Au Cheval’s Brendan Sodikoff Sues Restoration Hardware for Severance Over Split

Chicago restaurateur Brendon Sodikoff filed a lawsuit Tuesday against the company formerly known as Restoration Hardware seeking more than $710,000 in severance and backpay, plus the option to buy company stock far below its current $4.1 million market value. Sodikoff developed 3 Arts Club Cafe, the restaurant inside RH’s glam Gold Coast store that opened in 2016. He claims RH fired him in August without cause to avoid paying him benefits.

Sodikoff is the founder of Hogsalt, the restaurant group that runs Au Cheval, Bavette’s, and others. The lawsuit was filed Tuesday in federal court in Chicago. Sodikoff claims RH fired him in August without cause after he texted RH chairman and CEO Gary Friedman and told him the company needed to hire someone full time to helm its hospitality division. He offered assistance in finding a replacement, according to the lawsuit. Sodikoff founded the division when the Chicago store opened in 2016. RH in 2018 opened a New York restaurant with Sodikoff called RH Rooftop Restaurant.

Instead of a smooth transition, Sodikoff claims he was abruptly dismissed so RH could avoid paying him what they owed. The company, according to the lawsuit, claimed Sodikoff resigned when he sent the text to Friedman. A resignation — per his contract — would mean Sodikoff isn’t entitled to compensation, according to the lawsuit. Sodikoff sees his departure as a termination without cause and is seeking back pay.

The job was part time so Sodikoff could tend to Hogsalt. It came with an annual base salary of $550,000, according to the lawsuit. Sodikoff claims he’s owed a severance equal to that amount. Sodikoff also earned periodic sales commissions. The lawsuit claims he’s owed $160,000 in commissions from the second quarter of 2019.

The lawsuit claims Sodikoff is also owed stock options. His contract, signed in June 2016, included options to buy 25,000 shares of RH stock per year for a total of 100,000 shares, according to the lawsuit, and so far, Sodikoff has collected 75,000 in vested options. He alleges he’s owed 25,000 more. Sodikoff claims his contract stipulated he was entitled to a purchase price of $25.88 per share, which comes out to $647,000 for 25,000 shares. RH shares are currently valued at $164.95 on the New York Stock Exchange as of Wednesday afternoon. That boosts the current value of those 25,000 shares to $4.1 million. Sodikoff is also is demanding that RH pay an additional 2 percent per month in interest on all unpaid compensation.

Sodikoff, when reached Wednesday afternoon, declined comment and said he and his attorney wouldn’t be making any statements. An RH spokesperson wasn’t immediately reached.

Crain’s first reported the story.