Welcome to Government Watch, a weekly Restaurant Business column focused on regulation, legislation, labor mandates and other governmental issues of relevance to the restaurant industry. This week's edition looks at how political preferences are evolving in the restaurant business and what the next battle on joint employer is shaping up to be.
In the topsy-turvy current state of politics, a scorecard may not be enough to clarify where traditional adversaries stand on issues of significance to restaurants. The situation is too jumbled.
Take what happened last week in Massachusetts, one of the states that kicked off the crackdown on server liability in the 1980s and ‘90s. Forty years ago, the Bay State set a model for other jurisdictions by banning happy hour drink promotions, a convention that had undoubtedly worked. Indeed, it worked too well, in the opinion of lawmakers, who outlawed the deals, citing several high-profile fatal car accidents that were traced to patrons being overserved. Restaurateurs yelped, but such was the new reality.
Last week, state legislators offered to undo that chapter. A bill to give local jurisdictions the ability to bring back post-work drink promotions was introduced by Democratic state Sen. Julian Cyr, whose family had owned and run restaurants. He contended that the resurrection of two-for-one drink specials and the like would temper Massachusetts’ reputation as a puritanical state where some fun could still be found.
Cyr noted that Massachusetts is now the only state to still have a full happy hour ban on the books.
But the proposal went nowhere—in large part because of opposition from the restaurant industry.
Representatives of the trade contended that the bill would do nothing but hurt their margins. They attested that they’d rather use discounted foods as post-work lures rather than drop what they get for cocktails and other alcoholic beverages.
Meanwhile, Republican presidential candidate Donald Trump learned that a critical labor force hasn’t been swayed by the ex-president’s promise to stop taxing restaurant workers’ tips as income. On Monday morning, the hospitality union Unite Here endorsed presumptive Democratic candidate Kamala Harris for the U.S. presidency. It promised to knock on 3.3 million doors in a get-out-the-vote push for the current vice president.
Trump had also tried to curry favor with labor by giving stage time during the Republican National Convention to the president of the United Brotherhood of Teamsters, Sean O’Brien. It was the first time an official of the union had spoken at the Republican’s convention.
But labor wasn’t swayed. The AFL-CIO, the labor congress that includes Unite Here, has also endorsed Harris, as has the United Auto Workers Union.
Battle over joint employer redefinition just won’t die
Weeks after a federal court blocked yet another attempt to hold restaurant franchisors responsible for the labor actions of their franchisees, the battle is back on.
The Biden administration has re-nominated the leading proponent of the joint-employer redefinition to remain chairman of the National Labor Relations Board, the regulatory body that wants to redefine the labor accountability of franchisors. If Lauren McFerran is confirmed again by the Senate as head of the Board, efforts to broaden franchisors’ accountability are virtually certain to resume.
The International Franchise Association has termed a rebuff of McFerran’s nomination “mission critical.” The group urged senators via letter to deny her the job.
“As the architect of the ill-advised, expanded joint employer rule, NLRB Chair Lauren McFerran has proven she is no friend of franchising,” Michael Layman, SVP of government relations and public affairs for the IFA, said in a statement. “We call on members of both parties to halt her nomination and pave the way for fresh, commonsense leadership at the NLRB, not someone committed to the agenda of powerful special interests and union bosses.”
If McFerran is re-confirmed, she would lead the NLRB through 2026.
NYC lawmakers back away from changes for hotel restaurants
The common practice in New York City of having outside parties run in-hotel restaurants and bars won’t be complicated as the industry had feared by a law affecting the operation of lodging properties within the city.
The New York City Hospitality Alliance announced Friday that the proposed legislation had been amended by its principal sponsor to preserve the status quo. Had the law been passed in its original form, food and beverage operations run by contracted third parties would not have been allowed to hire their own staffs. The workers would have to be employees of the hotel. Even then, the outside contractor could not manage the workers unless half the host hotel’s total workforce was unionized.
The Alliance said it looks forward to working with the bill’s principal author, Council Member Julie Menen, on other legislation that could affect small businesses.
North Carolina cracks down on sales-tax assessments
North Carolina is going after restaurants that fail to pay sales tax on credit card surcharges, according to the North Carolina Restaurant & Lodging Association. The group has alerted members that the state Department of Revenue is auditing establishments that levy an extra fee on tabs. Under state law, those revenues are subject to sales tax just as the charges for food and beverage are. The revenuers are checking to ensure operators don’t include the surcharges, even unintentionally.
Tomorrow’s chefs drop in on the Bidens
ProStart champions with White House Executive Chef Cristeta Comerford. | Photo courtesy of the Delaware Restaurant Association
The high school team that won the culinary component of this year’s National ProStart Invitational competition had a chance to visit the home of some well-known fellow Delawareans when they were invited to the White House recently by First Lady Jill Biden. The five youngsters from Caesar Rodney High School in Camden, Delaware, had a chance to meet with White House Executive Chef Cristeta Comerford, the first woman to ever hold that job.
The five—Ralph Figueroa, Shannon Powell, Carys Raber, Zoe Rowe and Melia Stamper—were accompanied by teacher Riki Senn; coach and mentor Tom Hannum; and Delaware Restaurant Association CEO Carrie Leishman.
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