11/12/08

Restaurant lobbyist paints bleak picture

Related video: "Employee Forced Choice Act"
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How Congress could foist unions on the restaurant industry

During an interview with Rick Berman, CEO of Washington, D.C.-based Berman and Company, the restaurant industry lobbyist abruptly ends the conversation to take another call. When Berman rings back, he explains it was "a crisis phone call" from a client worried about the Employee Free Choice Act, which President-elect Barack Obama supports. That's just one nail-biting issue for restaurants that Berman says may plague operators as a new administration takes shape.

Does Berman and Company expect to be much busier during the Obama administration?

(Laughs) I don't know if we can become much busier than we are right now. My guess is that there will be far more challenges than we have seen. My hope is that the industry will act in a more pre-emptive fashion so that we are not engaged in as many fire drills as I fear we may be.

You mentioned challenges. For example?

The unionization issue. Attempts to pass the Employee Free Choice Act. In addition to that, the issue of bottom-up unionization, whether they pass it or not, as evidenced by activity against Starbucks by their own employees. There have been other incidents.

Related video: "Employee Forced Choice Act"


What is the immediate fear from unionization?

My fear is that this thing will pass or fail by a one-vote margin in the Senate.

Why won't it pass more easily given the new Democratic majority?

Just looking at math and politics, the vote will either be 59 votes in favor, which means it goes down. Or 60 votes in favor, which means it passes. Obama has pledged to sign it.

What are the implications of its passage?

Everyone from QSR to institutional food to table-service restaurants to family table-service to fine dining are all in the unions' cross hairs. Companies with heavy franchised operations are not immune.

Why would they assume to be immune?

Thinking that if you have a lot of franchisees, it's a greater hassle for the union to organize it because [the union] would have to do it company by company. Anyone who thinks a heavily franchised system cannot be unionized is whistlin' past the graveyard.

How do you see union activity unfolding?

I do have some sense of where they are going first. But I can't give you this information in this interview. It is proprietary.

You've spent lots of time defending the industry against animal-rights activists. Will animal-rights advocates be more emboldened to attack restaurants given the progressive-leaning administration-elect?

The biggest change isn't in the change in the administration but the change in the [non-governmental organization] community. The Humane Society is taking more of a role, and groups like PETA are fading into the background. HSUS is really the same as PETA but with a more expensive wristwatch.

Are they the same people?

[The Humane Society] has some of the same attitudes and goals. But they seek to get there with more sophisticated campaigns, and they have far more money. They are aware of what it takes to capture public opinion without looking like lunatics.

Which types of restaurants are most vulnerable?

They are not going after restaurants. That's what PETA tries to do. These people are going after the food suppliers and seeking to drive up the cost of production, which will translate into higher prices.

Will this be poultry?

It's poultry, veal, hogs and cattle. Other people are targeting fish. Some of this is done through an animal-rights prism, some through an environmental one, and some through labor and health prisms. But in all cases, the end goal is to drive up the cost of producing food on the plate or to depress consumer demand.

Speaking of health issues, where is menu labelling headed in 2009?

More of these local ordinances will be popping up.

Is that a forgone conclusion, or is there a way to fight back?

There was a way to fight back, but it took a while. There were companies like Wendy's at the forefront, trying to make a change. But there weren't enough [companies] early and it slowed the momentum. At this point, I fear it is very difficult to manage this issue to a satisfactory conclusion.

Does that mean capitulation?

Draw your own conclusions.

What other issues should operators be paying close attention to?

There are the mandated health-care issue, continuing pressure on minimum wage issues and paid sick leave. There is a host of issues that the labor unions would like to achieve--and if they should get beyond successful passage of this so-called Employee Free Choice Act, my guess is they will try to change federal law to allow state governments to pass right-to-work laws.

What can operators do to defend their turf?

This is going to sound self-serving, but we manage several multi-issue coalitions on all these issues. If people want to participate in them, they only need to pick up the phone. Our job is to look over the horizon and anticipate the evolution of an issue, find forward-thinking people that understand early is better than late, and then put a pre-emptive plan in place.

- David Farkas, Senior Editor - Chain Leader

(chainleader.com)

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