Café Cerés closure highlights contentious relationship between restaurants and unions

NINA MOINI: The often contentious relationship between Twin Cities restaurants and employee unions is once again making headlines. Minneapolis restaurant business mogul Daniel del Prado announced that his four Cafe Ceres locations will close this month. In August, baristas at Cafe Ceres voted to unionize under hospitality union UNITE HERE Local 17. Employees were in the first few months of contract negotiations with management when the closure was announced last week.

A similar situation happened last year at Chef Ann Kim's Uptown restaurant called Kim's. Kim's workers voted to unionize. And within two months, the restaurant closed, citing financial losses.

Joining us to break all this down is Adam Platt, the executive editor of the magazine Twin Cities Business. Adam's been covering this issue through a variety of news articles and opinion pieces. Thanks so much for coming on the show and sharing your thoughts with us, Adam.

ADAM PLATT: My pleasure.

NINA MOINI: So you do cover a variety of different business sectors. How did this movement of unions and restaurants take shape? When did you start to notice this?

ADAM PLATT: It's been fairly recent, Nina. I would say in the last five years. Unions have had a presence in the hospitality industry for a long time, especially in hotels and their restaurants and large venues like sports arenas and places like that. But you really haven't seen them in many owner operated or small restaurant groups. And so it's a fairly recent phenomena.

The HERE Local is focused on this. It's clearly a priority of theirs. There's been some supposition that with all of the collateral damage of the pandemic in the hotel industry, and hotel employment is down in a lot of parts of the country that here it's looking for new sources of membership and is seeing what it can accomplish in the restaurant sector.

NINA MOINI: Has it been mostly focused in the Twin Cities? Obviously, there are probably more restaurants in the Twin Cities, but is it a trend that you see everywhere or just around here?

ADAM PLATT: I can't tell you nationally a lot about this, because our focus is really Minnesota and the region. But it is-- I don't hear a lot of stuff about greater Minnesota. And to the extent that I am familiar with other markets in the Midwest, it seems more active here than in other places.

NINA MOINI: Why do you think that is?

ADAM PLATT: I don't really know. I do think that the Twin Cities, like certain other markets, is strong for certain types of social activism. And these sorts of things can be fairly idiosyncratic. You can have a certain individual in a Union Local that prioritizes something, or is highly effective. I mean, I wouldn't suggest that this Local is off on its own and doing stuff that aren't priorities of the National Union. But it's really a little hard to say. They could perhaps tell you better than I could.

NINA MOINI: OK. So what types of restaurants are these efforts happening within? They seem to be more high end restaurants.

ADAM PLATT: Well, it's a little bit difficult to generalize. What I would say is really where it seems-- the focus seems to be in the city of Minneapolis. And it tends to be among restaurants or restaurant groups that have been prominent for one reason or another.

I don't mean to necessarily suggest it's retaliatory. But Ann Kim, for example, came out publicly against the Labor Standards Board, which was a priority of a couple of different local unions. Daniel del Prado was profiled in our magazine a couple of years ago, and was fairly outspoken about his love of capitalism and capitalist philosophy, and his desire to be extremely wealthy.

And so I do wonder sometimes whether there is a kind of, oh, look at this guy. Well, let's see what we can accomplish. Or this business seems like a good target, because he must have a lot of money, or they don't seem to like labor regulation. And so I do think there was a piece of that. Although, I couldn't tell you for sure.

Again, I do think it's idiosyncratic. You have to have some interest in the restaurant itself and the employee base in organizing. It won't go anywhere unless a union can convince a couple of people to really get it rolling.

NINA MOINI: And what do you think-- what do you see as some of the issues that the unions are concerned about and asking for?

ADAM PLATT: Well, it's interesting. And this is, I think, where it's somewhat different than what I've seen unions do in hospitality in other cities and in other periods of time, in that when you talk to restaurateurs whose restaurants or businesses have been the subject of unionization efforts, more often, you're not hearing that they're talking about-- the employees are talking about wages and benefits. I don't mean to suggest that they're disinterested in that.

But a lot of it has to do with issues of workplace control, and who has a say in what. I know-- and in ways that are both kind of picayune and significant. So in Ann Kim's case, there was a lot of talk about fixed hours, which tend not to be a feature of independent restaurants. Hours are fluid, and they change from week to week for employees often. And employees get cut when business is slow. And that's just been a feature of the way restaurants work in the US.

