The restaurant business, particularly in New York, is not an arena for gentle souls. Behind every passive-aggressive server wondering if you’ve “dined with us before” is a knife fight for survival. Margins are low, tastes are fickle, and competition is relentless. Things have only grown worse with as the stock market has fallen and web entities like Yelp, Eater and OpenTable have grown in power.
Neither Mr. Chow nor Mr. Morfogen seems to have gotten where they are without breaking a few ramekins. In 2007, Mr. Chow was sued by three former employees for harassment. One, now a partner in Philippe, claimed he had been forced to lie on the floor and humiliated during a staff meeting. The suit also claimed that Mr Chow had failed to pay overtime and distributed tips to ineligible employees through a complicated point system, in violation of labor law. The case was settled out of court for an undisclosed sum.
Mr. Chow could not discuss the case due to the terms of the settlement. Mr. Fields, however, maintained that “Mr. Chow never harassed anyone.”
Meanwhile, several former associates of Mr. Morfogen’s, who declined to speak on the record, were highly critical of his business methods, variously describing him as “manipulative,” “abusive” and “bullying.” More than one called him “the devil.”
“That’s their opinion,” Mr. Morfogen said. “Look, I’m a boss that has 300 employees. I’m not running for a popularity contest, I’m not running for mayor. If I’m a bully I’m a fair bully. That courtroom was full of employees I’ve been good to.”
A former manager of Philippe, Tim Pappas, said working with Mr. Morfogen was “a great experience,” adding, “He gave me an opportunity to shine, and I did.” (Mr. Pappas is set to open his own restaurant, Neraï, in the spot formerly occupied by Oceana.)
Restaurateur Michael Stein, whose late father, Howard Stein, was a nightlife impresario who owned Xenon and Au Bar and later brought in Mr. Morfogen as a partner, told The Observer that Mr. Morfogen once called him screaming. “He threatens he’s going to kill me, saying I stole from Au Bar,” Mr. Stein recalled, insisting that he had done no such thing.
Mr. Morfogen scoffed at the story. “Howard was heartbroken, saying, ‘My son stole from me,’” he said. “I was touched by that. It wasn’t my money. I told Michael, ‘Don’t come back to Au Bar.’ I don’t say ‘kill.’ That’s not in my vocabulary. What I probably said was, ‘If you set foot in here I’ll get a lawyer and have you kicked out.’”
The plaintiffs in Chow v. Chau presented evidence that Philippe may have engaged in “unlawful compensation,” or paying employees under the table. Attorneys deposed a number of workers who pleaded the Fifth Amendment to avoid answering questions about the matter, including Mr. Morfogen’s then-business partner Michael Reda. Ultimately, the judge ruled the allegations prejudicial and irrelevant to the case.
Mr. Morfogen called the charges “allegations” and “smoke screens.” He added, “I’ve been investigated by the IRS, the state sales tax, and our restaurants are still operating, and we have a clean bill of health. A couple of chefs would come in and get cash to go down to Chinatown and buy supplies. That’s the only cash, and now it’s all done by check. But that’s not my area. I run the front of the house. Mike Reda told me he didn’t do it, and I believe him. I was against him taking the Fifth Amendment, but when I asked him why, he said his personal attorney advised him on it.”
(Attempts to contact Mr. Reda were unsuccessful; Mr. Morfogen said he is no longer involved with Philippe.)
“My opinion is the issue was used to intimidate, harass and slander my client,” Mr. Accetta told The Observer, adding, “It’s not relevant to this case.”