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Unionization Threatens US Restaurant Profits · Choppin’ It Up by Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to Chopping It Up, Episode six. I'm your host,
• 0:03
  Speaker 1: Michael halens In, your restaurant and food service analyst at
• 0:05
  Speaker 1: Bloomberg Intelligence. Today I'm joined by Riley Logison and Jonathan Sack. Uh.
• 0:12
  Speaker 1: This is part two of of last week's discussion about
• 0:15
  Speaker 1: the fast Act and unionization of the restaurant industry. Um. So,
• 0:20
  Speaker 1: as I mentioned last week, Riley as a shareholder and
• 0:23
  Speaker 1: chair of the Global Restaurant Industry Group at Greenberg Greenberg
• 0:27
  Speaker 1: tro rig tongue twister there, and Jonathan is also a
• 0:30
  Speaker 1: shareholder at the firm. Uh. You know, thanks for your time, gentlemen.
• 0:36
  Speaker 1: Thank you make great to be here. Alright. So, uh,
• 0:41
  Speaker 1: with the US approval of labor unions now it's seventy one.
• 0:45
  Speaker 1: I was just reading that it was the highest point
• 0:47
  Speaker 1: since nineteen sixty five. We have a very union friendly administration. Uh,
• 0:52
  Speaker 1: we're seeing unions unionization efforts increase across the country. You know,
• 0:57
  Speaker 1: restaurants are low margin, uh, and their employe these have
• 1:00
  Speaker 1: historically fought back against unionization. They have not been a
• 1:03
  Speaker 1: very easy group to organize. So why are they targeting
• 1:08
  Speaker 1: targeting this industry so aggressively? Aggressively and and why are
• 1:12
  Speaker 1: they targeting Starbucks and Chipotle, two companies you know that
• 1:15
  Speaker 1: we cover that have a long history of treating their
• 1:18
  Speaker 1: employees better than most of their peers. Well, there is
• 1:23
  Speaker 1: a there is a very um significant uptick in n
• 1:29
  Speaker 1: l RB union election filings across the country and across industries,
• 1:34
  Speaker 1: and that that includes restaurants. The in a in a
• 1:37
  Speaker 1: well reported statistic, the n l r B M reported
• 1:41
  Speaker 1: earlier this year that union election filings are up fifty
• 1:45
  Speaker 1: seven percent over a six month period relative to the
• 1:49
  Speaker 1: year prior. UM that statistic came out in March or
• 1:54
  Speaker 1: maybe April around then. I would think that I would
• 1:56
  Speaker 1: think that that number is it has gone up a
• 1:59
  Speaker 1: lot um and driven driven largely by restaurant industry UM
• 2:05
  Speaker 1: in l RB elections that UM that that uptick, it's
• 2:10
  Speaker 1: it's much more acute as in areas of the country
• 2:14
  Speaker 1: like the South and the Rocky Mountain states and industries
• 2:17
  Speaker 1: like restaurants that that historically have been more resistant to
• 2:22
  Speaker 1: UH to unionization. UM. We think there's a number of
• 2:26
  Speaker 1: factors that are driving this, that are driving this trend.
