Slammed by state regulators, Diego's owner reaches out to fight back
By Kyle Magin
Staff Writer
Friday, August 26, 2011
TheUnion.com

June Henriquez operates Diego's on Colfax Avenue in Grass Valley, inside the exact building her grandfather built for his TV repair shop and that her grandmother still owns.

The former professional snowboarder-turned Chilean restaurateur has worked hard there alongside her mother, Diane Robison, for 8 1/2 years to make it a local favorite.

She's close to losing it all, though, over a $7,500 fine levied by a state regulator with a tough-guy reputation. But politicians at the highest levels of state government — including the governor's office — are rushing to her defense.

In February, Facundo Rosas, a deputy labor commissioner for the California division of labor standards enforcement, visited Diego's to find Henriquez had five employees working that day and her worker's compensation insurance had lapsed.

Henriquez was current on her payments but failed to file necessary paperwork to retain the insurance, so her company canceled it. When Rosas visited, Henriquez was days away from an audit necessary to get her insurance re-started and explained as much to the regulator.

"He was doing his job, though, and he gave me the fine and shut me down," she said.

Rosas did not return calls seeking comment for this story. His name has appeared in other published reports as a difficult regulator, seeking to fine or shutter businesses without proper certifications across Northern California.

Diego's was out of business for a week in February, which didn't help during a winter that Henriquez calls her toughest ever business-wise, with sales off as much as $1,000 per day.

"We really felt the recession this year," she said.

June Henriquez (left) owns Grass Valley's Diego's
along with her mother, Diane Robison.
Photo for The Union by John Hart

But, she said, she found new worker's compensation insurance and reopened.

"I'm not trying to skip out on my responsibilities," she said. "I know I have to have my worker's comp, and I would hate for any of my employees to get hurt without coverage."

Henriquez has no documented worker's compensation claims, however, and appealed the fine once her insurance was restored. In May, the labor board denied her claim and ordered her to pay the fine, which she could appeal to the state Supreme Court, though she risks a loss there, which would mean her costs would be doubled.

The original fine already threatens her business, she said.

"I don't have $7,500," she said. "And (it's) either pay that, or shut my business down. I'm not willing to give it up yet, because my mom and I feel a loyalty to our employees."

District 3 Assemblyman Dan Logue has taken an interest in the case, and calls the fine a blatant case of "revenue collecting."

"If you have an assault, you get charged a $2,000 fine; but if your people don't have insurance, it's $7,500?," Logue said.

Shutting down her business would mean adding her 13 employees to the pool of unemployed in Nevada County, which will shortly include the unemployed from recently-closed businesses like Nevada City's Amigo's & Co. and a handful of others over the past year.

"I've had a few of my employees since I opened the doors here," she said. "They are like family to us."

Henriquez asked the labor board to allow her to make a $200 monthly payment on the balance of her fine. She's heard nothing back from the agency.

Distraught, she shared her problem with a friend, who notified Gregg Lien, a Tahoe City attorney and Diego's customer. He took on the case pro bono and said Henriquez' best chance at avoiding the lump-sum charge was to get her story out.

Lien took to local blogs to publicize her case, and it eventually reached Logue's ears.

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Logue (R–Penn Valley), an anti-regulation conservative, immediately brought her case to a Monday meeting with Gov. Jerry Brown.

"He jumped straight out of his chair," Logue said. "He talked with his people, and it's my understanding the labor board heard from him personally."

Logue's "ideal" outcome for the situation is that Henriquez, a first-time offender, will have the fines eliminated or converted to a monthly payment, he said.

It's unclear as of yet what the outcome of the case will be.

"The labor board should not be going into a business to collect fines," Logue said. "They should work with her to make sure she has the insurance. We've got to give businesses a break, and this is legislation we're going to look at fixing. It's not just the restaurant industry, but the agricultural industry and every industry is under siege from over-regulation."

The outpouring of support has been overwhelming, Henriquez said.

"I'm blown away by it," she said. "Just by me whining to a friend, my story went to Jerry Brown." ~o~

To contact Staff Writer Kyle Magin, e-mail kmagin@theunion.com or call (530) 477-4239.