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San Francisco Eases Off on Banning Free-Food Company Cafeterias

Oct. 26, 2018, 5:04 PM

San Francisco city planners, responding to myriad complaints, backtracked on a proposal to ban companies from opening cafeterias offering free food to employees.

The city Planning Commission, after more than an hour of testimony, voted unanimously Oct. 25 to condition approval of new workplace cafeterias on public access and that companies provide workers with vouchers to use at local restaurants.

Employee cafeterias are part of the ecosystem at tech companies with offices in the city, including Alphabet Inc.’s Google, Twitter Inc., and Facebook Inc.

Business, including tech companies, and even labor howled in July as the restaurant industry-backed proposal began its journey from idea to law. The proposed ordinance, as approved by planners, recommends using carrots—such as offering businesses looser code requirements for approval of new facilities if private cafeterias are opened to the public and employers give workers vouchers to use at neighborhood eateries. It now returns to the Board of Supervisors for debate and likely further amending.

“I think the staff recommendations were good, but I think we need a lot more thought” and data, commission President Richard Hillis said.

With the recommendations, “this whole thing needs more time to bake,” Commissioner Milicent Johnson said before commissioners voted to send the proposal to the supervisors’ Land Use Committee for review later this fall.

Conversation Starter

Supervisors in July proposed an outright ban on new on-site cafeterias. The ban is backed by the Golden Gate Restaurant Association, which represents the 4,400 largely independent restaurants in the city. The association wants to encourage workers to patronize local eateries.

“I know we’re taking a hard line and saying we want to ban them all together,” Supervisor Ahsha Safaí told commissioners at the meeting. And it’s started “a national conversation, because these kind of cafeterias are all over the major cities throughout the United States,” about “what kind of impact they’re having on the local economy, positive and negative.”

Since the July announcement, companies that have employer-paid cafeterias—including Airbnb, Uber, Lyft, Google, and Facebook—have been meeting with city and labor representatives to discuss the proposal, Safaí told Bloomberg Law. Workers at only two of 44 in-house, employer-paid cafeterias in San Francisco are unionized, he said.

Labor Issues

The discussion comes as San Francisco is finalizing a plan to add 6 million square feet of office space in the South of Market Street (SoMa) neighborhood popular for internet and app company offices, including Airbnb and Pinterest Inc. The plan aims to transform that portion of the city over 25 years, replacing auto repair and machine shops with high-rise office buildings and high-density housing.

“We can create tens of thousands of new jobs in the city and it will only make problems worse. Every crisis facing our city, from housing to health care, traces back to income inequality. And the only way to address that is finding ways to support workers who want to organize” and fight for better standards, Ian Lewis, UNITE HERE Local 2 strategic affairs director, told the commissioners.

The proposed ordinance targets a segment of the food service industry in which workers actually have a chance to organize into a union without the risk of employer retaliation, Lewis told commissioners in an email comment before the meeting. Companies operating employee-owned cafeterias “are much more likely to ensure a fair process for unionization than free-standing restaurants.”

The union standard hourly wage in San Francisco cafeterias is $20 to $23 an hour, plus free family health care, pension, and benefits, Lewis told commissioners.

UAW-Airbnb

Airbnb cafeteria workers are unionized. The United Auto Workers-represented employees earn a starting average wage of $19.50 an hour and managers’ starting salary is $50,000 annually, said Dante Ballard, Local 2510 vice president.

Bon Appétit Management Co. food service employees working at Airbnb in February ratified their first contract. A ban on new workplace cafeterias would discourage the creation of good-paying jobs as Airbnb expands in the city, Ballard told the commission.

Airbnb catering employees get stable hours, have off nights and weekends, get paid holidays, and earn time-and-a-half or double-time pay when working a holiday. “None of this happens at a restaurant,” Ballard said.

Hiring, Wage Crunch

“While it’s true that restaurant jobs have less ideal hours since their business times are evening and weekends, industry wages are at all all-time high as there’s a massive shortage of workers in the industry,” Golden Gate Restaurant Association Executive Director Gwyneth Borden said in a letter to the commission.

San Francisco’s hot job market translated into a September unemployment rate of 2.2 percent. And that tight market means higher pay to attract food service workers as employees at in-house cafeterias.

“Some of our employers are paying on average 30 percent more than the market,” Jennifer Stojkovic, executive director of sf.citi, the San Francisco Citizens Initiative for Technology and Innovation, told commissioners. The nonprofit links the city’s technology community with policymakers.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Phil Kushin at pkushin@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com