• 2:30
  Speaker 1: One UM the social justice demonstrations over over the past
• 2:34
  Speaker 1: past two years around me Too and blm UM made
• 2:38
  Speaker 1: more popular the notions of protests and challenging the status quo,
• 2:44
  Speaker 1: particularly among among younger segments of the population UM that
• 2:48
  Speaker 1: historically have comprised the bulk of UM restaurant the restaurant
• 2:52
  Speaker 1: industry workforce. President biden Um campaigned in part on strengthening
• 2:58
  Speaker 1: organized labor. He has delivered on that promise UM in
• 3:02
  Speaker 1: one way by appointing former former union officials to the
• 3:07
  Speaker 1: top posts that run that run the n l R
• 3:09
  Speaker 1: b UM. Yeah, and then there's then there's a lot
• 3:12
  Speaker 1: a lot of it is driven by the pandemic UM
• 3:15
  Speaker 1: and as we and as we emerged in where to
• 3:17
  Speaker 1: have a post pandemic nation, So frontline workers who had
• 3:22
  Speaker 1: to who had to had to show up to the
• 3:24
  Speaker 1: workplace every day, feel feel undervalued. That's what they're That's
• 3:29
  Speaker 1: what they're reporting. At least as UM as they're higher
• 3:32
  Speaker 1: paid office employees worked from home and and earned a
• 3:35
  Speaker 1: lot more money while while working from the safety of
• 3:38
  Speaker 1: their home during the pandemic. A lot of the frontline workers,
• 3:41
  Speaker 1: including in restaurants, report that they that they have not
• 3:45
  Speaker 1: benefited or shared in need in the country's economic economic
• 3:49
  Speaker 1: success and growth over the past several years. UM and
• 3:53
  Speaker 1: this is all all culminated in an effort that to
• 3:57
  Speaker 1: to make union organizing cool. UM their Time magazine recently
• 4:02
  Speaker 1: named the Amazon labor union leaders Chris Smalls and and
• 4:06
  Speaker 1: Derek Palmer to their one hundred most Influential People list
• 4:09
  Speaker 1: of Also on that list are are our household name
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  Speaker 1: celebrities Mary J. Blige, Pete Davidson, UM Sarah Sarah, Jessica Parker,
• 4:20
  Speaker 1: well known popular politicians. UM and it quoted the quoted
• 4:24
  Speaker 1: Mr Mr Smalls as UM as saying as saying making
• 4:28
  Speaker 1: it cool to organize as as one of as one
• 4:31
  Speaker 1: of his goals. UM And So that's so there's a
• 4:35
  Speaker 1: number of social factors probably others too, that are contributing
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  Speaker 1: to the contributing to this uptick in in union organizing.
• 4:43
  Speaker 1: And then economically there's very high inflation, labor shortage, supply
• 4:49
  Speaker 1: chain issues that have that have been UM that have
• 4:52
  Speaker 1: affected restaurants significantly. Those are all causing UM employee employees
• 4:58
  Speaker 1: to to do more with us. Yeah, and Mike, you know,
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  Speaker 1: it's been really hard to be a restaurant employee during
• 5:06
  Speaker 1: the pandemic across the entire country with staffing shortages. UM
• 5:10
  Speaker 1: it's been hard to be a restaurant owner and operator
• 5:13
  Speaker 1: as well, and everybody has been required to adjust. But
• 5:18
  Speaker 1: the staff being shortages at restaurants, and especially why are
• 5:23
  Speaker 1: some of these businesses being targeted. They are the better employers.
• 5:26
  Speaker 1: They are those that have been known for for treating
• 5:28
  Speaker 1: employees better. And these are in place I want to stay.
• 5:30
  Speaker 1: They want to work there, They don't want to go
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  Speaker 1: somewhere else. But as as Jonathan said, you know, they
• 5:36
  Speaker 1: feel that they should be treated better. And the organizers
• 5:39
  Speaker 1: behind this, as we talked about, you know, the last
• 5:42
  Speaker 1: week's episode with with the Fast Act, they've been very
• 5:45
  Speaker 1: smart and savvy. So they're they're hitting the right notes
• 5:48
  Speaker 1: at the right time with the right audience under the
• 5:51
  Speaker 1: right circumstances. And you know that's why we're seeing this
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  Speaker 1: this very unique and significant change from what we had
• 5:58
  Speaker 1: ever experienced previously. Yeah, that's an interesting point, right, Like
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  Speaker 1: Starbucks and Chipotle are almost the victims of their own
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  Speaker 1: success in that way that that you know that they
• 6:08
  Speaker 1: have employed, they have had, you know, an employee base
• 6:11
  Speaker 1: that has stuck around that they've treated well, and they
• 6:14
  Speaker 1: um you know, contribute to college tuition and give better
• 6:18
  Speaker 1: benefits than their peers, and so employees do stick around
• 6:22
  Speaker 1: in an industry where employees tend to be very very transitory,
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  Speaker 1: and they don't want to pay dues historically because they figure,
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  Speaker 1: you know, this is just a very short term gig
• 6:31
  Speaker 1: for me, right, and my John can touch on this,
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  Speaker 1: but that's a precise reason why they're targeting these employers
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  Speaker 1: as opposed to who you might think franchise fast too,
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  Speaker 1: because you know, on how you unionize a location, you know,
• 6:46
  Speaker 1: it requires John will tell you an employee vote, and
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  Speaker 1: if employees aren't around, they're not gonna be their vote.
