A regional manager and major Subway franchisee who allegedly sacked workers from $38 million, has now left the company — which for years turned a blind eye to his actions.
The news comes a month after The Post revealed that the chain was behind the manager who oversees nearly 1,000 restaurants in Northern California despite allegations in court documents that he paid fewer than 3,000 workers.
The manager, Chirayu Patel, now says he will leave the company on November 17 to spend more time with his family, according to a letter sent to restaurants he oversees and seen by The Post. He will still own about 15 restaurants as a franchisee, but will no longer work in the corporate office.
“In the past year, despite all the challenges we’ve faced in our industry, it’s been open to me,” he said in the email. “He showed me the importance of being a good father and that nothing should be more important than family.”
“Now I can finally spend more evenings at home and hopefully learn to play some golf,” he said in the email.
Sources close to Subway told The Post that there is likely to be more to the situation. Patel settled the workers’ lawsuit over the summer.
“Once his claim was settled for $38 million in unpaid wages, he walked away,” said a source close to the matter, speculating on whether Patel left on his own. Subway was not named in the lawsuit, but executives at the Connecticut-based company may have been concerned that keeping Patel on the staff was a liability, according to the source.
Patel claimed he couldn’t pay workers more than the settlement reached on July 30: It amounted to $188 per worker, or $550,000, according to court filings.
The suit alleged that he hardened 2,918 workers on many of his subways from overtime pay, other working hours and meal or rest periods. At one point it owned as many as 70 Subway restaurants in Northern California, but it’s now down to nearly 15.
Patel keeps his own restaurants, but loses the area he runs to Subway as a development agent where he was taking a share of all sales. Headquarters uses agents to sell franchises in a specific area and to oversee compliance with company standards.
It is not clear if Patel was ever given anything by Subway to give up his lands.
Sources close to the situation said Doctor’s Associates, Subway’s parent company, had been aware of the lawsuit since at least 2018. The leaders there seem to have done nothing. CEO John Chidsey – who ran Burger King – has been trying to turn around the sluggish sales trajectory since his arrival in 2019. The company said a recent menu revamp is helping.
Subway did not respond to a request from The Post for comment. On Thursday, a company spokesperson told Restaurant Business, “We can confirm that the Northern California area is moving to another business development group. As the transfer process is ongoing, we are unable to share additional details at this time.”
“We have always conducted our business to the highest metro standards and in accordance with state laws,” Patel told The Post last month. He declined to give further details.
This isn’t the first time Subway has found itself facing alleged labor abuse: In 2013 the US Department of Labor teamed up with Subway to boost compliance efforts after discovering thousands of violations.
From 2000 to 2013 the Department of Labor found 17,000 Fair Labor Standards Act violations in Subway restaurants — more than any other national chain, according to a CNN report at the time.
Meanwhile, Patel was accused of forcing the restaurants he ran out of business in a story in the New York Times in 2019.
It is alleged that Patel sent his inspectors to some restaurants that were competing with him – or that he wanted to buy – to find problems so that he could force them out of business. Violations allegedly included minor infractions such as finding handprints on glass doors or slightly thick cucumber slices.
In his email to franchisees about leaving, Patel said: “I had one goal from day one, I wanted all owners to succeed because without your success I would not have been able to fulfill my role.”
“We may have had occasional disagreements but in the end most of us came together to improve the brand we love. I am really proud of the team we were able to put together and how they became one big family.”
Patel also paid tribute to Subway co-founder Fred DeLuca, who passed away in 2015.
“Finally, we all need to thank Fred for the brand he created for us. We may not have agreed on everything Fred did, but he really created the American dream for so many of us.”