Ukraine
McDonald’s – The company announced it will exit the Russian market and has begun the process of selling its assets in the country in the wake of Russia’s invasion of neighboring Ukraine. In March, the company along with Starbucks, KFC, and others announced a cessation of their business interests. McDonald’s closed its nearly 850 company-owned restaurants but committed to continuing to pay the salaries of its 62,000 workers. The company said, “the humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.” McDonald’s will pursue selling its Russian restaurants to a local buyer, the company said. More details.
COVID-19
Restaurant Relief Fund – The U.S. Senate failed to muster the 60 votes necessary to pass a $48 billion small business relief package of which $40 billion would be directly allocated to replenish the Restaurant Revitalization Fund (RRF). The bill received 52 “yes” votes, which was eight votes shy of the amount needed to begin debate on the bill. Dissenting Republicans voted against advancing the bill to the floor for debate because it would have been largely deficit-funded (with only $5 billion of the $48 billion in total being backed by unused pandemic relief funds). This was likely the final vote on the matter. More details.
Minimum Wage
California – The campaign behind an initiative to increase the state’s minimum wage to $18/hr announced that they had collected over 1 million signatures. The initiative, forwarded by the “Yes on the California Living Wage Act” coalition, aims to increase the minimum wage at different intervals depending on whether an employer has 26 or more workers or 25 or fewer workers. For employers with 26 or more workers, if passed, the minimum wage would reach $18/hr on Jan. 1, 2025. For employers with 25 or fewer workers, the minimum wage would reach $18/hr on Jan. 1, 2026. After reaching $18/hr, the minimum wage would be tied to the CPI. In California, the number of signatures required for an initiated state statute is 623,212, which is equal to 5 percent of the votes cast in the last gubernatorial election. More details.\
Labor Policy
U.S. House – The House Education and Labor Committee voted 27-19 along party lines to approve a Democratic bill targeting wage theft. The legislation, which Education and Labor Chair Bobby Scott (D-Va.) and Appropriations Chair Rosa DeLauro (D-Conn.) unveiled last week, is a reintroduction of a bill that Democrats first introduced in 2016. It would require employers to deliver detailed pay stubs and maintain employee-accessible wage records, prohibit mandatory arbitration agreements, and collective action waivers and hike fines for violating the Fair Labor Standards Act (FLSA). The measure would also appropriate $50 million annually through fiscal 2026 for a new grant program to educate workers and employers on wage theft and increase the statute of limitations for prosecuting wage theft, among other things. The bill heads next to the House floor. Even if it passes, GOP opposition makes passage in the narrowly divided Senate unlikely. More details.
California – The state decided to appeal a lower court ruling that the landmark California law requiring diversity on corporate boards of directors violated the state constitution. The law went into effect in 2020. It required publicly traded companies based in California to have board members from underrepresented communities including people of several races and ethnic groups and people who identify as gay, lesbian, bisexual, or transgender. A month after the bill was signed, Judicial Watch filed a lawsuit arguing the law was unconstitutional because it mandated quotas. The judge ruled that the state itself had made no attempt to address the issue by altering the selection process for boards of directors and went immediately to the legislature. Timing for the legal process on the case is unclear. More details.
Connecticut – The governor signed legislation that would bar employers from requiring employees to attend meetings on certain political or religious subjects including unionization. Employers would still be able to hold such meetings but employees would be shielded from being penalized or fired for skipping them. The labor community argues that the legislation is needed to stop employers from penalizing workers if they choose to skip meetings where businesses share “anti-union” messaging.
Starbucks – The company said it would pay the travel expenses for employees to have an abortion or a gender-affirming procedure if those procedures were not available within 100 miles. The company is the first major restaurant company to provide such a benefit, as courts and Republican-led states place limits or outright bans on their availability. Employees, their dependents, or partners enrolled in the company’s healthcare program would be eligible for travel reimbursement for those procedures. The move comes as the U.S. Supreme Court appears likely to reverse the landmark Roe v. Wade decision. More details.