• 6:52
  Speaker 1: But for those employers what people have been there for
• 6:54
  Speaker 1: a long time and want to stay they are. Yeah,
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  Speaker 1: it's interesting and another point to uh, you know the
• 7:02
  Speaker 1: fact that the left um you know, you mentioned this
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  Speaker 1: last week, Riley, that that um, you know, some of
• 7:08
  Speaker 1: these groups have been playing the long game, right, and
• 7:10
  Speaker 1: so part of it is the left UM has done
• 7:13
  Speaker 1: a good job of controlling the culture, right, so you know,
• 7:17
  Speaker 1: putting union organizers on Time magazine, right, and like by
• 7:22
  Speaker 1: by controlling a lot of the um messaging out of
• 7:26
  Speaker 1: these media outlet's, it's definitely become an advantage for them
• 7:29
  Speaker 1: and they're they're weaponizing it absolutely. UM. So what do
• 7:34
  Speaker 1: you too think about the Starbucks? About Starbucks efforts so
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  Speaker 1: far to head off unionization at that chain, well, UM,
• 7:44
  Speaker 1: you know they're they're not working particularly well as the
• 7:47
  Speaker 1: as the numbers suggests. There's my account is about two
• 7:52
  Speaker 1: Starbucks locations have voted to unionize. And that's that's in
• 7:56
  Speaker 1: addition to the approximately three and forty more locations where
• 8:02
  Speaker 1: the where the union. UM it's mostly Workers United, which
• 8:06
  Speaker 1: is a Service Employees International c i U affiliate UM
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  Speaker 1: has filed for has voled for more votes at other stores. UM.
• 8:15
  Speaker 1: And you know that that's all since since about late
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  Speaker 1: so UM a very remarkable play, a very remarkable pace
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  Speaker 1: for UM. For for this to have happened just just
• 8:25
  Speaker 1: at one employer alone. UM. You know it's it is
• 8:28
  Speaker 1: difficult to stem the tide of labor organizing once it
• 8:32
  Speaker 1: is underway. And UM, as as Riley alluded to, UM,
• 8:37
  Speaker 1: there's you know, there's there's a couple of reasons why
• 8:40
  Speaker 1: that's why that's difficult. One is the UM the under
• 8:45
  Speaker 1: the n l RB's election process, UM, the union first
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  Speaker 1: needs to gather gather authorization cards from thirty at least
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  Speaker 1: thirty percent of the employees it's trying to trying to organize,
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  Speaker 1: and then it files it files a petition for election
• 9:00
  Speaker 1: and based on those cards, and then once that petition
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  Speaker 1: is filed, the the election happens. Happens pretty quickly with
• 9:08
  Speaker 1: then within a matter of weeks weeks or maybe a
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  Speaker 1: little bit longer than in some cases, but but usually
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  Speaker 1: usually pretty quickly. So once that once that petition is filed,
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  Speaker 1: there's not a lot of time for for the employer
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  Speaker 1: to change employees hearts and minds um And then legally,
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  Speaker 1: the the n l r A significantly limits employer's ability
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  Speaker 1: to change wages, benefits, scheduling practices, and and other and
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  Speaker 1: other working conditions that may have caused employees to organize
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  Speaker 1: in the first place. Once the employer is aware of
• 9:41
  Speaker 1: the is aware of the union campaign, the law generally
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  Speaker 1: makes of them awful um for employers to try to
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  Speaker 1: improve or worsen um wages as an effort to influence
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  Speaker 1: how employees might feel about a union or my or
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  Speaker 1: my vote in an election, which all underscores that that
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  Speaker 1: it is important for employers to act um promptly and
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  Speaker 1: to act now before before they haven't acted organizing drive underway.
