Suit alleges range of infractions at restaurant.

The owners of the popular Sushi Roku restaurant chain have been sued by their former offsite catering manager for allegedly engaging in illegal activities that include sexually harassing female employees, paying undocumented workers under the table and refusing to book events for African Americans and Persians.

Laura Holycross, who worked almost two years at Innovative Dining Group, which owns the chain of Sushi Roku, Katana and Boa restaurants, says she was fired two months ago after complaining about the illegal activities, according to the suit, filed in Los Angeles Superior Court.

"Things were going well and then, according to the complaint, she began complaining about various things," said Andrew Friedman, a partner at Helmer Friedman LLP who represents Holycross. "She noted the company wasn't complying with the law; they retaliated against her and ultimately fired her because of her complaints."

IDG has been one of the local restaurant industry's major success stories, with its swanky Asian-styled restaurants in Hollywood, Santa Monica, Pasadena and Las Vegas. Aside from a brief tussle with another restaurant operator over the use of a trademarked name, and an unsuccessful effort to open at the W Hotel in Westwood, there have been few hints of operational troubles.

Lee Maen, one of the IDG owners who is a named defendant in the suit, refused to comment on Holycross' specific allegations, but said he "categorically denies all of it" and that she was fired "for good cause."

"It's almost laughable, other than the fact that we have to deal with it," he said.

Common complaints

The suit, while addressing a host of issues, highlights common complaints in the restaurant business. Several other top restaurants in Los Angeles have been accused in recent years of racial discrimination against their employees and their customers.

Accusations of paying undocumented workers "under the table," or in cash, are also very common, said Darlene Heskamp, a restaurant specialist at Beitler Commercial Realty Services in Brentwood. "When anybody can do something under the table and not pay exorbitant fees to the government, that's what people do," she said.

Still, she was not aware of such allegations being brought against IDG's owners, whom she knows. "What goes on internally I have no idea, but in the restaurant industry they are very well liked for their professionalism," Heskamp said.

After careers in finance, real estate and marketing, Maen, Philip Cummins and Craig Katz started the Gem Bar & Lounge in Hollywood. They opened the first Sushi Roku in 1997.

Cummins had run two other nightclubs, Renaissance and Lounge 217 in Santa Monica. Michael Cardenas, the fourth partner, brought years of restaurant experience as the former manager of Teru Sushi in Studio City and Matsuhisa in Beverly Hills. He also worked at L.A.'s Hard Rock Cafe, Vertigo and Bravo Cucina.

Holycross ran her own event planning firm before joining IDG. Her past work involved corporate events and big-ticket weddings, many of which were featured in bridal magazines.

"She gravitates toward the high-end, interesting, not run-of-the-mill kinds of events," said Anne Muller, owner of Card Tricks, a South Pasadena specialty store that sells party and wedding invitations. Two years ago, Muller and Holycross worked on a $75,000 Medieval-style wedding in Topanga Canyon that featured "Moulin Rouge" chairs, game hens and bridesmaids with prosthetic elf ears and fairy dresses.

"She's fairly well known and had a spectacular reputation when she was doing her own events," said Carol Saunders, president of the Greater Los Angeles chapter of the International Special Events Society, of which Holycross is a member.

Holycross appeared as an expert on an episode of Lifetime's "Operation Style," a reality television show that taught people how to host large parties.

Leering and smoking

Friedman said Holycross would decline to comment as long as there was pending litigation.

According to her suit, Holycross was in charge of catering and special events for IDG--including the final episode after-parties for "Friends" and "Everybody Loves Raymond," the 2005 Grammy Awards VIP dinner for Virgin Records, and the 2005 Golden Globes Awards pre-party for L.A. Confidential magazine.

As part of her employment agreement, IDG promised Holycross a 5 percent commission on gross event sales and a $45,000 base salary that would jump to $50,000 within the first three months. Instead, IDG raised her salary to $47,740 and lowered her commissions for Las Vegas events to 2.5 percent, the suit says.

The most detailed allegations claim that IDG's owners regularly sexually harassed female workers, including Holycross.

"The environment was degrading to women," Friedman said. "Men made stereotypical and derogatory comments about women and spoke about them in sexist terms. One owner, Lee Maen, would leer at her in a sexual manner and make comments about her body and her appearance. Other officials engaged in widespread sexual favoritism, selecting employees for events only if they had relations with IDG officials."

Specifically, the owners referred to her and other women as "babe" and "sweetheart," made graphic sexual comments and sent sexually explicit e-mails, according to the suit. After one event, the former manager of Boa groped her while he was drunk. On a separate occasion, another employee asked her to take off her clothes.

The suit also alleges widespread racial discrimination and drug use. She said the owners told employees not to book events that involved blacks or Persians, the suit says. Cardenas "regularly was allowed to smoke marijuana in his office," the suit says.

Cardenas, who is a named defendant in the suit, did not return calls.

Holycross also said that IDG failed to pay taxes on all its income and hired undocumented workers that were paid "under the table" to avoid federal, state and local taxes, according to the suit.

"She was advised to retain these employees and ensure they were paid under the table," said Friedman. "They were paid cash."

Many of the employees did not receive adequate overtime pay and were forced to sign waivers on their legally allowed rest and meal periods, the suit says.

She also said the company charged some of its clients for nonexistent services and products, such as $1,835 to Virgin Records and $200 to HBO for equipment rentals they did not provide.

After she told the owners about the illegal activities, they asked her to resign, according to the suit. When she didn't, they hired a lawyer to conduct a three-week internal investigation into the complaints, as well as unspecified complaints that had been made against her, the suit says.

The investigator, Kelly Scott, a partner at Ervin Cohen & Jessup LLP, "barely spent any time questioning Ms. Holycross about her claims of illegal conduct," the suit says. On Aug. 15, she met with owner Cummins and Michelle Bennett, the director of human resources for IDG.

"They met with her and refused to say the results of the investigation," Friedman said. "But they fired her nonetheless. We've repeatedly asked for his report, and they've failed to provide it."

Cummins declined comment. Bennett and Scott did not return calls. All three are named defendants in the suit, which seeks an unspecified amount of monetary damages for lost wages, attorney's fees and other costs.

Maen, who serves as the spokesman for IDG, defended the investigation and its conclusions.

"We did a third party investigation on all her subject matters, and that person found nothing in there was true," he said. "We terminated Laura under very, very good cause. This is simply retaliation, throwing the kitchen sink in. We live in a litigious society and this is what happens."

He refused to say why Holycross was fired, saying only that "she was doing relatively well and she did something that was absolutely against our policies. I wasn't thinking of terminating her before she did something."

Maen declined to comment on her specific allegations against him.

"Obviously, it's a one-sided thing, and I wish I could tell you why she was terminated and why she has this bitter attitude," he said. "But I can't comment on it."

AMANDA BRONSTAD Staff Reporter