The County of San Diego announced Thursday that it has filed its first major labor enforcement lawsuit against employers, alleging several companies used a franchise scheme to cheat sushi workers who filled grocery store counters out of pay, overtime and basic workplace protections.
The lawsuit follows an investigation led by the County’s Office of Labor Standards and Enforcement (OLSE), which examined how sushi workers were classified, paid, managed and required to operate inside grocery stores across the state. County Counsel is supporting OLSE’s enforcement work through the filing of the civil action.
Officials said the lawsuit is intended to protect workers in the booming grocery store sushi market, where national sales exceed $2.5 billion and branded sushi counters have become common inside major grocery chains.
County Board of Supervisors Vice Chair Paloma Aguirre and OLSE Director Branden Butler announced the filing during a morning press conference at the County Administration Center. They were joined by Alor Calderon, Executive Director of the Employee Rights Center, who spoke as a community partner and worker advocate.
“This case is about exploitation hiding in plain sight,” Butler said. The companies built a business model on the backs of workers who deserve far better.”
Sham Franchise Scheme
The lawsuit alleges the companies contracted directly with grocery stores to provide fresh sushi and ready-to-eat meals, while labeling the sushi chefs who prepared, stocked and delivered those products as independent contractor “franchisees.”
According to the complaint, the workers were not truly operating independent businesses. Instead, the companies allegedly controlled the store locations, menu items, pricing, promotions, stocking requirements, delivery deadlines, operating procedures, inspections and required purchases.
The end result was, the workers ended up with no business-owner rights and were cheated out of basic employee rights guaranteed under California law, as well as being forced to pay business expenses the companies should have paid.
The lawsuit names Ace Sushi Franchise Corp.; Asiana Management Group, Inc.; Advanced Fresh Concepts Franchise Corp.; Advanced Fresh Concepts Corp.; FujiSan Franchising Corp.; Fuji Food Products, Inc.
“The lawsuit we are announcing today,” Aguirre said, “alleges a deeply troubling scheme that exploited workers by convincing them they were becoming business owners, when in reality they were being denied the rights and protections guaranteed to employees under California law.”
OLSE’s investigation found that many sushi workers allegedly worked demanding schedules, often seven days per week and more than 50 hours per week at a single grocery store location. Workers assigned to more than one store allegedly worked more than 70 hours per week. Despite those hours, the lawsuit alleges workers were denied minimum wages, overtime, paid sick leave, meal and rest breaks, workers’ compensation protections, wage statements and reimbursement for business expenses.
“Some workers earned so little they struggled to meet basic needs,” Butler said. “If they got sick, they weren’t paid. If a store closed, they bore the losses. If they wanted to leave, they could face transfer or termination fees. That is not what independent business ownership is supposed to look like, that is workers carrying the risk while companies keep the control.”
The complaint further alleges workers were required to buy or rent supplies, equipment, food ingredients, packaging, uniforms and other materials from the companies or approved vendors. Fees, charges and deductions were allegedly taken from workers’ compensation, while workers also absorbed losses related to spoilage, theft, transportation and other ordinary business costs.
The County is asking the court to stop the alleged practices and award relief, including unpaid wages, liquidated damages, restitution, civil penalties, waiting time penalties, interest, attorneys’ fees, costs and other relief available under California law.
OLSE officials said the case reflects the County’s commitment to proactive labor standards enforcement, protecting vulnerable workers, supporting law-abiding businesses and ensuring workplace protections are enforced across industries.
“Misclassification hurts workers, responsible employers and the public,” Butler said. “This action reflects exactly why OLSE exists to investigate, enforce and ensure workers are not left behind when business models are built around avoiding basic labor obligations.”
