Presidential hopefuls & the restaurant business

Everyone knows that Herman Cain honed his leadership style in the restaurant business, first at Burger King, then Godfather’s, and finally the National Restaurant Association. But his departure from the presidential campaign hasn’t left the industry without an associate in the race.

With the exceptions of Ron Paul and Rick Santorum, all of the major candidates have a connection of some sort. Here’s a quick review of those sometimes scandalous ties:

Mitt Romney: The biggest check ever signed by the private-equity pioneer was a $1 billion pay-out to Tom Monaghan for Domino’s Pizza, which Romney’s employer, Bain Capital, would own for a number of years. The company subsequently purchased a piece of such industry giants as Dunkin’ Donuts and Outback Steakhouse. Bain earned a significant return from Domino's and Dunkin' through their respective stock offerings.

Newt Gingrich: An early scandal for the former House Speaker centered on his second career as educator. The restaurant business caught a little mud in that flap, too.

The fiery polemicist was accused of taking sizeable contributions from lobbyists who allegedly wanted him to air the views of their clients to the business students he was instructing at the undergraduate level. News reports identified one of those contributors as the Employment Policies Institute, a group formed by S&A Restaurants alumnus Rick Berman in part to protect the interests of several major casual-dining chains.

According to the allegations, the EPI wanted Gingrich to present minimum-wage employers in an attractive light. The group never commented on the assertions, and Gingrich denied that he skewed his lectures to accommodate its interests. But one of the documents that came to light at the time included a note from Berman to Gingrich, thanking him for his help.

Jon Huntsman: His connection is on the supply side of the restaurant business. Huntsman’s father, Jon Sr., was the founder of a chemical company called Hunstman Corp., which invented the clamshell burger box. Its major customer: McDonald’s, which spec’d the new container for the Big Mac.

The elder Huntsman later founded a private equity firm, HuntsmanGay, whose investments include a stake in a company that sells Mama Rosa’s pizza through convenience stores. Mama Rosa’s also supplies pizzerias with dough balls and pizza crusts.
I’ve yet to find a connection between the restaurant industry and Rick Santorum, the former Pennsylvania senator, though I first learned of him and some industry-aligned views from the then-director of the Pennsylvania Restaurant Association.

Similarly, there’s yet to be a direct tie revealed with Ron Paul, the libertarian candidate. But he does share the name of perhaps our industry’s best-known researcher.

We interrupt this broadcast...

I’ll be straying from Restaurant Reality Check tonight to live-blog the election results for Nation’s Restaurant News. Follow the results and learn what they mean for the restaurant industry by surfing over to www.nrn.com/policy.

And if there’s a race you’d like me to follow for you, just e-mail me at peterjromeo@aol.com.

A political dilemma for restaurants

After losing three potent allies in its struggle to avert a tilt toward unionization, the restaurant industry faces a dilemma this week of nuclear proportions.

The trade has steadfastly resisted what it and other employer groups have dubbed the card check bill, a measure that would greatly ease the organization of more restaurant and small-business staffs into collective bargaining units. It was joined in that effort by a sizable swath of non-unionized corporate America, a veritable Who’s Who of big retailers and service providers, along with the associations that represent them.

But on Saturday, the opposition splintered. Starbucks, Costco and Whole Foods announced they were forming a separate coalition to find a “third way,” a middle path between the legislation posed by unions and the no-way/no-how stance of business. In short, they offered to compromise, and even listed some concessions they would make. Those bargaining chips include allowing union representatives to make their pitch to employees, and moving more quickly to correct employers’ violations of labor laws.

In exchange, the splinter group—the Committee for a Level Playing Field for Union Elections—asked for several major changes in the legislation, including the omission of the all-important card-check provision. That component is seen as critical to labor, and unacceptable to employers, because of the turbo-charge it’d give to unionization. To become the bargaining representative for employees, a union would merely need the signatures of at least half the staff. The decision to sign or not sign the unionization card would be made in public, a process that would replace secret ballots.

Restaurants and other businesses fear the elimination of the secret ballot would subject employees to pressure from organizers and pro-union peers. People would sign the card out of fear, not out of a desire to join a union, they argue.

Labor counters that the bill merely simplifies the process of choosing. The measure’s official name is the Employee Free Choice Act.

The Committee’s breakaway move was quickly blasted both by proponents of the bill and the various businesses and alliances that had stood in unified opposition. I couldn’t find any public statement from the National Restaurant Association, but a number of its allies, including the U.S. Chamber of Commerce, were pointed in their criticism.

The industry may want to think long and hard before it responds. The card-check bill is favored by the White House and the Democratic Party, and it passed the House during the last session of Congress. Now both chambers are controlled by the Democrats. The legislation's passage doesn't seem far-fetched at all.

Opposition on principle is a laudable thing. But should the industry keep up a fight that it and its allies are doomed to lose? Or should it consider the more moderate proposal put forth by Starbucks, Costco and Whole Foods? Should it consider joining the Committee?

Yeah, it would mean accepting some potentially dangerous provisions, such as the requirement that union representatives be given face-time with staffs (in a neutral place, with a provision as well for employers to make their appeal against unionization). But if the card-check provision is really the rub, might the trade be better off with a third way?

I don’t profess to have the answer. I just hope the industry explores its options and acts on the basis of practical evaluation, not knee-jerk principle.