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  Speaker 1: And it was interesting because Starbucks, you know, they raised
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  Speaker 1: their wages for their employees in non unionized stores, and uh,
• 10:23
  Speaker 1: you know, I guess if you want to have any
• 10:24
  Speaker 1: comments about that strategy, I mean, the union kind of
• 10:28
  Speaker 1: countered pretty quickly. I was like, oh, we agree to
• 10:30
  Speaker 1: that as well, So you know, why can't you, um,
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  Speaker 1: you know, issue raises across the system, you know. Um,
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  Speaker 1: I thought that was a curious, uh, a curious way
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  Speaker 1: to kind of combat it. And and I thought, you know, um,
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  Speaker 1: you know, the unions had a good answer to it. Yeah,
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  Speaker 1: I mean at Starbucks and at other other employers, both
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  Speaker 1: within and outside of the restaurant sector. It's you know,
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  Speaker 1: there's there's the standard standard age, old issues that that
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  Speaker 1: employees and union site as reasons why why union is necessary.
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  Speaker 1: Better pay, more predictable scheduling, better benefits. But it's UM
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  Speaker 1: and that this ties into what I was what I
• 11:14
  Speaker 1: was discussing earlier about the UM about the rise of
• 11:18
  Speaker 1: about how social justice movements plated into the the current
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  Speaker 1: what we're seeing currently. Uh, it's an employee. Employees site
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  Speaker 1: that they want a seat at the table, and um,
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  Speaker 1: you know, once once collective bargaining with the employers underway. UM,
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  Speaker 1: the unions have no ability to require require the employer
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  Speaker 1: to agree to the union's proposals. But one thing that
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  Speaker 1: a union can do under the under the n l
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  Speaker 1: r A as as it's set up currently is UM
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  Speaker 1: is that they can provide a seat of the table
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  Speaker 1: because the law does require the employer and the union
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  Speaker 1: UM to sit down, to sit down and negotiate in
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  Speaker 1: good faith. So it does it and give employees a
• 12:01
  Speaker 1: mechanism to voice their concerns to management directly. Thanks for
• 12:08
  Speaker 1: that and Starbucks brought up but election tampering recently? Is
• 12:12
  Speaker 1: this a real concern for restaurant chains? And uh? If so,
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  Speaker 1: what can be done to fight it? Well? So the NLRB,
• 12:21
  Speaker 1: it is supposed to be neutral when it is administering
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  Speaker 1: elections and when investigating unfair labor practice or ULP charges,
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  Speaker 1: which are which are allegations that the n l r
• 12:33
  Speaker 1: A has been violated. The problem is that the same
• 12:37
  Speaker 1: agency that investigates alleged misconduct UM also acts as the
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  Speaker 1: prosecutor and its judges are also within the NLRB. And
• 12:48
  Speaker 1: the n lrb's top positions are our political appointees. So
• 12:52
  Speaker 1: under Trump, the board members were UM majority majority um
• 12:58
  Speaker 1: at majority management side backgrounds. And under under President bide In,
• 13:03
  Speaker 1: the n l RB's top positions are are predominantly held
• 13:08
  Speaker 1: by individuals who had significant union side experience. So you know,
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  Speaker 1: this is the this is the structure that Congress set
• 13:16
  Speaker 1: up when it enacted the n l RB um um
• 13:20
  Speaker 1: about ninety years ago. But that structure makes the agency
• 13:24
  Speaker 1: highly prone to allegations of favoritism um and and in fact,
• 13:29
  Speaker 1: it does make it hard for the agency to be
• 13:32
  Speaker 1: to be in fact neutral, much less maintained that maintained
• 13:35
