Food Fight: Restaurants in the Thick of Today’s Toughest Labor and Employment Challenges

Restaurant success used to be all about a winning menu, appealing décor and strong word of mouth. Nowadays, success also has a lot to do with compliance of labor and employment matters, as restaurants frequently find themselves at the center of thorny HR disputes. “Wage setting and grievances, termination issues, predictive scheduling, sick time provisions, tip-pooling limitations, #MeToo claims and joint employment squabbles between franchisors and franchisees are just the tip of the iceberg of employment concerns restaurateurs must stay on top of,” said Joel O’Malley with Nilan Johnson Lewis, who represented restaurants in four of Minnesota’s five recent, high-profile tip-pooling cases. O’Malley notes that some restaurants have requirements many owners think don’t pertain to them; for example: complying with employee no-poaching rules or avoiding antitrust issues when they try to lure talent from other eateries or fix their prices to maintain their thin margins. “Plus, all these issues can be amplified by social media, which are used often in their premises by patrons and employees and put employers in a bind to make swift and lasting decisions,” he adds. With restaurant unions failing to gain ground and federal policies fluctuating with changes in Presidential administrations, O’Malley sees restaurant owners increasingly turning to their local and state legislatures to pass employment policies that can bring relief. “Restaurants located in large cities are feeling it the hardest, and some are choosing to relocate to more suburban areas where minimum wage and other requirements are more feasible.” With all this legal risk, O’Malley recommends restaurants audit their labor policies and practices to provide peace of mind so the focus can return to customers, not compliance. Contact Joel O’Malley at or 612.305.7757 or jomalley@nilanjohnson.com.

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