It’s been a rough month, and a devastating several years, for the controversial fringe organization Restaurant Opportunities Center (ROC). Whether the richly funded but poorly supported coterie of labor radicals can remain politically viable and survive legislative shutouts and public relations setbacks is now in question.
ROC-United was the outsider gaggle of imported activists that two years ago launched D.C. Initiative 77, a ballot measure narrowly approved by voters in 2018 that would have outlawed the tip-wage system in the District. Elected officials soon after repealed the proposal due to near-universal opposition by affected nightlife and hospitality tipped workers and community establishments.
The pseudo labor-organizing outfit has unsuccessfully attempted to destroy the wage model standard to full-service dining and drinking establishments across the country in 43 states plus D.C. ROC has lost every battle in every state in which it has waged war.
ROC has failed to eliminate the tip-credit and mandate imposition of a so-called “One Fair Wage” requirement that all bars and restaurants must directly pay tipped employees the full local minimum wage. Bartenders and servers in all but seven states that never had a tip-credit or rescinded it decades ago are paid a base-wage with the guarantee that when combined with tips their total pay equals, and typically greatly exceeds, the minimum wage.
Two new developments have ROC hitting the ropes.
New York Gov. Andrew Cuomo announced on New Year’s Day that the state would retain the tip-wage system for hospitality and nightlife establishments. Cuomo’s long-awaited decision was contrary to his pledge two years earlier to abolish the tip-wage set-up.
Cuomo had directed the New York State Department of Labor to hold hearings throughout the state on the issue and, as in D.C. and all states considering the matter, restaurant and bar workers turned out in impressive numbers to oppose changing the wage system. In addition, the New York labor department indicated that hospitality operators were successful in educating state officials on why-and-how the current tipping system benefits both workers and businesses. The agency report noted, “hospitality businesses submitted copies of their pay records as part of their written comments and others … open[ed] their books to Department representatives.”
Real-world data, alongside worker opposition, clearly aided agency officials and the governor in understanding the multiplicity of tip-wage benefits. Cuomo’s decision to retain the tip-credit for the hundreds-of-thousands of tipped employees at bars and restaurants was based on the labor board’s finding that “tips are so common that total compensation far exceeds the minimum wage [and] therefore some offset of the minimum wage [is] warranted.”
While Cuomo did eliminate the tip-credit for those classified as working in “miscellaneous occupations” such as nail salons and parking garages, his decision underscored that the well-functioning economics of tipping at hospitality establishments is fundamentally different than in other business sectors.
ROC’s failures were even more evident last week when the group suddenly announced the immediate shuttering of its “model eatery” in Manhattan after only a month of operation and for the second time. The fast-failed COLORS restaurant was supposed to be “proof of concept” for the compensation scheme ROC desires to dictate.
This abrupt shut-down followed a similar eatery closure in Detroit just days prior and the public cancellation of plans to open others in several cities, including D.C. Worse, employees received only text messages telling them they no longer had jobs and, similar to staff complaints surrounding ROC’s previous restaurant in New York City, included allegations of unpaid wages and other operating violations.
After spending tens of millions of dollars trying to coerce the outlawing of a wage system that works well for tipped, hourly, and salaried restaurant and bar service professionals, ROC has learned two things the hard way: Not only do hospitality employees broadly oppose them, the group is also not capable of operating a restaurant.