When Restaurants Are Going To Close, Why Aren’t Employees and Customers Warned?
It was August 1, the first day of Houston Restaurant Weeks 2018, more than a month of prix fixe dining menus benefitting the Houston Food Bank that’s hotly anticipated by diners every year. As in the past, the staff at Ciao Bello was preparing for a busy night, with a portion of sales from each Houston Restaurant Weeks meal going to the Houston Food Bank.
Some employees, though, were more nervous about their jobs than usual. Two weeks earlier, Vallone’s, also owned by namesake Tony Vallone and business partner Scott Sulma, had shuttered. However, according to bartender Katelyn Faye and server Matt Simon, general manager David Siegman assured the staff that Ciao Bello would be staying open.
“We were told not to panic after the Vallone’s closure,” wrote Faye in a message to Houston Food Finder. “[Siegman] told us nothing was going to happen to us, not to worry about losing our jobs — but it almost seemed like they were trying to convince themselves of this.” Faye has worked in the restaurant industry for seven years, including three years at multiple Pappasito’s Cantina locations and two-and-a-half years at Ciao Bello.
Simon, a server who says he’s worked in the Houston restaurant industry since 2002, including at Kiran’s and The Pass & Provisions, had a similar statement. “In multiple meetings we were told not to worry. Ciao Bello is not closing,” he said.
Both Simon and Deanna Landon, an employee who had worked for Ciao Bello since February of 2016, furthermore asserted that not only were staff members assured that Ciao Bello was not closing but that employees were ordered by management to not discuss the potential of that happening. “We were actually threatened with termination if we talked about the possibility of [Ciao Bello] closing or that we thought we were going to close,” states Landon.
In an interview with Houston Food Finder, Siegman firmly denies that threats were made to staff. “There were an abundance of rumors swirling after the closing of Vallone’s. While rumors began to swirl, I felt it was in the best interest of my staff and our guests to enact a policy that we were not going to accept negativity and whispers effecting day-to-day operations. Under no circumstances was anyone threatened with their employment; we simply stated to the employees that those who were heard to be spreading rumors and negativity through the restaurant would be sent home and excused from their shift,” he said.
By the afternoon of August 1, though, word got around among the employees that Sulma and Vallone would be coming into the restaurant. Faye says that Sulma ended up visiting alone — and told the Ciao Bello management staff that the restaurant was closing the very next day. That night’s dinner service would be the last. “He sat with management for maybe 15 minutes and left. David Siegman was left to tell us all around 4:30 p.m.,” Faye stated. Shortly after, a message to patrons appeared on Ciao Bello’s Facebook page (which was subsequently removed within two days of the restaurant’s closing).
Siegman says that he was also among the last to know, finding out only during Sulma’s visit that the restaurant was closing after all.
“Two employees were transferred [from Vallone’s] to Ciao Bello only to get the exact same shock one week later. Two nine-year veterans were stunned. A server was crying,” stated Simon. The server admits losing his temper over the news, swearing at Siegman, refusing to work the final dinner service and storming out. Simon also says that Siegman responded by threatening to call the police.
Ciao Bello’s closing happened much like Vallone’s two weeks prior, with only hours’ notice to employees and patrons alike. It put the workers out of a job with no notice and left loyal patrons with little or no time to have a last meal or say goodbye. Yet, it’s a common practice that’s been repeated for many years at restaurants big and small, well known and obscure, venerable and barely open.
Houston Food Finder left multiple phone messages for Vallone and Sulma, both at Ciao Bello on the last evening of service and at Vallone’s remaining restaurant, Tony’s, to discuss the employees’ claims. The calls were not returned and neither could be reached for comment.
Siegman did post a letter on Facebook thanking the guests who visited for Ciao Bello’s final night of service and stated his focus would be on finding his employees new jobs. The post has received an outpouring of support from guests and industry professionals and has been shared numerous times. Representatives for The Original Ninfa’s on Navigation, Chris Shepherd’s upcoming Georgia James, and recently opened Emmaline have all offered the employees assistance. If there’s a silver lining to the situation, it’s that with the steady pace of new restaurant openings in Houston and a thriving food scene, restaurateurs are frequently seeking employees.
