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Nonprofit labor organizers use taxpayer funds, Occupy tactics to attack restaurants for low wages

By   /   August 8, 2013  /   38 Comments

By Eric Boehm | Watchdog.org

HARRISBURG – Labor activists using tactics adopted from the Occupy Wall Street movement are crashing restaurants across the nation in an effort to raise wages for workers – and they’re getting taxpayer money to fund the effort.

Using a combination of federal grants and grants from left-leaning organizations, the Restaurant Opportunity Center, or ROC, is technically a charitable nonprofit and not a union. But their pro-worker messages, anti-employer protests and self-proclaimed goal of organizing service sector employees for the purposes of negotiating higher wages make ROC look and sound much like a labor union.

UNION OR NOT: With the help of unions like AFSCME, the Restaurant Opportunities Center protested an Olive Garden in center city Philadelphia.

Some see their tactics as a deliberate attempt to skirt the nation’s labor laws. Only unions elected by a majority of a workplace can negotiate with employers on workers’ behalf, though ROC seems to be doing so in the absence of any election.

But others, including the head of the AFL-CIO, an umbrella group for dozens of labor unions, see ROC and groups like them as the new face of labor organizing in America.

ROC gets bankrolled with taxpayer cash

While the Restaurant Opportunity Center is working to increase wages for some workers, they are getting paid, in part, with federal tax dollars.

According to tax filings for ROC United, the parent organization that has launched the smaller chapters operating in many cities, the group got $180,000 in government grants during 2010 and another $60,000 in similar grants during 2011.

The organization’s budget was about $1.72 million in 2010 and $2.65 million in 2011 – meaning taxpayer dollars accounted for a little more than 5 percent of their operating costs.

Other funding for ROC’s initiatives comes from the usual left-wing sources, including grants from the Tides Foundation, a group that also gets tax dollars from the federal government, as a previous Watchdog.org investigation uncovered.

Some Republican members of Congress are asking for an investigation into a Department of Labor grant to ROC.

Getting ROC-ed

The group employs disruptive “mic-check” tactics made popular by the Occupy Wall Street movement. Take ROC’s July 25 action at the Capital Grille restaurant in midtown Manhattan.

On that day,  during the usual lunch rush, a signal was given — and more than a dozen protesters stood at their tables and shouted their concerns to all within earshot.  They were calling attention to what they said was an unfair minimum wage law that allows restaurants in New York City to pay their tipped workers only $5 per hour.

“Capital Grille, shame on you. Restaurant workers deserve fair pay too,” they chanted as they were escorted from the dining area.


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It wasn’t only happening in New York.

At the same time, a similar group gathered outside an Olive Garden restaurant in center city Philadelphia.

“If we don’t get no justice, you don’t get no peace,” they chanted in unison.

Across the nation, minimum wage activists rallied outside Red Lobster, Olive Garden and Capital Grille restaurants – all of which are owned by the same parent company, Darden Inc. – to decry corporate lobbying they say puts a lid on the minimum wage for restaurant workers.

But these supposedly grassroots efforts were in fact a well-orchestrated assault launched by ROC and labor union allies in several major cities. Other groups, such as the SEIU-backed Fast Food Forward, are working toward the same goal.

According to the group’s website, ROC began targeting Darden restaurants because the company joins with the National Restaurant Association, to lobby Congress in order to keep wages and benefits low.

Darden Restaurants did not return calls seeking comment.

A similar effort targeting a chain of New York restaurants owned by Chef Mario Batali came to an abrupt halt last year when Batali sought and received a restraining order against ROC.

From humble beginnings to national network

Rather than unionizing a work place and using the collective bargaining process to negotiate with employers, groups like ROC use loud protests designed to attract public and media attention.  They threaten lawsuits and disrupt business.

ROC-ING ALONG: During a 2011 meeting of the National Restaurant Association in Chicago, ROC organized a “flash mob” to protest.

In short, they use techniques that would be illegal if they were an actual union, said Stefan Marculewicz, an attorney who specializes in labor issues.

“Labor organizations by their very existence are supposed to be democratic institutions,” Marculewicz said.  “A majority of the workers have to sign up, or they have the option to not sign up.”

But ROC is not a union. And because they do not have to gain support from a majority of employees at a certain business – as a union world before it could begin negotiating with employers – groups like ROC can make their voices heard and their presence known without officially representing the workers they claim to support.

Maria Myotte, communications director for ROC, did not return calls and emails seeking comment on the organization’s strategy. But in a 2007 interview with the New York Post, one of ROC’s top officials described the practice as “minority unionism.”

“While a union has to go in and organize the majority of a shop to get some kind of collective bargaining agreement, in our case we’ll have a group of workers come in … a small number from a restaurant, and we will ‘organize’ them to create a demand letter, eventually file litigation, protest in front of the restaurant and get press,” said Saru Jayaraman, a co-founder of ROC.

