Tonight, our City Council will consider adoption of its proposed “Fair Work Week” (FWW) scheduling and predictive pay ordinance, an ordinance deemed the “highest priority” by current Mayor Dianne Martinez. Two of the other councilmembers that are pushing this, Ruth Atkin and Jac Asher, will soon be stepping down and our city will have three new councilmembers. It is this next council that will be left to deal with the impacts of the ordinance and the growing reputation of Emeryville as “Anti-Business” and a model city for labor groups to push their experimental legislation. While it is unlikely that the results of this election will be a considerable shift in political ideology, it behooves our current council to consider the incoming council and the fallout from this in their decision.
Back in August when the study session was held, SF was the only city in the nation that had implemented anything remotely close to what Emeryville is proposing with its Formula Retail Employee Rights Ordinance. Since then, Seattle was the first city in the nation to implement something closer to what Emeryville is proposing. So San Francisco (population: 864,816), Seattle (population: 684,451) and now Emeryville, CA (population 11,721).
FWW is hardly a home-grown, grass-roots movement though. The Center for Popular Democracy (CPD) tried in vain to push this through in Albuquerque with one councilmember noting “I’m in favor of any legislation that helps people, but not at the expense of small business owners, and definitely not at the expense of the very people it’s designed to help.” CPD then struck gold by finding our local government who have shown to be all too willing to volunteer our city to be the model city for experimental legislation.
After the August Study Session, Economic Development and Housing Manager Chad Smalley was directed to draft an ordinance to satisfy the council directed objectives of:
- Increase stability of schedules for retail and restaurant workers
- Reduce employee turnover in retail and restaurant businesses
- Increase the number of hours worked by individual employees (i.e., decrease “underemployment”).
Through the selection of various Ordinance options, Council directed staff to draft an ordinance that includes the following elements:
- Employers must provide two weeks’ advance notice of work schedules to employees.
- Employees have a right to decline any employer-initiated changes to the posted work schedule that occur less than seven days but more than 24 hours before the changed work shift.
- Employers must provide predictability pay to employees for all employer-initiated changes to the posted work schedule that occur less than 24 hours before the changed work shift.
- Predictability pay is not due for schedule changes due to natural disasters, power failures, etc.
- Employees have a right to decline back-to-back closing and opening shifts separated by 11 hours or less (“clopenings”).
- Employees have a right to request a flexible work arrangement.
- Employers must offer additional hours to existing part-time employees before hiring new employees.
- Employers are prohibited from retaliating against employees for exercising their rights under the ordinance.
The covered employer list [PDF] that staff came up with for consideration is broken up into two employer options:
Option 1: Retail and “Fast Food” Businesses with 12 or more locations worldwide, and 16 or more employees in Emeryville (This option would apply to 46 business. 7 which are classified as “Fast Food” businesses).
Option 2: Retail Businesses with 56 or more employees globally, and “Fast Food” businesses with 56 or more employees globally and 20 employees or more locally (This option would apply to 83 business. 6 which are classified as “Fast Food” businesses).
Council wisely opted to make an exemption for small business or risk further alienating them and their patrons. Like our MWO, Unions have successfully advocated for an exemption for themselves and defer to their own Collective Bargaining Agreements that may or may not contain the same level of employee protections.
Opposition by Economic Development Advisory Committee
In a city that effectively killed off their Chamber of Commerce, the only economic voice is our city is the Economic Development Advisory Committee (EDAC). A relatively toothless committee that only meets quarterly. A committee consisting of a mixture of Small Business, Large business and resident representatives. The EDAC met on September 21st to review and provide recommendations on the proposed ordinance.
For the most part, larger corporations have stayed out of the conversation opting to avoid the negative PR of haggling with Labor groups and the sideshow that can be City Council meetings. In attendance for this meeting were representatives of Starbucks and IKEA, two of the purported “good actors” among Emeryville entry-level employers, good actors that would be penalized all the same for the behavior of the few bad actors.