But in talking about Cafe Ceres, a lot of the stuff I was hearing out of Cafe Ceres was things like the workers wanted to wear pins stating their solidarity with the Palestinian cause. And they wanted to have a say in where the business procured milk, things like that, which typically are not the purview of workers in a workplace.

And so at another local restaurant that closed before it was unionized, I was hearing from folks inside that the workers wanted to choose the general manager. They wanted a say in who the boss was.

NINA MOINI: So there might be a variety of issues-- higher wages, job stability, health care. And we've had owners, restaurant owners on as well, who are trying to take steps to make the jobs more livable and more desirable for their staff as well. So it's a multitude of issues.

And I wonder if you think since the pandemic that expectations may have changed, like they have, really, in a lot of industries. I mean, I don't know if-- staffing might be down, and people might just be saying that they really-- they demand more power or want more power, or they'll go elsewhere. Do you think standards and expectations changed with the pandemic?

ADAM PLATT: I think that's an important point. The hospitality industry, more than most industries, lost a lot of its longtime workers during the pandemic, because the restaurants closed and reopened, closed and reopened. And people were without job stability for an extended period of time in excess of a year. And so a lot of longtime workers left the hospitality industry.

And many of the people in it now, especially younger employees, are new to the industry. And they came to the industry maybe with a different set of expectations or without a willingness to accept the kind of traditional ways that things had been done in the industry. And I do think the pandemic was the inflection point for that, for sure.

NINA MOINI: Maybe you don't have a suggestion. But what are some of the options that restaurant owners have versus just shutting down if their unions start to unionize, as some of these restaurant owners have been accused of union busting? Do you think there's a place where everyone can come together?

ADAM PLATT: Well, I do think one of the things that has been a little bit confusing to me about these fairly high profile unionization efforts is they've taken place in businesses that are not what I would describe as financially strong. They've taken place in businesses that are struggling.

I think one of the disconnects that the union movement has is that they assume that every restaurant business, hospitality business that is busy is highly profitable, which is not the case. The restaurant industry as a whole is a low margin business trade. And it's-- why that is is peculiar to the industry, but it is not a business that tends to spin off kind of standard levels of profit.

And so I think the unions see it as a fertile field in ways that it may not entirely be, that adding to the wage base or adding to the cost of a restaurant business is going to be a nonissue for the business. And I think in some of these businesses, Kim's especially, that business was teetering before it was unionized. It was not a-- to me, it would not have been a smart prospect for a union to try to organize it, because it was not likely to survive. So I think one of the things the unions have to think about is try to better understand the type of businesses they're organizing and the ones that might have the financial resources to be more-- to work with them more effectively.

And I think, also, you need to think about-- they need to think about what they want. And I think these issues of workplace control and decision making are really difficult topics for restaurateurs who tend to be not corporations that have long policy books and procedures, but they tend to be owner operators who like to do things their way. And they didn't borrow $2 million to open their restaurant to have an hourly employee tell them where they should buy their milk.

And so I think talking about wages, benefits, and kind of workplace policy, certainly safety issues related to wage theft, those are very legitimate issues for a union. But I think some of these other topics that employees have wanted to get into are really kind of out of left field for restaurateurs, and likely to create conflict, not a path to a win-win situation.

NINA MOINI: So before I let you go, Adam, you mentioned this briefly about the city of Minneapolis was considering or is considering a Labor Standards type of board related to the industry. Is that the way of the future? What are you going to be keeping your eye on with this trend?

ADAM PLATT: Well, Minneapolis's effort to create a Labor Standards Board kind of ran aground on questions of the makeup of the boards. The city council and the mayor could not agree on it. And they did not have enough of a majority to override the mayor on it. And I don't know whether I would say it's dead or it's paused, but it clearly is not moving forward.

There are a couple of states that have Labor Standards Boards that are specific to certain industry sectors. What Minneapolis was looking at doing was much broader and more complex. It's certainly something I'm going to keep an eye on. And it was definitely a policy initiative that really did initiate at the union level. Unions have a lot of voice in the city of Minneapolis right now within government. And they are listened to.

But this particular effort was a little bit broader than I think the city, the mayor wanted, and certainly business wanted. And if it can be refined and maybe the scope somewhat narrowed, it might prove to be successful and be implemented.

NINA MOINI: All right. Adam Platt, thank you so much for stopping by Minnesota Now and sharing your perspective with us. Really appreciate you.

ADAM PLATT: My pleasure.

NINA MOINI: That was Adam Platt, the executive editor of Twin Cities Business.