ROC started in New York City to provide community support to the families of restaurant workers killed in the Sept. 11, 2001, terrorist attacks. Now, they claim their goals include organizing workers “to create consequences for ‘low road’ restaurants that employ illegal and other exploitative workplace practices.”

There are more than 200 groups like ROC across the country. They have names like Our Walmart, Warehouse Workers for Justice, and the Food Chain Workers Alliance. There are direct affiliates of ROC now operating in almost a dozen major cities.

And the group is attracting attention from some high-profile figures in the labor movement.

Richard Trumka, president of the AFL-CIO, an umbrella group for dozens of major labor unions, praised Jayaraman and ROC in June during his comments at a gathering of the Labor Research Action Network in Washington, D.C.

The Restaurant Opportunity Center has built a dynamic and expanding advocacy organization in an industry where 40 percent of the workers earn the minimum wage or less,” he said. “Saru is a real pioneer who is demanding answers to the questions that need to be asked about the future of workers.

The AFL-CIO has entered into partnership agreements with several national networks of worker centers and created a procedure under which dozens of worker centers have affiliated with state federations of labor and central labor councils. Trumka said labor unions and work activists should try to “thicken those ties” in coming years.

Boehm is a reporter for Watchdog.org and can be reached at Eric@PAIndependent.com.  Follow him on Twitter @EricBoehm87

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Eric is a reporter for Watchdog.org and former bureau chief for Pennsylvania Independent. He lives in Minneapolis, Minnesota, where he enjoys great weather and low taxes while writing about state governments, pensions, labor issues and economic/civil liberty. Previously, he worked for more than three years in Harrisburg, Pennsylvania, covering Pennsylvania state politics and occasionally sneaking across the border to Delaware to buy six-packs of beer. He has also lived (in order of desirability) in Brussels, Belgium, Pennsburg, Pa., Fairfield, Conn., and Rochester, N.Y. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and elsewhere. He received a bachelor's degree from Fairfield University in 2009, but he refuses to hang on his wall until his student loans are fully paid off sometime in the mid-2020s. When he steps away from the computer, he enjoys drinking craft beers in classy bars, cheering for an eclectic mix of favorite sports teams (mostly based in Philadelphia) and traveling to new places.

  • Patrick Lee

    Sounds like the bosses are getting scared.

  • che

    these people are outrageous thinking they should get a fair minimum wage!! why can’t they make do on a substandard wage like most of americans do and let corporate america reap in the profits?? the nerve of these people!!!

  • Nicholai Bush

    Hooray!!!! Sounds awesome to me. Anything that puts people before profits has my endorsement and support.

  • aldante

    Here’s a real shocker: YOUR NOT SUPPOSED TO BE ABLE TO AFFORD ALL THE BETTER THINGS IN LIFE BY SERVING TABLES!.
    Go get in education and be all that you can be.Maybe then you can earn a living wage.

  • aldante

    If they are a non profit, how the hell did they get money and the tea party conservatives got the shaft? I think we know the answer to that.

  • Sharon

    When wages escalate the way these agitators demand, the price of a meal escalates. How many people will be able to afford more expensive meals? Ultimately, the restaurant will close because most people won’t pay. Then, the employees lose their jobs. 100% of nothing is preferable?

  • TLB

    Restaurants, as a whole, are working on a slimmer profit margin than ever before. Now that this initiative is gaining steam, i wonder how long it will be before MORE restaurants shut down resulting in significant number of joss loss and then what will these left-wing socialists veiled liberals go after next? The ultimate goal is for ALL make the same amount of money. Sounds socialistic, don’t you think? Marx would be proud of them.

  • Sharon

    I agree. Our “wonderful” government wants us all to be EQUALLY DESTITUTE! But those at the top will continue their lavish lifestyles. We couldn’t ask them to share the pain could we? Anyone who believes it couldn’t possibly happen that way have never read history, and are not aware it’s happening right now with the usurper-in-chief and the First Wookie.

  • imjustmusing

    So let’s see, if the restaurant workers get higher wages, does that mean we can only tip say, 10%?

  • monacall

    if I owned any of these companies I would shut them down…..for about 6 months….then I would re-open…in a different city under a different name…..I would close the doors…..might as well. your going to anyway if they get what they want….you wont be able to afford the food or help….so just save the grief and close the doors now….pretty simple to me…

  • Sagebrush6

    If these fools would learn how to read, they would see that a huge jump in salaries will kill their jobs. If the cost of eating in a restaurant go up much, people will quit using them and brown bag it. Remember, WE DO NOT HAVE TO EAT IN A RESTAURANT.
    At a cost of about $7.00 a day for a restaurant just for lunch ( plus a tip) & about $1.75 for brown bagging it, the choice is plain. Approx. $1,560 a year more to eat out ? A little better than $125. a month ( your electric bill, cell phone bill, utilities bill, etc.) and more possibilities.