  Speaker 1: that position credibly to the public. You mentioned, um, the
• 13:41
  Speaker 1: allegations in the in the in Starbucks recent letter, So
• 13:45
  Speaker 1: Starbucks alleges that n l RB agents in certain of
• 13:49
  Speaker 1: the agency's regional offices engaged in in quote, highly improper
• 13:54
  Speaker 1: and systemic conduct that that, according to Starbucks, tipped tip
• 14:00
  Speaker 1: the scales in favor of unions when the agency was
• 14:02
  Speaker 1: administering mail ballot elections. So and we can get to
• 14:06
  Speaker 1: discuss what the implication of the mail ballot election in
• 14:08
  Speaker 1: a minute. But the allegations more specifically included u n
• 14:13
  Speaker 1: LRB agents coordinating with with unions to arrange for voting
• 14:17
  Speaker 1: to happen in n LRB offices, giving the union but
• 14:21
  Speaker 1: not the employer, confidential information UM in real time as
• 14:27
  Speaker 1: to as to how the votes were coming in. So
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  Speaker 1: were they were they were they for the union or
• 14:32
  Speaker 1: for the employer, um, which which then then allows the
• 14:35
  Speaker 1: allows the union to UH to target it's it's its
• 14:38
  Speaker 1: campaign efforts while while voting is underway. So those are
• 14:44
  Speaker 1: those are They're just allegations at this point. But um,
• 14:47
  Speaker 1: you know, if if true, it would, um, you know
• 14:50
  Speaker 1: it would it would really seriously undermine the n l
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  Speaker 1: RB's ability to claim that that it is in fact control,
• 14:57
  Speaker 1: particularly in in is voted, one of the most highly
• 15:02
  Speaker 1: publicized union union efforts in recent history. So, um, you know,
• 15:09
  Speaker 1: in a mail ballot election, Um, well, so the mail
• 15:13
  Speaker 1: ball elections are not the are not the presumptive election.
• 15:17
  Speaker 1: The presumptively appropriate form of n RB election is an
• 15:21
  Speaker 1: in person election. UM. In an in person election, there
• 15:25
  Speaker 1: are a number of safeguards that the that the n
• 15:30
  Speaker 1: LRB has in place. It's a pretty pretty sterile voting conditions.
• 15:34
  Speaker 1: There are the n LRB sets up sets up voting
• 15:37
  Speaker 1: boosts UM that look a lot like how we how
• 15:40
  Speaker 1: we all vote in state and federal elections come November.
• 15:44
  Speaker 1: Both sides have a few observers there to monitor the process. UH,
• 15:48
  Speaker 1: and the employers and union representatives have to steer clear
• 15:51
  Speaker 1: of the voting area. There's no electioneering, and campaigning near
• 15:55
  Speaker 1: the voting area is not allowed in a mail ballot election. UM.
• 16:00
  Speaker 1: You know, there is no there's no voting area. UM.
• 16:03
  Speaker 1: Many of those many of those of the safeguards that
• 16:06
  Speaker 1: existed in personal election don't don't apply in an n
• 16:09
  Speaker 1: l RB UM mailbell election. So that that means that
• 16:13
  Speaker 1: there's more opportunities for for both for unions and employers
• 16:18
  Speaker 1: as well as other employees to pressure employees to vote
• 16:22
  Speaker 1: one way or the other. It's interesting. I think most
• 16:27
  Speaker 1: people were hoping that that we've heard the end of
• 16:30
  Speaker 1: mail in ballots, but apparently that that's not the case here. UM.
• 16:35
  Speaker 1: You know, we've written a bit that automation and refranchising
• 16:39
  Speaker 1: are are two ways that restaurant chains can kind of
• 16:42
  Speaker 1: head off unionization efforts. Is UM, can you maybe talk
• 16:46
  Speaker 1: about these two a little bit and maybe UM tell
• 16:49
  Speaker 1: us what else they can do to to um limit
• 16:53
  Speaker 1: unionization in their chains. Well, UM, automation is a is
• 16:58
  Speaker 1: a good point, and we talked a bit about how
• 17:01
  Speaker 1: last week, how the fast Act could lead to an
• 17:04
  Speaker 1: increase in into automation. UM. You know, McDonald's has done
• 17:09
  Speaker 1: a lot on automation historically, it might be ahead ahead
• 17:14
  Speaker 1: of some of the other fast food industries and in
• 17:17
  Speaker 1: adopting that that form of production UM, but you know,
• 17:21
  Speaker 1: automation hasn't hasn't really caught on that much throughout the
• 17:26
  Speaker 1: throughout the restaurant sector, particularly particularly in middle and higher
• 17:30
  Speaker 1: end and higher end restaurants. So there's there there is
• 17:34
  Speaker 1: a good likelihood that that automation will will increase as
• 17:39
  Speaker 1: a result of what we're what we're seeing now, both
• 17:42
  Speaker 1: in terms of increased unionization UM, rising labor costs related
• 17:47
  Speaker 1: to related to the Fast Act and and just to
• 17:50
  Speaker 1: just rising labor costs in general as a result of
• 17:53
  Speaker 1: inflation and and and other labor shortage and other factors UM.