In fact, that is one reason restaurateurs may balk at giving employees notice of an impending closing. Owners have to weigh their staff’s ability to find another job against a business need to serve guests — and keep revenue coming in — as long as possible. It’s difficult to keep a restaurant open until the end if there’s no one to serve your guests.
There’s also the possibility of vandalism or theft by employees or guests. Haven, the farm-to-table concept led by executive chef Randy Evans (who now works for H-E-B’s corporate office in San Antonio), was sold at the end of July 2014 — around the same time of year as Ciao Bello. Evans says that the new owner required that Haven’s staff and customers not be given advance notice of the impending closing. “He requested that we not let anyone know that we were closing, because the last time he took over a restaurant the employees or previous owners actually damaged the building as they were leaving.” said Evans.
“The next morning I’m going through doing inventory [and] getting ready to make my purchases. [Houston] Restaurant Weeks was starting on a Friday that year so I knew things were going to be crazy and we needed a lot of product for the weekend. I texted him at 10 a.m. and asked him if there was any news and he said he hadn’t heard anything. I told him I’d wait until two to place my order,” Evans continued, “He called me around 12:30 saying the new buyer wanted the restaurant today and that the contracts were being signed tomorrow at 10 a.m.”
Evans said that he did his best to take care of the staff. “I owed it to our staff to help them land on their feet. After lunch was over, a.m. and p.m. crews showed up basically together and I let them know that they’d done a great job. After that meeting I immediately got on the phone and started contacting all my friends in the business and by the time I was done at 3 o’clock every person in that building that wanted a job had a job in another restaurant the next day,” Evans recollected.
Perhaps the most common reason for the unexpected closing of any independent business is financial struggles. Last week, Cherry Pie Hospitality was locked out of both Pi Pizza and Star Fish after the landlord claimed the company was overdue on rent. Cherry Pie Hospitality was able to resolve the banking issue to pay their rent and received new keys to both restaurants the next day.
Other concepts like EaDo’s Burgr Hous aren’t as fortunate. According to Eater Houston, Burgr Hous’ landlord locked the building for failure to pay rent in late July of this year shortly after the restaurant’s June 7 opening.
Some Houston diners might remember the sudden closing of wildly critically acclaimed northern Thai restaurant Foreign Correspondents in December of 2016. The management of parent company Treadsack said they intended to keep Foreign Correspondents open until December 31, but when Stoops packed up his knives and abruptly left the restaurant on December 18, that plan crumbled. The next day co-owner Chris Cusack announced that the restaurant was closed.
The Houston Press later discovered that financial woes were a contributing factor to the closing of the popular Heights restaurant. Treadsack claimed that a former bookkeeper failed to pay taxes due to the IRS, which eventually led to a lien of over $1.1 million. Foreign Correspondents was the first of three of the company’s restaurants to fall; Hunky Dory and Bernadine’s followed six months later.
Treadsack filed for Chapter 11 bankruptcy in March of 2017 to restructure debts but still isn’t out of their legal troubles. Aetna Life Insurance Company filed a civil suit against Treadsack in February of this year in the 129th District Court of Harris County for an unpaid invoice from 2016 totaling $19,295. On August 7, a default judgment awarded attorney’s fees to Aetna.
The unexpected closing of 59 Diner locations in February 2016 also had to do with legal and financial issues. It turned out that owner Naveed Baig owed $200,000 to 19 employees as part of a lawsuit settlement accusing him of manipulating time clock records, which led to under-reporting earned tips and overtime pay. Supply company Sysco also sued Baig for $137,000 in unpaid dept. Baig’s case with Sysco ended in June of 2016 when he filed for Chapter 7 bankruptcy protection.
Circumstances behind every restaurant closing vary and, in some cases, advance notice just can’t be given. When it is possible, though, there are several advantages to owners in doing so. Guests might often flood a soon-to-close restaurant to enjoy dishes or visit with their favorite servers and bartenders one last time. That supplies a sudden cash infusion that can keep staff morale high and potentially help owners resolve financial issues. In addition, should the restaurateur open another restaurant, advance notice might strengthen the loyalty of an existing customer base.
Advance notice might also help owners get their employees back in the future if they open a new business. The hospitality industry is famously tight-knit and restaurants all compete for staff members. Employees won’t likely ever forget, recommend or return to an employer who suddenly left them without a job.