claimed, among other things, employees were fired for not attending Landmark Forum classes.
What outsiders may not know is that the culture at Café Gratitude is closely interwoven with a self-help philosophy of personal transformation called the Landmark Forum. Café Gratitude's founders say the classes and seminars, which employees are highly encouraged to take, empower people, create a better work environment, and help change lives. Yet some employees say the curriculum fosters an uncomfortable environment in which their personal beliefs are compromised. One former employee says she was fired for refusing to attend a Landmark seminar, and it's unclear whether the company's practice of requiring managers to attend and pay for half of the $500 seminar is legal.
"It is definitely a challenge for those people to stay comfortable saying no," admitted Paddy Smith, general manager of the Berkeley Café Gratitude. Although Smith says she was initially "offended" by the invitation to attend one of the seminars, she eventually signed up and found it to be a "life-changing" experience. "I learned how to be empowered and creative, get the results I want," she said. At Café Gratitude, she added, Landmark's teachings manifest themselves in the form of better communication, honesty, openness, and a no-gossip policy, and are so ingrained into company culture that she has a hard time differentiating between the two. In fact, Café Gratitude wouldn't exist if it wasn't for Landmark.
In 2011, former employee Sarah Stevens filed suit claiming "that in her time working at various CafGraf locations, she was deprived of legally-mandated breaks, and received only a fraction of the tips she rightfully earned." Via a statement from her legal team, Kumin Sommers LLP:
In addition to not receiving her rest and meal periods, Stevens alleges that she is required to participate in an unreasonable and uncustomary tip pooling scheme that leaves her with a very small percentage of the tips she earns as a server. Specifically, Stevens alleges that after tipping out 20% of her daily tips to the “central kitchen” — an offsite kitchen on 14th street — Stevens must then split the remaining 80% of her tips equally with all of the Café Gratitude staff, including the “shift leaders” and retail employees.
Among other gastronomic eccentricities, Cafe Gratitude was famous for its menu, which boasted such food titles as "I Am Dazzling" or "I Am Fulfilled" or "I Am Grounded."
No word yet if this means Gracias Madre, Cafe Gratitude's vegan mexican food restaurant on Mission Street, will close too. But we'll update as soon as we know more.
Update I: SFist talked to Shandra Gilbert, Gratitude's Director of Operations, who explained to us that, yes, Gracias Madre is also up for sale. Alas.
Update II: According to Vegansaurus, many employees had no idea the closures were coming. They found out only after reading SFist. Vegansaurus' Laura Beck reports, "We now know for a fact that many employees (like, higher-up employees) had NO CLUE this was happening. They found out via SFist. Really nice, Café Gratitude."
Update III: Inside Scoop notes that, quite conceivably, Cafe Gratitude might not be closing just because of employee lawsuits. "These are not huge cases. There's no reason, financially, for them to close eight locations,” Stephen Sommers, an attorney who filed the wage and hour claims, tells Inside Scoop. He goes on to add that, since the lawsuit number is under $200,000 and this is not a class-action suit, "[t]hey are not closing these restaurants because of these lawsuits. There’s something else."
Which is to say, hmmm.
Update IV: LAist reports that the Gratitude, which opened in March of this year, will remain open. "Café Gratitude's NorCal owners Matthew and Terces Engelhart have teamed up with Christopher and Lisa Bonbright under a separate LLC to run the only SoCal outpost of the eatery that serves raw and vegan eats to plebes and celebs," notes LAist editor Lindsay William-Ross.