A former hostess at the Mt. Kisco Diner has sued the owners to stop them from using bankruptcy to delay honoring a $900,000 settlement with herself and other former employees, claiming that one of the owners sexually exploited her.
On May 29, Julissa Morales and 10 other ex-employees filed an adversary complaint in U.S. Bankruptcy Court in White Plains demanding that the $900,000 settlement be enforced. On June 1, Morales filed a separate adversary complaint.
She accused Charalambos “Harry” Georgiou, co-owner and general manager, of subjecting her to “discrimination, sexual abuse, sexual harassment, sexual extortion and stalking.”
Both complaints also name co-owners Photios “Frank” Georgiou, the CEO, and Panayiota Georgiou, as defendants.
“Our clients deny the allegations,” bankruptcy attorney Lawrence F. Morrison stated in an email, “and look forward to their day in court.”
He said the Georgious “have always intended to honor their commitments. However, unfortunately, because of COVID-19 they were forced to close and need to restructure their debts.”
The Georgious and Mt. Kisco Diner filed for Chapter 11 reorganization in March, citing severe cash flow problems stemming from the December 2019 settlement with the employees.
They have declared $791,944 in assets and $1,060,910 in liabilities. Vendors and employees have filed claims totaling nearly $2.6 million.
From 2004 to 2019, 11 employees claimed in a federal lawsuit last year, the Georgious violated the federal Fair Labor Standards Act and New York Labor Law, by failing to pay the minimum wage, requiring them to work long hours but denying overtime compensation, cheating them out of tips, falsifying work records, and subjecting them to a barrage of insults denigrating their Hispanic heritage. Employees who complained, they alleged, were fired.
The Georgious denied the allegations but agreed to pay $900,000 within 60 days. If they breached the agreement, they would owe $2 million.
No payments were made, according to the May 29 adversary complaint. Instead, the Georgious petitioned for bankruptcy protection, automatically stopping the federal lawsuit.
Their adversary complaint reprises the allegations in the civil case, and argues that the violations were “willful and malicious,” and therefore the settlement may not be discharged in bankruptcy.
Morales’ June 1 adversary complaint makes the same argument but raises new allegations. She claims that from her first interaction with Harry Georgiou in November 2018, he pursued her “in an overtly sexual and romantic manner.”
He allegedly ordered her to his office, for instance, pressed himself against her and kissed her. When she resisted, she claims, he threatened to fire her. A few days later, he purportedly forgave her for resisting his advances, but said if she wanted to keep her job she needed to let him touch her.
On another occasion he allegedly commented, “You are mine. You do not look at any other men. You only look at me. You only smile at me.”
She accuses him of threatening to fire her, withhold wages or harm her two daughters if she did not submit to his demands.
She claims she told Georgiou in summer 2018 that she was going to leave her job and tell others about his actions. Georgiou allegedly responded that there would be consequences, and that as a lawyer he has all the power.
Frank and Yiota Georgiou witnessed Harry Georgiou touching Morales in a possessive manner, her complaint states.
Mt. Kisco Diner and the Georgious have asked bankruptcy court to allow them to assume the settlement agreement as part of their reorganization, and they pledged to pay the $900,000 no later than May 9. They have acknowledged that they have $300,000 from an insurance policy for that purpose, and that they planned to borrow the rest from friends and family.
The motion is pending.
The diner and Georgious accuse the employees and their lawyers of unfairly portraying them as villains.
The employees are represented by the Worker Justice Center of NY.
The Georgious state in another court filing that they were unable to pay the $300,000 in March or get more financing, because of the impact of the coronavirus on restaurants.
If they have to pay the entire amount now, they stated, all of their cash would be exhausted, the diner will not be able to reopen and more than 70 employees will lose their jobs.
Attorneys for the former employees stated in a court filing that the Georgious cannot be trusted. They could have made the payments in March, they argued. “They simply chose not to.”