Labor Dept. Settles Allegations Over BBQ Chain's ESOP

Executives to pay $1 million to employee stock ownership plan, reduce ESOP debt by $14 million.

Published on Feb. 21, 2026

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The U.S. Labor Department has finalized a settlement with the executives of a barbecue restaurant chain, resolving allegations that the company's workers received a bad deal through their employee stock ownership plan (ESOP). The consent order requires the defendants to pay $1 million to the WBBQ Holdings Inc. ESOP, along with a $100,000 penalty to the Labor Department, and mandates that the debt owed by the ESOP be reduced by $14 million.

Why it matters

This settlement highlights the Labor Department's efforts to protect workers' retirement savings and ensure that employee stock ownership plans are properly managed. ESOPs can provide valuable ownership stakes for employees, but there have been concerns about some plans being structured in ways that shortchange workers.

The details

The consent order, signed by Judge Denise L. Cote of the U.S. District Court for the Southern District of New York, resolves allegations that the executives of the barbecue restaurant chain, Herbert Wetanson and Gregor Wetanson, caused the WBBQ Holdings Inc. ESOP to pay an inflated price for the company's stock, resulting in a bad deal for the employee-owners.

  • The settlement was finalized on February 18, 2026.

The players

U.S. Labor Department

The federal agency responsible for enforcing laws related to employee benefits, including employee stock ownership plans.

Herbert Wetanson

An executive of WBBQ Holdings Inc., the barbecue restaurant chain, who was involved in the alleged misconduct related to the company's ESOP.

Gregor Wetanson

An executive of WBBQ Holdings Inc., the barbecue restaurant chain, who was involved in the alleged misconduct related to the company's ESOP.

WBBQ Holdings Inc.

The barbecue restaurant chain at the center of the Labor Department's allegations and settlement.

Judge Denise L. Cote

The U.S. District Court judge for the Southern District of New York who signed the consent order approving the settlement.

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The takeaway

This settlement underscores the importance of proper oversight and management of employee stock ownership plans to ensure that workers' retirement savings are protected. It serves as a reminder for companies with ESOPs to carefully structure these plans to avoid potential conflicts of interest and ensure fair treatment of employee-owners.