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Yakuza Owner Dayna McErlean Walks Away from Restaurants Following Accusations of Mismanagement

The izakaya will move into the former Nonna space

A large mural of a tiger covers the wall of Yakuza, with long, communal tables in the dining room
The dining room at Yakuza
Yakuza/Official

Restaurateur Dayna McErlean, the owner of Killingsworth restaurants Yakuza, DOC, and Nonna, will step away from day-to-day operation of her businesses. Nonna, an Italian tavern and restaurant, closed in September of 2019, and has sat vacant, excluding the occasional event, since. Yakuza, a non-traditional izakaya which first opened in Portland in 2006, will move into the former Nonna space, eventually becoming a worker-run collective; DOC will likely permanently close.

McErlean’s decision comes after various claims about how the businesses were run were posted on the anonymous Instagram account 86dlist. In four posts on the account, purported employees or former employees allege that paychecks and checks to vendors would regularly bounce, that employees had to pay vendors out-of-pocket, and that while McErlean famously appended a 3-5 percent “health and wellness charge” to each customer check, some workers were unable to acquire health insurance through the restaurant.

McErlean announced Yakuza’s move to the Nonna space in a newsletter, saying that the vegan restaurant, Ichiza Kitchen, would take its place starting September 1. The newsletter, however, does not mention that she’ll effectively be stepping away from her restaurants. Speaking with Eater Portland, McErlean attributes the decision to leave the business to the financial impacts of the coronavirus, a years-long desire to get out of the industry, and the claims posted on the Instagram account.

McErlean acknowledges that the restaurants bounced checks and sometimes required employees to use cash or their personal Venmo accounts for expenses, as alleged in the 86dlist posts, but claims those employees were reimbursed. “Yes, checks bounced, but I always paid my purveyors... I’ve always paid my employees, and I’ve always made it right,” McErlean says. “If I owe anyone anything, they can send me a receipt and I will pay them. If we ran out of something, we would send somebody to a New Seasons, and I’d pay them back. I don’t think that’s uncommon.”

McErlean says that supplier checks bounced because there wasn’t enough money to pay people during slower months. She notes that the claims made about money being misallocated are based on perceptions of the restaurants’ more prosperous months, and do not account for how money was managed during downturns. Money made during busy periods was paying off past bills, or rolling over into future slow months, she claims. “People saying, ‘There’s more money coming in, she’s skimming off the top’ — there’s no top,” she says.

She says that issues with underpayment of employees had to do with management or issues with clocking out. “I’m no way a perfect employer, I make a lot of mistakes, and I can own my mistakes,” she says. “I feel like I probably have been misrepresented through past management, I think that’s unfortunate.”

The bounced checks, however, affected more than the suppliers: Employees said it affected their health insurance. McErlean’s restaurants added a 3 or 5 percent health & wellness fee to customer bills to pay for that insurance coverage starting in 2015, depending on the restaurant. However, Sarah Egeland, a former manager of the restaurant group, told Eater Portland that health insurance lapsed on multiple occasions because of a lack of payment.

“I really wanted to protect my staff,” Egeland told Eater Portland. “I appreciate the people who worked for me. I don’t know, there’s just so many things that I don’t even know where to begin.” Multiple posts on 86dlist also claim that many employees didn’t actually have access to benefits. “She continually changed policy in regards to how many hours each staff member had to work to have access to this benefit,” one post reads. “She also let this benefit lapse multiple times due to non payment of benefits / and or (sic) bounced checks.” Another post alleges that one employee was working around 50 hours per week, but was often only getting paid for under 40 to not qualify for those benefits.

McErlean denies that employees did not have access to insurance, saying that all employees who worked 20 hours or more had the option to enroll in the company’s insurance plan after 60 days of employment. According to McErlean, the company averaged 30 to 40 employees per year; in 2016, 21 employees had health insurance. By 2020, that number was down to three total because of the pandemic shutdown and closure of Nonna, though Yakuza began to hire people back last month. McErlean denies that the policy ever lapsed, but admits “it was often paid on the deadline day.”

Egeland also alleges that McErlean insured family members as if they were employees of the company, echoing claims on 86dlist that McErlean prioritized insuring family members and herself instead of employees. McErlean says her sister, nephew, and partner had been employees of her restaurants at some point, and were only insured while they worked for the company.

Employees say they felt frustrated with what was happening in the dining room, as well. They claim McErlean frequently brought family and friends — including Grant Chisholm, who is best known as a hyper-conservative, Trump-supporting street preacher and counter protestor the Daily Beast once called “The Hipster Fred Phelps” — to the restaurants to eat for free, which put undue pressure on a stressed staff.

McErlean denies that she would dine for free, but confirms that Chisholm, who collaborated with McErlean on the design of the Colony, and is a longtime friend, was one of her regular guests. McErlean says she feels frustrated by the implication that her association with Chisholm should impact her business. “I just think it’s outrageous,” she said. “Because I associate with this person, I’m guilty by association?”

For some consumers, that is true: In the eyes of many Portlanders and diners across the country, associations are a factor in deciding which restaurants or businesses to visit or support. When Provenance founder Gordan Sondland was criticized for his associations with Trump, ice cream company Salt & Straw pulled its products from the company’s hotels, because the ice cream brand’s founders didn’t want to be associated with Sondland. When Nancy Rommelmann, the wife of Ristretto owner Din Johnson, released YouTube videos condemning the women speaking out during the #MeToo movement, regulars stopped showing up to the cafes.

Regardless, McErlean is in the process of leaving her restaurants and ending a nearly 15-year era of influence over that section of NE Killingsworth, with the intention of selling Yakuza and letting the kitchen team, which includes chefs Devin Jacobson and Caitlin Heringer, run the restaurant. Those two will move into the Nonna space, where Yakuza will stick to takeout and delivery; customers could, theoretically, dine onsite in the main plaza space on that street. Celebrated vegan restaurant Ichiza Kitchen will take over Yakuza’s current restaurant space, just a few feet away. The Colony will close in November, when its lease ends.

Yakuza [Official]
Yakuza [Newsletter]
86dlist [Instagram]

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