Both companies noted that they were already complying with most of the items that the law was touting (In fact both offer three weeks advanced scheduling). “We take our values very seriously” noted IKEA HR Manager Mildred Broadwater. “When we need to call workers in, it is a positive for them. If they’re not able to come in when called, they just say ‘no’ .”
“Where is this problem? We question if there is a need for this kind of legislation in Emeryville?” noted Kim Winston of Starbucks Corporate who cited the data provided by staff that indicated only 12% of employees polled noted short-notice schedule changes as a problem for them. “I don’t believe the purpose of regulation should be to [impact] the 10-20% of bad actors, rather, let’s move forward and illuminate the good work that responsible employers are doing in this city to encourage good behavior and set a model for the bad actors”. Starbucks offers healthcare benefits to all employees working more than 20 hours per week and even offers tuition assistance through its College Achievement Plan. 70% of Starbucks employees are said to be students or aspiring students.
Committee chair Bill Rueter, who has ties to EBASE through his involvement in RULE, made an impassioned plea for the committee to support the ordinance but was repeatedly stifled. “There is no good research as pointed out multiple times in this [referring to the staff report]” noted small business representative Krisna Hanks who also noted that the MWO should be studied prior to any new legislation. “We need some data! We need some research. What’s really happened? How many closures have there been? What are the changes that have occurred?” Hanks comments seemed to echo others on the committee who were reluctant to support yet another labor group initiated piece of legislation without first understanding the impacts of our Minimum Wage Ordinance.
The EDAC ultimately voted 5 to 1 not to support it and that further study should be done before adopting any variation of the FWW ordinance. “We’re not ready to be the leader” added committee member Ken Bukowski.
It is unlikely the EDAC’s recommendation will have any bearing on council’s decision tonight as decisions by this council tend to not be rooted in research or economics but in ideology or as Mayor Dianne Martinez put it “taking a leap of faith“.
Unknown impacts of legislation to address “Underemployment”.
If the ordinance just required two weeks advanced scheduling and eliminated “clopenings” (back-to-back closing/opening shifts which are rare), I think there would be little opposition to it. The so-called “predictability pay” and legislation that “requires Employers must offer additional hours to existing part-time employees before hiring new employees” are the biggest sticking points and the biggest unknowns. How will employers respond to being told who they have to promote from part-time to full-time employees? How will companies respond when they are penalized with “predictability pay” when they need to call someone to cover for a sick employee (how much longer will those evening lines get at our already understaffed Pak N Save?).
Emeryville effectively wants to force employers to promote existing part-time employees to full-time instead of a merit based system. “If you have [part-time] people who are working out, its common sense that you would want to give extra [hours] to them” noted longtime resident Betsy Cooley. “I think that regulations should not be put in place to force [employers] to convert someone into a full-time employee. I think they should have the option to hire whomever they want.”
It’s unpopular to say this but there are indeed mediocre and even “bad” employees out there and employers sometimes need incentive to get them to achieve. What message are we sending to “good” employees that promotions will be based on tenure, not merit?
Which Employees will this benefit and which will it hurt?
As with most regulations, this will benefit some at the expense of others. The workers that will be hurt the most are expected to be those that covet flexibility and those who are already on the margins of employability (i.e. the most vulnerable). “There is an assumption that flexible scheduling is always terrible,” noted Seattle employment lawyer Catharine Morisset in this Puget Sound Business Journal article. Morisset explained that many restaurant employees prefer to work a closing shift Saturday and the brunch shift Sunday to earn more money. This option will likely be removed if Employers are penalized for allowing this preference.
Labor Lobbyists propping up “bad actors” to push measure?
