DETAILS ADDITIONAL ALLEGATIONS, RESPONSES.

State workplace regulators say a Tigard-based restaurant chain discriminated against its Thai workers based on their nation of origin.

The Oregon Bureau of Labor and Industries today said

used leverage over workers recruited from Thailand to pay them less, work them longer hours and subject them to less favorable contract terms and working conditions than non-Thai workers.

"Typhoon could have chosen to follow the law and provide equal pay for equal work," Oregon Labor Commissioner

said in a press release this morning. "Instead, the company trapped Thai workers into employment they were afraid to leave and turned that fear into a business advantage."

Typhoon co-founder Steve Kline could not immediately be reached for comment this morning. In the past, restaurant officials have called the allegations "outrageous" and denied violating any employees' rights.

operates restaurants, including

and a catering company, in Portland, Bend,

, Beaverton, Gresham and Redmond, Wash. It also operates three cafeterias at Microsoft Corp. facilities in Washington, state officials say.

Avakian

against Typhoon, accusing it of discriminating against Thai workers and retaliating against employees who opposed or reported the practices. The move was a rather unusual step for a commissioner. The bureau largely investigates complaints filed by workers. Kline then accused Avakian of grandstanding for political gain. Avakian, a former state legislator,

his intent to challenge U.S. Rep.

, D-Oregon.

The bureau will next issue formal charges against the chain alleging discrimination in compensation, terms of employment and conditions of employment, bureau spokesman Bob Estabrook said this morning. The charges would likely seek monetary damages on behalf of the employees, he said.

A hearing would then be scheduled before an administrative law judge. Deputy Labor Commissioner Doug McKean would issue a final order on the case, Estabrook said.

"This is a particularly complex case," Estabrook said. "It's not going to happen as quickly as anyone would like it to."

payroll records showed that among both salaried and hourly-paid cooks, Thai workers brought to the U.S. by Typhoon under special E-2 visas were paid less than U.S. citizen cooks.

It also found Thai workers were intimated into signing unfair employment agreements, transferred between restaurants in different cities with little notice and pressured to work extra hours without pay. It alleges the restaurant failed to provide adequate housing as required under the visa. Investigators found 18 Thai residents living in two apartments and one single-family home.

The investigation is the

of discrimination and tax underpayment against the critically acclaimed restaurant chain.

Six years ago, Typhoon

a federal lawsuit

who alleged, among other things, that the restaurant denied them overtime. Typhoon also sued the couple in Thailand, alleging the two conspired to steal its recipes and had breached their employment contract.

Also in 2004, the restaurant

in back wages to 33 employees to settle U.S. Labor Department charges that it failed to properly pay cooks overtime. The department investigated after an American worker complained about the treatment of Thai employees.

More recently, Sarinya Rearboy accused the restaurant and the Klines in a 2008 lawsuit of violating human trafficking laws, wage-and-hour laws and anti-discrimination and anti-retaliation laws. Typhoon moved to dismiss the suit, pointing to a clause inserted in its employment contract in 2005 requiring all disputes be arbitrated.

U.S. District Judge Ancer L. Haggerty in 2009 found the agreement unconscionable, partly because it required a worker earning $8 an hour to pay thousands in arbitration fees. But in June, the U.S. 9th Circuit Court of Appeals reversed that decision, noting that Typhoon had agreed to pay arbitration costs. The case is now in arbitration.

In December, the Internal Revenue Service and two Oregon agencies

against the chain for $1.5 million in unpaid payroll taxes and penalties.

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