Santa Monica Business Leaders Seek to Block Proposed Labor Peace Agreements

By Jorge Casuso

June 25, 2018 -- Santa Monica's business leaders will attempt to stave off a proposal before the City Council Tuesday that would pave the way for unionizing restaurants on City property.

Under the proposal, the 27 City lease-holders -- most of them small locally-owned restaurants who pay a total of $4.5 million a year in rent -- would be required to sign "Labor Peace Agreements" (LPAs) that make it easier to unionize.

Restaurant owners and business leaders fear the agreements would make it difficult for the restaurants -- which are already struggling with a minimum wage hike -- to compete with those on private property.

"One of our primary concerns with the proposal," said Santa Monica Chamber of Commerce President and CEO Laurel Rosen, "is the competitive disadvantage that it would place on businesses on city property, relative to those on private land not subject to the new rule."

The Council's interest in requiring labor peace agreements gained momentum after The Spitfire Grill, a local eatery at the Santa Monica Airport, was picketed by the Hotel Employees and Restaurant Employees (H.E.R.E.) Union Local 11.

The union -- which has long been a powerful force in local politics, helping elect pro-labor Council members -- picketed the restaurant four times during peak business hours.

Each incident cost the business about $1,000 ("Santa Monica Restaurateurs Protest 'Labor-Peace' Agreements," October 26, 2017).

Local union officials said the demonstrations were an attempt to "protect workers’ job security" in the wake of the closure of Typhoon restaurant ("Santa Monica Airport's Typhoon Restaurant to Close After City Hikes Rent," October 11, 2016).

Union representatives declined to provide comments for this story.

The pickets, which made headlines, placed the issue of labor peace agreements back on the front burner for the Council.

It also mobilized local restaurant owners, who already were grappling with the City's minimum wage law approved in January 2016 ("Santa Monica City Council Votes to Hike Hourly Minimum Wage to $15 an Hour by 2020," January 14, 2016).

On Tuesday, the Council will consider a proposal based on a model at San Francisco Airport (SFO) that "could provide a more streamlined LPA negotiation process, potentially minimizing expenses for prospective food-service operators and labor organizations."

"In the SFO model, the LPA process requires the employer to enter into a Labor Peace/Card Check Agreement within 30 days of a labor organization’s request," staff wrote in its report.

"In the event the labor organization and the employer are unable to negotiate an agreement within the 30-day period, the parties are then bound by the Model Card Check Agreement."

The Council also could consider keeping the existing Labor Peace Provisions in its leasing contracts, given that "the city has not experienced work stoppages at any of the city’s leasehold properties," staff said.

The Council also could seek higher base rents "to avoid fluctuations in revenues and minimize impacts from labor issues," staff said.

Local restaurateur Fred Deni, who owns Back on the Beach Café on City land near the Annenberg Community Beach House, says the proposal jeopardizes the relationship to staff and "our ability to assemble a team that knows our business."

The restaurant's employees include high school students hired during the busy summer season, when the the beach café's staff swells from 22 to more than 80, Deni said. Seven of the restaurant's employees have worked at the restaurant for more than 20 years, he said.

"Our local and return customers know the employees on a personal level," Deni, who also owns Back on Broadway, wrote in a letter to the Council.

"If we were, down the line, forced to hire only union-selected servers, the strong bonds between ownership and employees would be weakened, and the familial character of Back on the Beach would change forever."

David Houston, who owns Barneys Beanery on the Promenade, said his restaurant "would not be able to shoulder the burdens imposed through forced unionization."

"Who asked for this?" Houston wrote in a letter to the Council. "Our staff is happy. They are protected by state and local labor laws and they do quite well for themselves.

"This seems like a solution in search of a problem."

Business leaders note that the City’s leasing guidelines already protect workers seeking to organize.

"The notion that LPAs represent an extra layer of protection to the city for revenue streams from City-owned properties is specious, since, notably, there is no history in Santa Monica of labor disputes on those properties," the Santa Monica Pier Lessees Association wrote to the Council.

"In fact, the only labor issues that have affected the pier in the past 25 years have come about as a result of the union disrupting, or threatening to disrupt, the approval process for two restaurants occupying prominent Pier spaces if they did not accept LPAs."