  • Tyro

    If Darden weren’t such uneducated, low-rent losers, they wouldn’t have started businesses that depend on substandard low wages. You have to admit that they’re only in that business because they were too stupid to do anything else in life. Darden isn’t exactly Microsoft… these guys are generally losers.

  • Tyro

    It’s hardly our fault that they start and run low-rent businesses that can’t play decent wages because they were too stupid to figure out how to make money otherwise. If the low-rent trash that runs Darden doesn’t want to face protests, they can find another line of work. Unfortunately, if they could do that, they wouldn’t have started a Red Lobster that depend on wage theft to turn a bare profit. Why should I care if such low-rent bottom-of-the-barrel trash employers face protests?

    Darden is run by losers who are too stupid to figure out how to run a real business. My friends started businesses and everyone had decent wages and health coverage. Why? Because they started interesting, innovative businesses that didn’t depend on wage theft, substandard wages, and mistreatment of employees– ie, not a piece of low-rent loser trash.

    Don’t like running a restaurant? There are thousands of people willing to take over that lease on the Red Lobster building. Darden needs to learn to put up or shut up and learn to know their place. Seems like they somehow think they’re “distinguished gentlemen.” They’re just bottom feeders.

  • Tyro

    The competent business owners will thrive. The losers will fold. Plenty of restaurants in Europe and people have health coverage there– it’s entirely possible that European restaurant owners are smarter, more ambitious, and more competent than American restaurant owners, though… I am willing to concede that possibility.

  • rocketdan

    It would seem Mario Batali had the right idea. Get a restraining order and if they ignore it, have them arrested. Closing the doors only convinces these clowns they have real power.

    We will need a new administration to ever stop the DoL funding to groups like this.

  • guest

    This is ridiculous. Servers make very good tips and have more disposable income than most. Also most food service employees are on drugs and work there for the access to cash on a daily basis and the lack of drug testing. Am I assuming all this or stereotyping? NO! I work in a restaurant and see it first hand every day. I have a degree in chemistry and a full time job as a R&D chemist and still work part time in the food service industry because the money is good there.

  • rocketdan

    Too stupid? Starting 45 years ago, the chain worked up to $100M in net profit by 1995, when owner General Mills decided to spin it off as an independent company. Since then they have increased revenues to $8B with net profits of $475M, and they provide jobs for over 180K people. If these are losers, the economy could use more of them, not less. BTW, they didn’t buy The Capital Grille until 2007, along with Longhorn Steakhouse.

    Indeed, you must be right. “These people” (stockholders) must be real losers. Not doing as well as I am sure you are. Right?

  • deelowknee

    It seems to me that people are getting twisted over the fact that some of these non-profits are getting a pittance of taxpayer funds. It also seems to me that taxpayer funding to organizations that help raise wages for low-income workers is the PERFECT USE of taxpayer $$$. It increases the tax pool. Return on investment.

  • Megamimi

    If this extortion succeeds, it will be a disaster for the very “workers” these faux unions are allegedly trying to help. Prices will rise, folks will be laid off because fewer customers will patronize the restaurants (I won’t for sure), and outlets will close. Extortion leads to extinction.

  • deelowknee

    Has this statement been peer-reviewed? Do you think a single mother in rural America might have the same reason to work at a restaurant–to skirt drug testing and to feed their habit? I sure hope that you put more rigor in your lab work than you do in your social observations.

  • awake_exDEM

    They should just pay them what they pay the kitchen staff…$8-$10 an hour for dishwashers and utility people and $10-$13 for line cooks and line chefs…then nobody has to tip them……then see how long they stick around in those server and bartender jobs!!!!! I worked in restaurant kitchens for 25 years….this is why the “back of the house” staff hates the “front of the house” staff…..BOH pays taxes on their wages FOH does not pay much tax…BOH makes and average of $90 a shift paying about 16% tax rate while FOH makes $200+ per shift @ about an 7% tax rate….

  • awake_exDEM

    They actually make about $25 dollars an hour…..so don’t believe the BS….more typical leftist freedom destroying lunacy…

  • awake_exDEM

    I worked in restaurants for 25 years…used to be a democrat too…funny how when recently I would be debating conservative ideas with co-workers they would totally flip out and go off on a tirade talking-point trip…..then when they would b***h and moan if they had to “tip pool” and say “so and so was not working as hard as me” and that they were mad cuz they had to share the tips…..I would just laugh and explain how that “tip sharing” is Socialism at its finest……..they were dumbfounded….

