COVID-19
Restaurant Relief Fund – The U.S. House passed legislation that would provide $42 billion in relief to foodservice businesses that originally applied for the Restaurant Revitalization Fund. It also provides an additional $13 billion to other businesses that were hit hard during the pandemic, including live event venues, gyms, and sports teams. Progressive Democrats were able to insert a provision targeting wage theft into Democrats’ restaurant and small business aid package. The new language would prevent any business that “has a wage violation at the time of application” from receiving funds. It was added to a manager’s amendment that was adopted when lawmakers passed the rule providing for the measure’s consideration. The bill now moves onto the U.S. Senate where chances for passage remain unclear. More details.
Wages
Hawaii – House-approved legislation increasing the minimum wage to $18/hr by 2026 advanced through its final senate committee and is now headed to the floor. The bill also removes the earned income tax credit and reduces the tip credit to 35 cents/hr beginning Oct. 1, 2022, and fully eliminating it by Jan. 1, 2026. Final passage is highly likely. Hawaii’s current minimum wage is $10.10/hr. More details.
Washington, D.C. – Initiative 82 (the renewed effort to eliminate the tipped wage for servers) was approved by the Board of Elections to appear on the Nov. ballot. The board determined that the initiative’s backers collected the necessary signatures for the measure to qualify for the general election ballot. That decision followed a multiple-week delay in determining whether they met a legal requirement to get signatures from at least 5 percent of voters in five of the city’s eight wards. The delayed determination caused the initiative to miss the ballot printing deadline to appear on the June 21 primary ballot. As proposed, the initiative would gradually raise the city’s tipped minimum wage of $5.05/hr to meet D.C.’s standard minimum wage which will be $15.20/hr by 2027. A nearly identical proposal was passed by 55 percent of D.C. in 2018 but was later repealed by the city council. More details.
Paid Leave
Maryland – Legislation is on its way to the governor that provides for 12 weeks of paid family leave. The bill was approved by a supermajority of both chambers, which is enough to override a gubernatorial veto. A potential veto appears unlikely. The new mandate would allow leave for an employee’s own serious health condition, to care for a family member with a serious health condition, military family reasons, and to care for a new child after birth/adoption/foster placement/kinship care (i.e., parental bonding). Additionally, if the employee takes 12 weeks of leave for their own serious health condition, they will get an additional 12 weeks for parental bonding leave and vice versa. In total, an employee could take up to 24 weeks of paid leave in a year. If the governor signs it, Maryland would join the other nine other states – California, Colorado, Connecticut, Massachusetts, New Jersey, New York, Oregon, Washington, Rhode Island – and the District of Columbia in offering statewide paid family leave. More details.
Labor Policy
Labor Department – David Weil’s nomination to head the Wage and Hour Division has been withdrawn. Last week, three key Democrats in the U.S. Senate (Sens. Kyrsten Sinema, Mark Kelly, and Joe Manchin) voted against moving forward on his nomination. The final vote count was 47-53 against invoking cloture. Weil is the first Biden nominee to fail on the Senate floor and faced heated opposition from Republicans and business groups dating back to his prior stint in the same position for the Obama administration. Weil’s critics have faulted him for Obama-era policy moves on issues like independent contractor classification, joint employment designations, and overtime pay, making him one of President Joe Biden’s most polarizing nominees. More details.
EEOC – President Joe Biden announced his intention to nominate Kalpana Kotagal to the Equal Employment Opportunity Commission. Kotagal is a civil rights attorney and represents plaintiffs in employment and civil rights litigation. If confirmed, Kotagal would give the commission a Democratic majority by filling the seat held by Trump-appointee Janet Dhillon, whose term ends July 1. Commission Chair Charlotte Burrows subsequently announced that the Democratic-majority EEOC’s agenda will include requiring employers to report pay data, as well as issuing guidance on sexual harassment and LGBT discrimination. In addition, the EEOC is expected to continue to focus on systemic discrimination, pay equity, and “the civil rights impact of the COVID-19 pandemic.” More details.
NLRB – The General Counsel of the National Labor Relations Board (NLRB) announced plans to ask the board to rule that mandatory meetings about organizing, so-called “captive audience” meetings, are a violation of the National Labor Relations Act. This would be a significant victory for labor groups. Mandatory meetings are often used by company management to present anti-union messaging. And employees are required to during work hours. Under the proposed rule, the NLRB would require employers to tell their workers that attendance is voluntary for any meetings to discuss unionization. The Board is currently pursuing a lawsuit against Amazon and has accused them of staging such meetings as “training” sessions or “small group meetings,” where managers speak about the potential downsides of joining a union. More details.
