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Union Activity

Newly in cross hairs, service employers try to tamp down conflict


So far, unions have had a negligible impact on the nation’s franchisees. But as unions lose traditional members, they are aiming for a new target—the legions of hospitality workers at restaurants and hotels.

A global boycott this summer of Hyatt hotels and a costly labor dispute over provocative posters criticizing a Jimmy John’s franchisee’s sick leave policy may be harbingers of future conflicts.

Labor attorney James Sherman, of the Minneapolis firm Wessells Sherman, warns that franchisees must prepare their managers and supervisors on what to do, and not do, when a union organizer approaches their workforce,  “or they could run into a buzzsaw.”

Unlikely target

Just a few years ago, a chain of sandwich shops would have made an unlikely target for unionization, Sherman said. In the manufacturing heyday of  the 1950s, over 20 percent of the nation’s private sector workforce belonged to unions, but as jobs moved overseas that number dropped to less than 7 percent.

“Unions are getting desperate if they’re going after franchisees in the fast food business, with their young workforces and high turnovers,” Sherman said.

Union activists, on the other hand, think the industries should be targeted because of low wages and lack of sick leave. “Restaurant work is often an entry-level job, so it’s easy to exploit people,” said Rikki Olsen, a former employee of MikLin Enterprises in Minneapolis, a 10-unit franchisee of Jimmy John’s Gourmet Sandwiches. “I would certainly want to join a union if I ever worked in another restaurant.”

Poster wars

The reaction of owners at MikLin Enterprises caused costly litigation that is still pending. In 2010, the Industrial Workers of the World (the IWW, formed in 1905 and once known as the Wobblies) approached MikLin employees about joining their union. The vote to unionize failed 89 to 87, but a group of pro-union employees took their gripes public.

They put up thousands of posters that contained two photos of identical Jimmy John’s sandwiches and a caption that said, “One of these sandwiches was made by a sick employee. Can’t tell the difference? That’s too bad because Jimmy John’s workers don’t get paid sick days. Shoot, we can’t even call in sick. We hope your immune system is ready because you’re about to take the sandwich test.”  

According to documents filed with the National Labor Relations Board in Washington, D.C., MikLin co-owner Rob Milligan ordered workers to take down the posters and fired six of the employees involved. The fired employees enlisted Minneapolis attorney Timothy Louris of Miller, O’Brien, Cummins on a pro bono basis, and filed a complaint with the NLRB.  

In April, Arthur Amchan, an administrative law judge for the NLRB, ruled in favor of the employees and ordered MikLin to reinstate them with retroactive pay.  According to Louris, MikLin filed an appeal this summer that the NLRB will review “sometime in the next few months.” MikLin’s attorney Michael Landrum, of Landrum Dobbins in Edina, Minnesota, did not return phone calls.

Former MikLin employee Olsen said she supported the 2010 union effort of the franchisee’s workers, but was not fired. “I earned minimum wage of $7.25 an hour, and had no benefits during my two years at Jimmy John’s,” Olsen said. “Their rule was if you were too sick to work, you had to find a replacement, but everybody worked every day and there were no replacements, so you worked no matter how you felt.”

‘Lifting’ hotel workers

Unions have been more successful with hotels. According to the New York-based Unite Here website, more than 100,000 hotel workers in the United States and Canada belong to that union. Unite Here recently launched a campaign called Hotel Workers Rising, which is designed, the website says, “to lift hotel workers into the middle class.”

Last September, Hotel Workers Rising began a boycott against the franchisee of the Seattle Hilton Hotel, the R.C. Hedreen Co. According to local press reports, owner Richard Hedreen had put the hotel on the market and the boycott continued until this July, when he agreed to make the new owner abide by contracts 100 of his workers had negotiated through the local chapter of Unite Here.
In a separate action this June, Unite Here called for a weeklong boycott of all Hyatt hotels because, they claimed, the Hyatt chain “is abusive” of its housekeepers, by paying them lower wages and making them clean more rooms than housekeepers in other chains. The global boycott drew support from groups as mixed as the American Football League Players Association and the National Women’s Health Network.

‘Our pain, their gain’

In a statement, Hyatt management called the boycott “an attempt to boost union membership in non-union Hyatt hotels through a non-democratic and intimidating process.” It is too early to assess if the boycott had an impact on hotel guest counts. The Hyatt Hotels Corp. has 488 properties in 45 countries and less than 10 percent of them are owned by franchisees, a spokesperson said. The spokesperson would not say how many properties have union members as workers.

Unions often try to enlist customers’ support of their campaigns, by helping to publicize information about the wages and working conditions of hospitality workers.

The Seattle chapter of Unite Here found local hotel workers who told their stories to the researchers that compiled “Our Pain, Their Gain,” a report issued by Puget Sound Sage, a Seattle non-profit promoting good jobs for disadvantaged adults.

The report states that hotel profits in the United States are rising while the average U.S. hotel worker earns $22,960 a year and 59 percent of them have no health insurance. Wages are higher, the report adds, for hotel workers covered by collective bargaining agreements.

The average yearly income for restaurant workers employed in 2009 was $15,092 and 87.7 percent of them did not have paid sick days, according to “Behind the Kitchen Door: A Multi-site Study of the Restaurant Industry,” a 2011 report published by Unite Here and the New York-based non-profit Restaurant Opportunities Centers United.

The one percent

According to the U.S. Bureau of Labor Statistics, about 1 percent of the nation’s 7.9 million restaurant workers belong to unions, as do about 7 percent of the 1.35 million hotel workers. One reason the numbers are low is because lobbyists from the National Chamber of Commerce, the International Franchise Association and other pro-business organizations have thwarted efforts to make it easier for hospitality workers to unionize.

Jay Perron, the International Franchise Association’s vice president of government relations and public policy, said as the influence of unions across all industries is dwindling, “unions will do anything to bring more money into their coffers. That’s why we are pushing to make sure employers and employees know their rights about what unions can and can’t do to organize employees.”

One of the NRLB efforts lobbyists have, so far, successfully blocked is the requirement to display a workplace poster, telling private sector employees they have a right to unionize.



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