Labor Activism
Target – Workers at a store in Christiansburg, VA announced plans to refile a petition to hold a union election with the National Labor Relations Board (NLRB) within the next few weeks after failing to garner enough valid signatures during their first attempt. The last union election to be held at a Target store in the U.S. was on Long Island, New York in 2011. In that effort, workers voted 137 to 85 against unionizing with the United Food and Commercial Workers (UFCW). The lead organizer said they are already working to gather more signatures, and making sure employees go back and fill out the cards “properly.” Organizers claim that they plan to file again potentially as soon as next week. More details.
Sustainability
Colorado – Legislation is on its way to the governor’s desk that would make Colorado the third state to pass an extended producer responsibility (EPR) law for packaging. The EPR program, which could start in 2026, would be operated and funded by producers who join a nonprofit producer responsibility organization. The Colorado Department of Public Health and Environment would oversee it, with input from an advisory board of recycling stakeholders. Producers would pay dues each year to fund a statewide recycling program. In Colorado’s version of EPR, producers would pay annual membership dues to the producer responsibility organization based on the amount and type of packaging or paper they use. Fees would go toward funding new or improved recycling services, and residents could keep using their usual recycling services if they wish, according to the bill. The bill also includes unique provisions for processing compostable packaging. More details.
Papa John’s – The company announced that it will begin linking eligible team members’ and executives’ annual bonuses to performance and progress on the company’s ESG goals. The initiative was announced by Papa John’s with the release of the company’s 2021 Corporate Responsibility Report, highlighting the company’s ESG initiatives and progress. The report contains more details on the updated compensation plan, which involves adding an ESG metric to the Papa John’s Management Incentive Plan (MIP), which is aimed at rewarding team members for helping to drive business performance and for supporting the company’s main business strategies. The ESG metric will be evaluated by progress towards a portfolio of ESG priorities, chosen by a materiality assessment conducted by the company, and include initiatives related to advancing diversity, equity and inclusion, enhancing reporting and identifying opportunities to address environmental impact, and furthering the company’s better ingredients commitments, which includes eliminating preservatives, MSG, high-fructose corn syrup, and palm oil. The report also highlighted several areas identified as priority areas by the materiality assessment, including sustainable packaging and materials management, sustainable agriculture, reducing food waste through the company’s operations and supply chain, and reducing greenhouse gas emissions. More details.
Key Takeaways
- Tuesday’s Election Day delivered a number of interesting results. North Carolina State Senator Chuck Edwards who is a McDonald’s franchisee defeated embattled Congressman Madison Cawthorn in the Republican primary election for the state’s 11th district. The seat heavily favors Republicans, so barring a dramatic turn of events, another franchisee will matriculate to the U.S. Congress. While former President Trump has had a mixed record of success with his endorsements, his brand of politics certainly continues to perform well within the Republican Party. In Pennsylvania, State Representative Doug Mastriano won the Republican primary election for governor, echoing the former president on many issues. His candidacy, however, is likely to have limited appeal in a general election contest, likely handing the governor’s mansion back to Democrats. In Idaho, the six-term Republican Attorney General Lawrence Wasden was defeated in the state’s primary by former Congressman and Freedom Caucus founder Raul Labrador who ran to the right of Wasden. Finally, with the primary contests over in Oregon, voters now get to consider an interesting slate of candidates in the general election with the Democrat and Republican nominees facing off against a fairly well-known, pro-business Democrat running as an independent in the winner-take-all general election contest.
- Starbucks’ (as well as others, like Amazon’s) announcement to pay for travel for abortions and gender-affirming care could trigger increased scrutiny of brand’s healthcare policies. The issue is likely to stay in the headlines over the summer (around any potential U.S. Supreme Court decision) and into the fall as Election Day approaches.
Podcast
Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Restaurant Business online website, SoundCloud, iTunes and Spotify.