Business
Sweet Lady Jane bakery faced class-action lawsuit for wage theft before sudden closure
Sweet Lady Jane, a bakery beloved by Angelenos and a celebrity clientele, unexpectedly shuttered six locations on New Year’s Day, citing a lack of sales that prevented it from paying its “treasured employees.”
But for some former workers at the dessert chain, the message rang hollow.
For nearly seven months, the companies behind Sweet Lady Jane have been embroiled in a class-action lawsuit filed by an employee who alleged wage theft, according to court documents reviewed by The Times. Employees also said the company suffered from mismanagement.
Blanca Juarez, who worked at the bakery for about two months in 2022, alleged that Sweet Lady Jane LLC and SLJ Wholesale LLC did not compensate her for all hours worked, including overtime, as well as for missed meal periods and rest breaks, according to a complaint filed June 30 in Los Angeles County Superior Court.
“Defendants engaged in a pattern and practice of wage abuse against their hourly-paid or non-exempt employees,” the lawsuit reads.
A note from the owners of Sweet Lady Jane tells customers they had decided to close their business.
(Genaro Molina / Los Angeles Times)
Juarez also accused the bakery of not keeping accurate payroll records and of failing to provide “reimbursement for necessary business-related expenses,” according to the lawsuit.
The lawsuit alleged that Sweet Lady Jane had the ability to pay but “willfully, knowingly, and intentionally failed to do so” in an effort to “increase Defendants’ profits.”
Attorneys for Juarez and Sweet Lady Jane did not respond to requests for comment.
In court filings, the bakery chain denied Juarez’s allegations and called the complaint “unverified.” Lawyers wrote that Juarez and other employees who could join the lawsuit have been paid “all sums earned by them that are due.”
In a court document filed Tuesday, lawyers said the companies intend to file for a state alternative to bankruptcy, which could allow creditors, including former employees, to try to recover what they are owed.
Some former workers have been offered severance packages, according to documents obtained by The Times. The documents say that if employees sign the deal, they must agree not to join lawsuits “seeking any additional amounts of money or to participate in any class, collective or representative actions.”
Tables are piled up against the front counter.
(Genaro Molina / Los Angeles Times)
On Dec. 31, Sweet Lady Jane uploaded an Instagram post announcing the closure of all stores. The post was taken down, and the next day employees received word that “the company was closing permanently.”
“However, we want to tell you that we are very grateful for your loyal service and will be paying you your regular wages through January 5th,” said the email, which was obtained by The Times.
In a public statement, the company said it “did not come to this decision lightly nor quickly.”
“While the support and loyalty of our customers and our employees has been strong, sales have not been high enough to continue doing business in the state of California, allowing us to service our lease obligations and pay our treasured employees a living wage,” the email said. “We hope the sweet memories of the joy we had been able to share throughout L.A. will stay with you, as it will for us.”
At the West Hollywood outpost of Sweet Lady Jane, which opened in 1988 on Melrose Avenue, an outdated sign hung on the door five days after the closure announcement: “We will be closed for renovations beginning Monday, September 18th.” Customers were advised to shop at stores in Santa Monica, Calabasas or Manhattan Beach; the latter location had closed toward the end of 2023.
Concerns over finances predated the companywide closure.
Phoebe Davidson, who was employed from summer 2021 to summer 2022, said Sweet Lady Jane had been cutting back on its menu and hitching up prices.
When a 9-inch cake had cost about $90, Davidson said, customers would often round up to $100 for a tip. But the company raised the price to $100.
“Then people wouldn’t tip us,” Davidson said. “And we started asking for raises, and they were like, ‘Well, there’s no money for raises.’ How’s that possible when we’re selling thousands of dollars worth of cake a day?”
Two recent workers, who requested anonymity because they feared retaliation from the company and difficulty finding jobs, told The Times that the business had been undergoing change prior to the shutdown — such as expanding into new neighborhoods and temporarily closing popular sites for remodeling.
The closure, both said, caught them by surprise.
“I did get the feeling that there was a lot happening behind the scenes,” said one. “They closed Melrose. They closed Encino. They tried to open Larchmont, and all of this was at the same time.”
The abrupt closure of all stores left some customers — among those who sought out the bakery’s beloved Triple Berry Cake and other desserts were Taylor Swift, Blake Lively and Sophia Bush — scratching their heads.
Longtime customer Meagan Mayo said she was “totally shocked” to hear the news. The company had a strong presence in the film and television industry, said Mayo, who works as an assistant for a streaming video service.
“It’s L.A.,” she said. “A lot of places, a lot of restaurants, a lot of bakeries just don’t make it. We’ll be sad for a while, and someone else will come and take their place, but it is extremely unfortunate.”
Courtney Cowan, whose bakery Milk Jar Cookies announced its closure in the new year, reiterated how challenging it has been running a food business in L.A.
“It has never been an easy industry — food and, specifically, baking,” Cowan said. “It is extremely labor-intensive, and the hours are crazy, and there are a lot of moving parts.”
Syeda Fathima visited Sweet Lady Jane’s Encino location on Dec. 31, what would be its last day of operation.
She was impressed by how beautiful the store was, she said, adding that she talked with a few cheerful employees about potential job openings.
Five days later, there were signs on the doors announcing the closure. Passersby peered into windows, muttering their disbelief.
All that was left was empty seats, the display shelves void of cake.
Times staff writer Sarah Mosqueda contributed to this report.
Business
Read Nick Bilton’s Letter to Scott Pelley
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
Business
Aspiration co-founder sentenced to 14 years for fraud
The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.
The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.
Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.
Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.
Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.
In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.
The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.
Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.
The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.
The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.
Business
Monterey Park takes landmark vote on banning data centers
Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.
If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.
Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.
As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.
Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.
“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”
The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.
The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.
While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.
The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.
In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.
The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.
“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”
The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”
While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.
“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”
The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.
As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.
Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.
Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”
While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.
“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”
Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.
Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.
“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”
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