California – The landmark California law requiring diversity on corporate boards of directors was struck down in Los Angeles County Superior Court with the judge finding that the law violated the state constitution. The law, passed as AB 979, 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. It was not clear whether California would appeal Judge Green’s ruling. More details.
Washington – The governor signed legislation that sets a minimum pay rate for transportation network drivers based on the size of the city in which a trip originates. For trips that begin in cities with a population of more than 600,000, drivers must be paid $.59/minute and $1.38/mile, or a minimum of $5.17/trip. For all other trips, drivers are guaranteed a minimum rate of $.34/minute and $1.17/mile, or a minimum of $3/trip. Drivers are now also entitled to one hour of paid sick leave per every 40 hours worked. More details.
Labor Activism
Starbucks – Opening a new front in the ongoing union organizing effort at Starbucks, twenty-six New Jersey elected officials signed a letter of support for the recent unionization efforts at Starbucks stores in the state, urging CEO Howard Schultz to adhere to, and sign, the Fair Election Principles. Increasingly, union-friendly state and local elected officials are being leveraged in individual store campaigns. In other news, with results from three more units in New York, 13 stores have now voted to unionize. Four additional stores will have their votes counted today with four more coming next week. The company also announced the removal of their general counsel this week. More details
Alcohol
Massachusetts – The governor signed a $1.6 billion supplemental budget that included a provision extending the authorization for beer, wine, and cocktails to-go until April 1, 2023. Under the law, mixed drinks sold with takeout or delivery food orders must be in sealed containers and placed in the trunk or non-passenger compartments of the vehicle. The budget also included a provision allowing municipalities to pursue an expedited permitting process for outdoor dining. More details.
Virginia – The governor signed two billsextending the alcohol delivery and to-go cocktail policies put in place during the COVID-19 pandemic. The legislation was set to expire on July 1, but the new legislation will extend both laws until July 1, 2024. More details.
Sustainability
California – The U.S. Supreme Court has agreed to hear a case brought by the National Pork Producers Council and the American Farm Bureau Federation against California’s Proposition 12, the state law that voters approved in 2018, banning the sale of pork from hogs born to sows that were not raised according to the state’s swine housing standards. The NPPC filed suit against the state, arguing the rule impacts farms outside of California and violates the Constitution in terms of interstate commerce. The high court is taking up the case on appeal from the U.S. Court of Appeals for the 9th Circuit, which in July 2021 upheld a lower court ruling against the NPPC-AFBF lawsuit. Ora arguments could begin this fall. More details.
Hawaii – An additional senate committee advanced an amended version of house-approved legislation that would establish an extended producer responsibility program in the state. The bill would require certain producers of consumer goods to register with the state health department and pay an annual fee based on the amount of packaging volume the covered producer places on the market each calendar year. Additionally, the bill provides for the deposit of fees into a special extended producer responsibility fund and some of those monies be allocated toward the creation of a report that assesses the resources needed to reduce the volume of packaging waste sent to landfills. More details.
Animal Welfare
U.S. Supreme Court – The U.S. Supreme Court will hear a case that could dramatically impact the pork market in the U.S. and set a precedent for future animal confinement mandates. In short, California mandated via Proposition 12 that all pork sold within the state met certain confinement and animal welfare standards. The mandate applied to both in-state pork producers, as well as out-of-state farmers. The pork industry sued, arguing that the state of California cannot dictate how out-of-state producers operate. The court will hear the case in the coming months and the ruling could be incredibly consequential. More details.
Key Takeaways
- Companies need to pay close attention to the announcement by the NLRB General Counsel regarding “captive audience” meetings. Such a move by the Board would dramatically undermine a company’s ability to communicate with workers during an election and would place even greater emphasis on a proactive approach to labor relations before an election petition is filed. As organizing efforts spread within the industry, brands need to stay on top of the NLRB’s agenda which is intent to enable organizing anyway and anywhere they can.
- The C-suite implosion at Starbucks should be a cautionary tale for all companies. With the sudden ouster of both their CEO and their general counsel in the last two weeks, it is clear that the company is regretting its initial strategy combating the SEIU and is scrambling to recalibrate. It’s important for companies to understand that the process of protecting itself from unionization is at its heart a communications and employee relations exercise – not a legal one – and those professionals should play a leadership role in a company’s response.
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.