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.

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.