At the last FWW Study Session, a vast majority of the speakers who spoke in favor of the measure identified themselves as employees of Taco Bell, Burger King and KFC (we’ll presume the Emeryville location of these chains). These are the reported “bad actors” that the legislation is intended to blanket. So why not push through an ordinance that just targets Fast Food chains? We know they’re the bad actors and few will have sympathy if they leave our town entirely (except of course the patrons of these establishment that tend to be overwhelmingly low-income people … hmmmm). Labor groups have determined that Emeryville can be exploited by lobbyists and is amenable to experimental legislation.
EBASE Lobbyist Jennifer Lin, who was instrumental in lobbying Emeryville’s Minimum Wage Ordinance, has already taken to the media to rally support for the measure with an East Bay Times guest Commentary piece. The feature image of the piece is a McDonalds drive-thru to reinforce them as the driving force behind this (FTR: Emeryville does not have a McDonalds). Lin used her guest commentary piece to try to spin support by the EDAC and cites the “growing lines of cars and customers coming in and out of Emeryville’s shopping centers” as evidence that any economic impact will be mitigated by our city’s economic momentum. Labor Activists will in fact be holding a press conference prior to tonight’s council meeting to draw further attention to what is expected to be followed by a victory celebration later in the evening.
The case for secure scheduling in Emeryville, from a worker: https://t.co/vci2RI6WeU
— CPD Action (@CPDAction) October 8, 2016
Will Barnes & Noble Survive FWW?
Another one of the “bad actors” that is being touted by labor activists is Barnes & Noble. A company that we already know to be struggling. One gentleman who has been at the crux of the debate has identified himself as a former Barnes & Noble employee. Kelby Peeler now identifies himself as an organizer for ACCE (Alliance of Californians for Community Empowerment) which is one of the labor groups that is lobbying this measure.
B&N’s nook e-reader got killed by Amazon’s Kindle, they continue to get hammered by online sales and recently reduced their footprint at Bay Street to make way for Uniqlo. They already have plans to close an additional 197 stores by 2022. When B&N decides which Bay Area stores it will close, will it look to less-restrictive El Cerrito … or Emeryville? If B&N ever decides it’s had enough of Emeryville’s regulations, our city will be without a book store after also losing Borders in 2011.
The Highest priority for Emeryville … or Dianne Martinez’ political Career?
I like Mayor Martinez. She’s personable, responsive, even likable. But Martinez has shown political ambition in her stint as Mayor and it’s clear that she wants to get noticed within local Democratic Party circles and capitalize on her “electability”. Martinez stated that this was her “highest priority” during the council priority discussions. A priority that seems to belie the priorities of neighbors I’ve spoken with and the recent poll we administered seems to back this up (only 2% of responders). While it may be her highest priority, it’s not even in the top 10 of city priorities from my personal conversations with residents.
Martinez correctly notes we’re lacking the resources to pursue all these issues but it’s about directing resources to the appropriate priorities, not her personal priorities. Priorities that impact the greatest amount of residents, not Jennifer Lin and her professional standing. Not surprisingly, Martinez’ hand-picked, SEIU-employed candidate Ally Medina already listed FWW as a top priority for her.
Should the City “take care of its own” first?
After the MWO debate, the conversation by some on council turned to how we could help the small businesses in our city. What could we do to offset the impacts that were hurting them more than the multi-national chains that were the target of their legislation. The council teased at providing relief to small business and even hosting a Study Session to vet ways they could offset the impacts. These has just never happened, and have never been a real priority for our current council. It almost seems as if the outgoing councilmembers just want to avoid having to deal with the lingering animosity that is building among small business owners.
The city has already concluded its one year MWO study conducted by Mills College and findings should be ready soon. The prudent thing to do would be to understand these impacts before ushering in yet another variable to employment in our city. We should also consider understanding the impacts of FWW on Seattle and use this knowledge to create an ordinance tailored to our city that accomplishes the goals we want instead of just being “first”.
Read the Agenda with the staff report and related documents on the City Website.
You can watch the full EDAC meeting in the feature area of this post.