Lawsuit: Restaurateur fires partner over sex, booze and stolen recipes

Fresno restaurant giant David Fansler has sued his former partner of Pismo’s Coastal Grill in the Villagio Shopping Center, accusing him of stealing secret recipes in order to start his own restaurant.

Fansler also accused Adrian Alvarado of putting the seafood establishment in a precarious financial situation by having sex with a restaurant hostess and drinking on the job.

Another hostess filed a sexual harassment complaint against Alvarado and the restaurant ended up paying $85,000 to settle the claim, the lawsuit in Fresno County Superior Court says.

Fansler is seeking unspecified damages for such claims as breach of contract, breach of duty of loyalty, fraudulent concealment and breach of fiduciary duty. He is also seeking a declaration from Alvarado that absolves Pismo’s from any legal claims lodged by employees against Alvarado. In addition, Fansler wants Alvarado to reimburse the restaurant for any settlement payments made to hostesses.

Alvarado held the title of general manager until he was fired in October last year. He could not be reached to comment. His lawyer, Laura A. Wolfe of Fresno, said Friday she could not comment on the case “other than to say that Mr. Alvarado denies all material allegations in the complaint.”

In court papers, Wolfe noted that Alvarado has not opened a restaurant that is competing or potentially could compete with Pismo’s.

“At most, the complaint alleges that Mr. Alvarado has possession of ‘confidential information and trade secrets,’ which he lawfully obtained while working for and owning Pismo’s,” Wolfe said in an April 12 letter to Fresno attorney David Weiland, who represents Fansler.

“Simply having this information is not by itself unlawful,” Wolfe’s letter says.

Fansler is well known in the restaurant business as owner or part owner of several establishments, including Yosemite Ranch Steak and Seafood in northeast Fresno and Westwoods BBQ & Spice Co.in the River Park Shopping Center area. He employs about 350 people, including about 100 at Pismo’s.

In March, Yosemite Ranch, Westwoods and Pismo’s racked up Best of the Valley Restaurant Awards, sponsored by the Fresno chapter of the California Restaurant Association.

Reached by telephone, Fansler declined to comment on the lawsuit.

The lawsuit, which gives only Fansler’s side of the dispute, says:

In July 2014, a hostess accused Alvarado of sexually harassing her. He was 42 at the time; she was 20. After a thorough investigation, it was determined the complaint was true. “In addition, it was discovered that Alvarado was engaged in a sexual relationship with another potentially complaining employee,” the lawsuit says.

Alvarado was disciplined.

The hostess retained a lawyer and filed a complaint with the California Department of Fair Employment and Housing. The agency sent her a “right to sue” letter. But instead of filing a lawsuit, the hostess accepted a settlement offer of $85,000.

The lawsuit says Pismo’s also received a complaint that “Alvarado was excessively consuming alcoholic beverages while on duty.” After a thorough investigation, it was determined the allegation was true. Alvarado was disciplined again, his bonuses were eliminated and his restaurant account was eliminated, the lawsuit says.

Alvarado was informed in writing not to drink on the job. But after he was caught drinking wine with some waitresses, he was “terminated in order to protect the other employees at Pismo’s,” the lawsuit says.

As manager and part-owner, Alvarado entered into an employee confidentiality and trade-secrets agreement. As part of his duties, he was instructed to get recipes from the executive chef and secure them. But without Fansler’s knowledge, the lawsuit says, Alvarado and an executive chef were using Pismo’s food and kitchen to create recipes that they would use for a competing restaurant.

The lawsuit says the executive chef and Alvarado secretly shared their plans of a new restaurant with customers, investors and vendors. Alvarado and the chef took food and alcoholic beverages from Pismo’s to the homes of the customers, investors and vendors “for the sole purpose of impressing them … for the planned new restaurant,” the lawsuit says.

Fansler found out when “cooks reported that the executive chef would make new food items all the time for Alvarado which were never offered to customers of Pismo’s,” the lawsuit says.

The lawsuit does not identify the executive chef but says he no longer works for Pismo’s.

Wolfe, who represents Alvarado, has already put a dent in Fansler’s lawsuit. She convinced Judge Jeffrey Hamilton to dismiss four claims, including interference with prospective economic advantage and conversion.

In his ruling on Thursday, Hamilton said that Fansler claimed Alvarado’s acts were designed to disrupt relationships between Pismo’s and its customers, investors and business partners. But Fansler has failed to alleged “any actual disruption or any actual harm caused by the the defendant’s action,” Hamilton said.

Though Fansler contends Alvarado stole confidential recipes and proprietary information in the form of management and operating techniques, Hamilton said Fansler has not yet been harmed because Alvarado has yet to use the information.

Hamilton said Fansler has valid claims for breach of duty of loyalty, breach of fiduciary duty, fraudulent concealment and breach of contract, noting that Alvarado failed to turn over the chef-generated recipes and to inform Fansler of his plans to start a new restaurant. As partners, Alvarado had a duty to disclose this information and inform Fansler of any potential conflicts of interest, Hamilton said.

In addition, Hamilton said, the confidential agreement that Alvarado signed required him to serve in the best interest of Pismo’s and “not engage in any activities” that would be detrimental to the restaurant.

This story was originally published June 2, 2017 at 2:13 PM with the headline "Lawsuit: Restaurateur fires partner over sex, booze and stolen recipes."