Labor & Employment

  • Print Page
  • Email Page
  • Share this page

Attack on Quick Service Restaurants - Escalating Campaign for Increased Minimum Wage and the Pending Fast Food Strike

August 28, 2013

PDF Article PDF

(Living History Lesson on Union Organization Drives for Small Business - AKA Fight for $15, Social Media and "Occupy 2.0")

Since 2009, the federal minimum wage has been $7.25 per hour. States can legislate a higher minimum wage. At $8 per hour, California's minimum wage is among the highest in the country. Most states don't allow individual cities to set their own minimum wages. California permits municipalities to set their own wage, and two have done so: (1) San Francisco’s minimum wage, adopted in 2003 and indexed to inflation, is now $10.55, the highest in the nation; and (2) San Jose’s minimum wage, adopted this past spring is $10 per hour, and is also tied to inflation. Similar to local minimum wage ordinances, still other California Cities have a “living wage ordinance” – these mandate that government service contracts go only to businesses that pay workers a specified minimum compensation level. Finally, in mid-August 2013, the Senate Appropriates committee had a hearing on AB 10 (Alejo) to raise the State’s minimum wage to $9.25 per hour by 2016 – and then pegging minimum wage to inflation thereafter. Unions argue this is not enough.

Towards this end, fast food restaurants are at the forefront of another battle – this Thursday’s (8/29/13) planned social-media-inspired strike. While fast food restaurant workers have long struggled to form unions, unions like the SEIU and the UFCW are funding an employee movement calling itself the “Fight for $15,” “Fast Food Forward,” and “Low Pay is Not Okay” that hopes to push retail and fast food minimum wages to $15 per hour. While the movement started last year in New York and spread along the East Coast and Mid West, the battle formally hits all of California this week. A coalition of labor, religious and other groups are calling for a nationwide strike of fast-food employees on Thursday, August 29th. On Monday, August 26th, at least one Southern California congresswoman formally supported the $15 movement.

Whether or not the movement raises the minimum wage to $15 per hour is yet to be seen, but franchisees have front row seats on the next wave of union organizing tool. Social media is allowing unions to organize workers efficiently and in a way that may have tipped the scales. The themes of Fight for $15, Fast Food Forward and Low Pay is Not Okay are remarkably similar to the Occupy Movement – CEOs and shareholders make too much money. Unfortunately for quick-service restaurant franchises, the fast-food sector is simply a high-profile target for unions attempting to gain members in the new service-based economy.

Strike Hurts Franchisees More Than Corporations and Wealthy CEOs

Thursday’s strike purports to target McDonalds, KFC, Taco Bell, Burger King, Domino’s, Dunkin’ Donuts, Papa John’s and others chains during peak mealtimes. Employees from Starbucks, Peet’s Coffee and Tea, and Whole Foods Markets have expressed interest. The familiar theme is this: executive excess. The strike will hurt small business most at a time when many franchisees are struggling. One expert in the quick service restaurant industry has stated that a $15 per hour minimum wage would put 15 to 20 percent of small businesses out of business. Indeed, franchisors are frequently looking to do away with small franchisees, replacing them with multi- and mega-unit franchisees. And five years into the Great Recession, many restaurants are on the verge of bankruptcy with changing American diets, 4.5% gross-sale royalty rates, 4% gross sale advertising rates, gross-sale percentage rent requirements, franchisor-required money-losing value menus, franchisor-required extended hour requirements, franchisor-required mandatory equipment upgrades, franchisor-required remodels, franchisor-required renewal fees, and franchisor-required indemnity and audit expenses.

What Can Franchisees and Other Small Businesses Do?

You can anticipate there will be substantial rhetoric related to this activity. Employers should consider how, or if, they’ll choose to respond to statements made in support of union positions. While it is permissible to tell employees about any untrue or misleading statements made during the strike by handbill, or through any union activity, franchisees should consult with traditional labor law experts as they develop any response to union activity. There are two types of strikes: (1) Unfair Labor Practice Strikes, and (2) Economic Strikes. This, too, is an area to consult with your labor counsel. In any strike, an employer has the right to replace (not fire) strikers. In an unfair labor strike, while strikers can be replaced, they must be reinstated at the end of the strike. In contrast, in an economic strike, strikers may be permanently replaced and only offered reinstatement when an opening occurs. Here, after the strike, the following might occur: (a) circulations of petitions for living wages; (b) efforts to identify leaders within your workforce; (c) efforts to bring workers together within geographic locations; (d) distribution and signing of union authorization cards; and (e) quickly filed unionization efforts against dozens of restaurants. Responses should be in consultation with labor counsel.

Hanson Bridgett has extensive experience dealing with labor unions and the issues related to a unionized work force. Hanson Bridgett attorneys also have unique experience representing multi-employer business groups in an effort to help save resources. Further, attorneys in Hanson Bridgett’s labor and employment group have worked at the National Labor Relations Board (NLRB). We recognize most employers hope to avoid unionization and work with clients to remedy situations that might result in organizing drives. When a formal organizing drive does take place, we outline options for the employer and assist during the union election campaign.

Related Links and Resources:

For more information, please contact:

Kurt Franklin

415-995-5086 Direct Phone
415-995-3482 Fax

Email Attorney


COVID-19 Resource Center

Join Our Mailing List

Related Practices