• 17:58
  Speaker 1: So that there are a number of things that that restaurants,
• 18:02
  Speaker 1: UM and and other employers can do to try to
• 18:05
  Speaker 1: to try to reduce the likelihood that their employees will
• 18:08
  Speaker 1: turn to a union because, as I mentioned, UM employees
• 18:14
  Speaker 1: site in addition to better wanting better pay and benefits.
• 18:17
  Speaker 1: They cite UM wanting to have a seat at the
• 18:20
  Speaker 1: table UM as as a reason for unionization. So one
• 18:25
  Speaker 1: thing that employers, including restaurants can do is to ensure
• 18:29
  Speaker 1: that upper management has mechanisms in place to learn of
• 18:33
  Speaker 1: employees concerns UM in real time. And you know, those
• 18:38
  Speaker 1: concerns could be interesting interest in unions, or it could
• 18:42
  Speaker 1: be just complaints about wages, scheduling or or other practice
• 18:45
  Speaker 1: or other practices. Uh. You know, it's important for decision
• 18:49
  Speaker 1: makers to have to know what's going on in the
• 18:51
  Speaker 1: ground uh in order to be able to address address
• 18:55
  Speaker 1: those issues before before they before they metastasize UM in
• 18:59
  Speaker 1: a similar of make make employees feel heard UM. You know,
• 19:03
  Speaker 1: employers don't need a union to h to give employees
• 19:07
  Speaker 1: a voice. So communicate with employees and and ensure that
• 19:11
  Speaker 1: that employees employees feel comfortable communicating with you. Communication communication
• 19:17
  Speaker 1: really does need to be a two way street, UM,
• 19:20
  Speaker 1: and a lot of that, a lot of that has
• 19:22
  Speaker 1: to do with a lot of responsibility falls on on
• 19:26
  Speaker 1: frontline managers. So ensuring that front line frontline managers in
• 19:30
  Speaker 1: the restaurants are comfortable talking with employees about sensitive workplace
• 19:35
  Speaker 1: issues like pay for instance, So that so that when
• 19:39
  Speaker 1: other sensitive workplace topics come up, like unions, there there's
• 19:43
  Speaker 1: already a strong relationship in place. Employees feel comfortable talking
• 19:47
  Speaker 1: to talking to their manager about about sensitive topics, and
• 19:51
  Speaker 1: managers feel comfortable, um, talking with employees about about unions. Um.
• 19:56
  Speaker 1: It's it's important to have that muscle memory already built
• 20:00
  Speaker 1: before there's before there's an active organizing campaign because you know,
• 20:03
  Speaker 1: as I mentioned once, um, once an election, once an
• 20:07
  Speaker 1: election is scheduled, um, the ability to try to change
• 20:11
  Speaker 1: hearts and minds becomes becomes rather limited. I would say
• 20:16
  Speaker 1: for refranchising, Mike, Uh, that's an option, but it's essentially
• 20:21
  Speaker 1: putting the problem in somebody else's pocket. So uh, some
• 20:25
  Speaker 1: brands are looking at that as a strategy. Uh, not
• 20:28
  Speaker 1: necessarily a bad one, because we're not seeing as much
• 20:31
  Speaker 1: activity at franchise locations. Most of it, at least for now,
• 20:34
  Speaker 1: has been focused on company on locations. So it can shift,
• 20:38
  Speaker 1: uh the issue to a franchise, but it doesn't necessarily
• 20:43
  Speaker 1: solve the able all issue. Yeah, and potentially you know,
• 20:46
  Speaker 1: you might get less for a refranchise store at that
• 20:49
  Speaker 1: point if if the purchaser has the factor in the
• 20:51
  Speaker 1: potential for unionization. UM. And the point you made John
• 20:55
  Speaker 1: about McDonald's it was a great one. I mean, they've
• 20:58
  Speaker 1: spent a lot of money over the last few years
• 21:00
  Speaker 1: implementing kiosks, UM, implementing back of the house technology that
• 21:05
  Speaker 1: reduces the amount of steps so an intern it reduces
• 21:10
  Speaker 1: the amount of employees you need in the kitchen. And
• 21:13
