Rubio's Coastal Grill employees can't cash final paycheck after closures
Popular restaurant chain Rubio's Coastal Grill announced it was shuttering dozens of locations across the state, and now employees say they are having trouble cashing their final paychecks.
The chain filed for Chapter 11 Bankruptcy as part of what they are calling a "restructuring plan."
Eleven Rubio's locations in Northern California are impacted, including in Manteca where Cynthia Jacoba has worked for the last four years.
"I really don't feel that we deserved that. There should have been some kind of notice," Jacoba said. "There's people that I know that were there 15 to 25 years."
In addition to the sting of suddenly losing her job, Jacoba said she went to the bank to cash her final paychecks and was told that the account was frozen and she would not be able to access her money.
"The bank said, 'Sorry, we're having trouble with the check. It's not clearing.' I was like—I just didn't understand," Jacoba said. "The guy said, 'Sorry, I can't tell you anything else.' I asked if it had to do with the bankruptcy, and he said it did."
She immediately started calling coworkers to warn them about the issue she was having. Sadly, they ran running into similar paycheck problems.
"I'm not the only one this is happening to, you know? I've been hearing across the board that either they didn't get their checks [or] some people didn't get paid for all their hours," Jacoba said.
Legal analyst Dan Eaton said that when a company files Chapter 11, employees will have to go through the process of filing a claim with the bankruptcy court in Delaware, where Rubio's filed their initial claim.
"That will put those employees at the front of the line—except for secured creditors—for payment," Eaton said. "That's the good news. The bad news is that it's still going to take some time before they are given their money."
The process will then have to go through the court system and into the hands of a judge, Eaton said. What is not guaranteed is how much money they will be awarded.
"The hope and expectation are that they will get the full amount, but this is one of those unfortunate consequences," Eaton said.
Rubio's cited the rising cost of doing business in the state of California for why they won't be able to operate all locations.
Eaton said the state's fast-food minimum wage increase is partly to blame as it is putting a strain on many franchises.
"There is increasing economic pressure, and some of them are buckling," Eaton said.
As for employees like Jacoba, they are now left figuring out what's next.
"I'm just like how many times can Rubio's just slap you in the face for all the time you spent there?" Jacoba said.
A spokesperson for Rubio's provided CBS13 with the following statement Friday afternoon:
"Rubio's Coastal Grill has become aware of a bank processing issue that prevented some former employees from being able to cash their final paycheck. We sincerely apologize for any inconvenience.
We quickly reached out to the bank as soon as we learned of the issue. It was immediately resolved and now all employee paychecks will be honored by the bank."