  • SDN

    Yes: This fine dining experience brought to you by the “Liverpool Care Path”. Enjoy your last meal.

  • Sagebrush6

    So —— if you don’t like working there ( average waite staff makes about $25. an hr combined tips/salary) go get a different job.

  • SDN

    What color is the sky on your planet?

  • Tyro

    And yet paying higher wages would run then out f business? Only if they are complete incompetent morons, which everyone seems to agree that they are. This is America. People are falling all over themselves to start restaurants. Darden needs learn to put up or shut up if they don’t want to pay higher wages. If they don’t want to do it, someone else will. If they don’t like it, they should figure out how to start a real business, not a low rent trash business. What you’re saying is that if they have to pay higher wages that they’re too stupid to make money doing that. Maybe they’re right– we should let the economy drive morons like them out of business and allow competent people to thrive.

  • rocketdan

    “People are falling all over themselves to start restaurants.” Yes, and people all over are going out of business. Restaurants are one of the least successful ventures. Those who go bankrupt do no one any good, as they employ no one.

    I’m sure these investors could find someplace else to put their money to make a profit, if we were to require that they pay certain wages and provide everyone with health insurance. Unfortunately, 180K people would be out of work. These successful restaurants have a good grasp on how much Americans are willing to pay for a meal. If their costs are higher, they can’t just arbitrarily increase prices or customers leave. They obviously understand this better than you do.

    I know the managers of a few of the local Darden restaurants (Olive Garden and Longhorn) and they have a waiting list of people very anxious to get these “low rent trash” jobs. Since Darden’s has gone more upscale over the years, the individual bills have gone up and tips are much higher. A good waiter can make very good money there. Sadly, most of the young people starting work as waiters don’t have a clue how to provide good service and don’t get regular customers and don’t keep the jobs long. That’s on them, not the chain.

    Your main talent seems to be to insult and claim others are too stupid to know how to run businesses. Come on Tyro, let us know your business starting/managing successes. I wish I could remember who said “nothing is hard for the man who doesn’t have to do it.” That is you.

  • Jade

    So the roc is a terrorist organization our tax dollars are funding. If your in a job that does not offer the pay or advancement you want, get an education, work your way up or change jobs. Why should we support people who are to lazy to work at bettering themselves. Still no accountability by the left.

  • Jim McCormack

    Let the law of Supply and Demand fix labor costs. That and competition fix the cost of sales for all business except the gubmint.

  • Patricia

    Yeah for the left- out there looking out for the little guy. They protest so they can force employers to pay higher wages, resulting in layoffs and store closures. They all wanted Obamacare- so we can all be part time and try and pay for our own health insurance out of 28 hrs a week. Oil bad- so make sure we still have to make the Saudis rich by not producing it here. Corporations bad- but dont give up those I-Phones kids. And so on.

  • Janedear

    Listen, I am against the illegal labor union tactics, and a very conservative person, but what you just said is a HUGE HORRIBLE LIE!!! I have worked every where and I know for a FACT, that almost NO WAITRESSES ARE ON DRUGS!!! THAT IS A FILTHY, FILTHY MADE UP LIE. They are very hard working people, and in twenty years, I can think of NOT ONE WAITRESS, that was on drugs. The ONLY thing I can think, is that you worked in the lowest of low, ghetto restaurant. Geez Louise. I cannot believe that you said that. I am highly indignant.

  • Janedear

    Seriously!! A lot of servers (Diner servers) are older women with children, that need the money. These are women with dignity that limp home in pain every night. What “guest” said has me utterly outraged.I just cannot even begin to understand a thoroughly sweeping statement like that. AND any of those “Chiles” or “Fridays” type restaurants I go too, has fresh faced, sweet young collage students THAT ARE NOT ON DRUGS.
    Any person on drugs would be fired. THAT is NOT something that can be hid for very long, I don’t care how good they are at hiding it.

  • monacall

    restraining orders cost money, I would just lock the doors and say “closed for repairs”
    and file for government assistant to keep the business going…..lol

  • Blackened144

    You do know that “fresh faced, sweet young collage students” do drugs all the time right? I know because I was one of them when I worked at the Ale House. Obviously not all of them, but you are incredibly naive if you think a good portion of the younger staff are not doing drugs.

  • Blackened144

    I dont think the poster was saying that they were on drugs while working necessarily or that they are not hard working individuals. Just that a lot of them use the cash they earned every day at work to buy drugs after work. As I said before, I can vouch for that because I was one of those young people buying drugs with my cash after work.

  • Blackened144

    If raising he minimum wage was such a great idea, why not just make it $100/hr? If 15$/hr is good, then 100$/hr has got to be better for everyone.

  • steve

    Don’t miss the real point of this, using my taxpayer money to fund organizations and ideas that I am against is disgusting

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