  Speaker 1: I think we're going to see these things become more
• 21:15
  Speaker 1: ubiquitous U in California and UM. You know what we
• 21:19
  Speaker 1: saw with server handhelds, which now have been rolled out
• 21:22
  Speaker 1: across the country. UM. You know they allow at a
• 21:26
  Speaker 1: full service restaurant, they allow a server to handle five
• 21:29
  Speaker 1: tables instead of three, so it reduces flate labor on
• 21:33
  Speaker 1: the floor. And you know, five, six, seven years ago,
• 21:36
  Speaker 1: these things were very expensive and when uh you were
• 21:39
  Speaker 1: paying a server just a few dollars in a tipped wage,
• 21:42
  Speaker 1: it didn't make sense. But in Seattle and a l A,
• 21:46
  Speaker 1: in places that had you know, twelve plus minimum wages
• 21:51
  Speaker 1: years ago, that that's where UM, that's where they were
• 21:55
  Speaker 1: implemented first. But over time the technology gets cheaper UM
• 22:00
  Speaker 1: as wages rise. UM. In all the cities that the
• 22:03
  Speaker 1: r O I starts to make more sense. So, um,
• 22:06
  Speaker 1: it just it just makes sense that automation is going
• 22:08
  Speaker 1: to be probably the most used tool to to kind
• 22:13
  Speaker 1: of um pushing themselves against unionization. Yeah, and Mike a
• 22:18
  Speaker 1: real life example. I live in the city of Portland, Oregon,
• 22:21
  Speaker 1: which is one of the most challenging markets in the
• 22:24
  Speaker 1: country in which to operate a restaurant one or more expensive,
• 22:28
  Speaker 1: and automation has really taken hold at a number of
• 22:31
  Speaker 1: locations where you'll see you know, toast for example, uh,
• 22:35
  Speaker 1: ordering everything from your phone through a toast system with
• 22:39
  Speaker 1: a very limited staff, no actual table service, just uh,
• 22:44
  Speaker 1: you know, bringing and buzzing um. And you know, all
• 22:47
  Speaker 1: these efforts to reduce labor uh and utilized technology to
• 22:53
  Speaker 1: maintain profitability. So uh, I think there's the business is
• 22:57
  Speaker 1: going to evolve to to serve live. I think what
• 23:01
  Speaker 1: we lose from that, though, you know, is the hospitality
• 23:04
  Speaker 1: aspects and jobs and the other things that are so
• 23:07
  Speaker 1: important because the jobs that are being lost here the
• 23:10
  Speaker 1: restaurant industries employee for some of the most important people
• 23:14
  Speaker 1: in the country, those at the bottom of the income
• 23:19
  Speaker 1: levels who really need the jobs more than anyone, and
• 23:22
  Speaker 1: It's an industry that provides a pathway for opportunity to
• 23:25
  Speaker 1: everyone and has for decades, and to see that being
• 23:29
  Speaker 1: reduced or eliminated by these policies is really hard hard
• 23:34
  Speaker 1: to take. And the team uh, and young adult unemployment
• 23:37
  Speaker 1: rates in the state of California, you know, in Brooking
• 23:40
  Speaker 1: says to study there are significantly higher than anywhere else
• 23:44
  Speaker 1: in the country. You see the same in every state
• 23:46
  Speaker 1: you know that has implemented these policies. With increasing wages
• 23:50
  Speaker 1: and unionization efforts, the doors to opportunity are being closed
• 23:53
  Speaker 1: to a lot of people. And that's we see the
• 23:56
  Speaker 1: consequence of that. We see people not working, we see
• 24:00
  Speaker 1: you know, more crime, we see more other other issues
• 24:03
  Speaker 1: that all these cities are dealing with. So hopefully come
• 24:06
  Speaker 1: since prevails and you get to a place, you know
• 24:08
  Speaker 1: where restaurants continue to be a path for opportunity for everyone. Yeah,
• 24:12
  Speaker 1: it's it's uh, it definitely is is uh unfortunate in
• 24:17
  Speaker 1: some ways, and there's there's always unintended consequences right to
• 24:20
  Speaker 1: any um policy pushes, policy changes and things of that nature. Uh.
