Well-known Healdsburg restaurant owner ordered to pay over $82,000 following federal labor investigation

Prominent Sonoma County restaurant owner and chef Octavio Diaz has been ordered to pay $82,666, including back wages, damages and penalties, following a federal labor investigation into his Agave Mexican Restaurant in Healdsburg.

According to a news release from the U.S. Department of Labor, the restaurant denied three employees more than $35,000 in overtime wages.

The division recovered $35,727 in unpaid wages and $35,727 in liquidated damages. It also assessed an additional $11,212 in civil penalties to resolve Diaz’s violations of the Fair Labor Standards Act.

Agave has been a fixture of Healdsburg’s dining scene for the last 14 years and served as one of Diaz’s many local food and business ventures with his brother Pedro. Those ventures include the now shuttered Tu Mole Madre and Persimmon restaurants along with the Healdsburg Latino market and taqueria Casa de Mole.

He also owns popular, outdoor food truck mecca Mitote Food Park, which opened on Sebastopol Road in Santa Rosa’s Roseland neighborhood in 2022.

Diaz declined to comment to a Press Democrat reporter. A law firm representing him also declined to comment.

The Department of Labor’s Wage and Hour Division investigation determined that three employees were deprived of overtime pay and were instead paid a flat salary regardless of number of hours worked.

Investigators also determined one worker was paid less than minimum wage, and that Diaz failed to produce documents of employees’ dates of birth. The required records included employees under the age of 16.

“This Sonoma County restaurant owner has found there are costly consequences for willfully violating federal regulations that protect employees’ rights to be paid fully for their work,” Wage and Hour Division assistant district director Alberto Raymond said in a statement. “This employer denied workers thousands of dollars in wages for their hard work, but thanks to this investigation they now will be paid as the law requires.”

Last fiscal year, the Wage and Hour Division recovered over $29 million in back wages for food service industry workers, including a settlement with 14 Bay Area Subway restaurants, six in Sonoma County and three in Napa, where the franchisee was fined $1 million.

Federal authorities announced their actions in the Subway case in the wake of a Press Democrat investigation that found a local franchise owner failed to pay employees on time, withheld tips and forced underage employees to work alone at some of his Sonoma County restaurants, among other claims.

“We continue to find restaurant industry workers being denied their rightful wages and remain vigilant in rooting out unscrupulous business operators who take advantage of those whose hard work helps restaurants succeed,” Raymond said. “We encourage workers to contact us, even anonymously, if they feel their rights are being violated.”

Workers who are curious to see if they are owed any back wage can use the division’s Workers Owed Wages search tool or contact the division directly for assistance at 1-866-4-US-WAGE (487-9243).

Editor’s note: This story has been revised to clarify that the $82,666 represents the full amount, including back wages, damages and penalties, due from restaurant owner Octavio Diaz as a result of the federal labor investigation into his Agave restaurant.

You can reach Staff Writer Sara Edwards at 707-521-5487 or sara.edwards@pressdemocrat. com. On Twitter @sedwards380.