Restaurant Undertakes Face-Saving Effort

Staff Reporter

With regulars like Warren and Annette and Will and Jada, even a whiff of scandal, a hint of bad press, can make business dry up faster than a koi pond in summer.

That's why Crustacean, the Asian-influenced Beverly Hills restaurant catering to the rich, the beautiful and their hangers-on, took the unusual step of letting the world know it was not guilty of racial discrimination charges that have yet to be leveled.

When Elizabeth An, the restaurant's chief executive, heard that an Equal Employment Opportunity Commission investigation could culminate in a suit alleging the restaurant discriminated against African-American patrons, she issued a press release denying the as-yet unalleged allegations.

The release issued by the restaurant said that the EEOC made a settlement request "amounting to millions of dollars" in advance of filing a suit.

"They were seeking every possible way to resolve this situation and to maintain their good reputation," said Stephen Jaffe of Jaffe & Co. Inc. Strategic Media in Los Angeles. "But people were talking, and it was becoming defamatory. It could snowball, and it could hurt their business. So they retained me to contain the situation and get the truth out."

Jaffe brought in two civil rights attorneys to review the information the EEOC presented to the restaurant as part of its settlement request, and the press release followed.

The preemptive strike, he said, was made because An felt "if they released the story themselves and issued the result of an independent objective review of the allegations, it would put the false rumors to rest."

The charges that Crustacean employees were directed to either deny service to black patrons or direct them to less desirable balcony seats are similar to a case involving the West Hollywood restaurant Lola's.

Lola's was accused of denying service to African-American customers between 1999 and 2000 by claiming they didn't have reservations or did not follow the restaurant's dress code. Two dozen African-American patrons sued the restaurant and are awaiting a retrial following an Oct. 19 mistrial.

Lester Jones, a shareholder with Littler Mendelson PC representing Crustacean, said the two former employees, Shalena Hughes and Patty Stevens, claim the restaurant denied African-American customers service because they didn't follow its dress code.

Hughes, who worked as a hostess at Crustacean until her dismissal in March and who is black, claims she was unfairly fired after complaining that the seating and dress code policies discriminated against African-Americans, Jones said.

For Crustacean, making a public announcement about the allegations is an unusual way to handle the situation, said Frank Melton, an employment partner at Los Angeles-based Rintala Smoot Jaenicke & Rees LLP.

"Perhaps there has been some publicity about it, or word has gotten out in some circles or publications," he said. "Maybe they're doing a preemptive strike. They figure, with their clientele, word is liable to get out about the allegations, and maybe they think they can nip it in the bud by bringing in somebody to investigate it and make it public."

Frazer Walton, a Washington civil rights lawyer brought in by Jaffe to review the allegations, said he was "unable to find any evidence that substantiates or corroborates the allegations," according to the release. The other attorney, Mark Lane, called the EEOC's findings "false and tentative."

Celeb-heavy scene

With a koi-filled, glass-top river meandering down the center of its floor, Crustacean makes no bones about touting its clientele, including Warren Beatty, Annette Bening, Will Smith and Jada Pinkett. The Zagat Survey of Los Angeles restaurants has Crustacean ranked as the 11th most popular dining spot in the region, one that caters to a "celeb-heavy 'Beverly Hills scene.'"

"Shecky's Bar, Club and Lounge Guide," another nightlife guide, is more to the point: "Wednesday, Friday and Saturday nights are chock full of mingling singles; rub elbows with the silicone-enhanced, cell phone toting, Platinum Amex brandishing Beverly Hills crowd."

It's the kind of spot that values its reputation.

So while neither the restaurant nor its owners have ever been publicly accused of discrimination, Jones said the EEOC investigation forced them to take action.

Anna Park, regional attorney of the EEOC, said an EEOC investigation determines whether any discrimination has taken place. If there is enough evidence, the EEOC will initiate settlement talks on behalf of the plaintiffs in a "confidential conciliation." If no settlement is reached, the EEOC will determine whether it has a strong enough case to go to court to compel compensation.

Park declined to comment on the Crustacean situation, saying that the agency cannot comment unless a case becomes a lawsuit.

Michael Maroko, a partner at Los Angeles-based Allred Maroko & Goldberg who represents the former Crustacean employees, said that the agency had determined there is enough evidence to file a lawsuit. "We will probably have significant information within 10 days to two weeks," he said last week.

Maroko would not comment on specific claims.

"As you can imagine, in a restaurant like this with a dress code policy, there are a number of people from time to time who feel that they should sit in a certain area," Jones said. "Or they dispute someone in their party might not be in compliance, and sometimes they get upset and sometimes they leave, and that involves patrons of all ethnicities. (Crustacean) is designed so you can have a panoramic view of the first floor dining area from any vantage point there's not a bad seat in the house."

For reprint and licensing requests for this article, CLICK HERE.