• 24:26
  Speaker 1: You know, Riley, last time we spoke, you suggested that
• 24:28
  Speaker 1: unions could come for Chipotle next. So don't get a
• 24:31
  Speaker 1: big head, but it was a very prescient call. So
• 24:35
  Speaker 1: is it safe for me to assume that unions are
• 24:37
  Speaker 1: going to prefer to organize that companies that own a
• 24:39
  Speaker 1: majority of the restaurants. We kind of touched on that already.
• 24:42
  Speaker 1: And Uh, I guess what else? What else are they
• 24:44
  Speaker 1: looking for? Uh? In the target? Well, I think it's
• 24:48
  Speaker 1: it's uh Jonathan mentioned earlier. Uh, you know, the ability
• 24:52
  Speaker 1: to unionize uh, a location they don't want to Unions
• 24:56
  Speaker 1: don't want to spend their time or effort and trying
• 24:58
  Speaker 1: to unionize a location where the emloyees are not going
• 25:00
  Speaker 1: to be there through the voting process. Uh. It makes
• 25:05
  Speaker 1: much more sense to focus on locations where uh, you know,
• 25:09
  Speaker 1: with a good employer, where employees have been there, where
• 25:11
  Speaker 1: they want to stay there, and get them to rally
• 25:14
  Speaker 1: around the sales pitch that the unions are making to
• 25:17
  Speaker 1: them and those not to say that franchise locations camp
• 25:21
  Speaker 1: because there's a lot of terrific franchised restaurants out there,
• 25:25
  Speaker 1: but focusing on you know, the big names like they
• 25:29
  Speaker 1: have been Starbucks, ri Pteley, and and we'll be seeing
• 25:32
  Speaker 1: others as well. You know, those are the more likely candidates.
• 25:36
  Speaker 1: And so if they can achieve that, like we talked
• 25:38
  Speaker 1: about in the last episode, there's a two prom approach
• 25:40
  Speaker 1: unionization efforts hitting these company owned locations, the fast act
• 25:46
  Speaker 1: hitting you know, these other aspects of the industry. And
• 25:50
  Speaker 1: then the overall purpose of the union is to have
• 25:52
  Speaker 1: a unionized workforce, you know, throughout the entire country of
• 25:55
  Speaker 1: all restaurants. And that's not something they've hidden. And so
• 25:58
  Speaker 1: their their approaches strategy is is very smart. Uh. They're
• 26:02
  Speaker 1: very well corded, they're very well funded, and they're they're
• 26:05
  Speaker 1: executing very well right now. And uh, you know, the industry,
• 26:08
  Speaker 1: you know, needs to take steps to really you know,
• 26:11
  Speaker 1: see what's going on here and respond accordingly in our
• 26:13
  Speaker 1: in our opinion, that's good stuff. And I think that's
• 26:18
  Speaker 1: a good place to wrap it up. I know I
• 26:20
  Speaker 1: learned a lot, so I'm sure our our listeners have
• 26:24
  Speaker 1: as well. Thank you both so much for your time.
• 26:27
  Speaker 1: Uh and before we go, what's the best way for
• 26:30
  Speaker 1: our listeners to contact you? Oh? This Riley loguson uh
• 26:35
  Speaker 1: Riley dot loguson at green at g T law dot com.
• 26:38
  Speaker 1: I'm in the Greenberg Charge website and they wants to
• 26:41
  Speaker 1: reach out, and Jonathan Sack else also in Greenberg. Charg
• 26:46
  Speaker 1: I can be reached at Sack, J. S A c
• 26:49
  Speaker 1: k J at g T law dot com. Stuff. Thanks,
• 26:54
  Speaker 1: Thanks Mike,