Boundary Stone tweet tips off ruckus over restaurant minimum wage bill

November 19, 2013

If bar owners needed a reminder to think carefully before talking about politics and other sensitive topics on Twitter, they got it today.

Gareth Croke, one of the owners of Bloomingdale's Boundary Stone, does not support a bill before the D.C. City Council that would raise the minimum wage for bartenders, servers and other tipped employees from $2.77 to $8.25 per hour. Though he's not a member of the Restaurant Association Metropolitan Washington, which represents more than 800 restaurants and bars, Croke signed an online petition that the group had created. And then he did something he regrets: he used the petition site's "Share on Twitter" button to tweet his support of the petition to Boundary Stone's 2,600 followers.

Boundary Stone
(Twitter.com)

The blowback was immediate, unequivocal and intense. Patrons who said they were in Boundary Stone "3x this week" expressed disappointment about the tweet's language. Others said they wouldn't go back until Boundary Stone gave its tipped employees minimum wage. Some said they'd never return. A counter petition sprung up on MoveOn.org, demanding a raise for all tipped employees. @BoundaryStoneDC began trending on Twitter, though for all the wrong reasons.

Some tweets directed at the bar demanded to know why Boundary Stone wants employees to "keep making a minimum wage of just $2.77 an hour," but that's not true – to do so would be illegal, and it gets to the heart of the industry's position: Restaurant owners are already required to pay all employees the city's minimum wage of $8.25 an hour, whether they're tipped or not. The difference is that the wage is calculated for bartenders and servers by taking their base salary – as low as $2.77 per hour, but also higher – and adding whatever their share of gratuities is. This usually exceeds the $8.25 per-hour minimum wage, owners and employees say, sometimes by a level of two or three times. But if it does not average out over the course of a week, bar owners are legally required to pay the difference between the worker's wage and $8.25.

Croke, who points out that he has "worked as a tipped employee in this city for over a decade," says that he supports paying all employees at least the minimum wage, and that his front-of-house employees are "comfortable." But if his business was required to pay every employee at least $6 more an hour before tips, there would be repercussions. Prices would rise noticeably, thanks to the industry's narrow profit margins. On slower nights, servers and bartenders would be sent home early, meaning some would make less than they do now. "I don't think people realize the trickle down effect of what it would do, stunting the great restaurant industry," he says.

Croke’s tweet (which has since been deleted) may be the lone public comment by a local restaurant opposing an increase in the minimum wage for tipped workers, but the Bloomingdale eatery is not the only one taking such a stance, said Kathy Hollinger, president of the Restaurant Association Metropolitan Washington.

The association says it conducted a survey of its members in August (supplemented with neighborhood meetings) and found that “99.9 percent” were against increasing the minimum wage for tipped employees, Hollinger noted. The members’ opposition stands in contrast to their general support of a “modest” increase in the minimum wage for other workers, such as cooks and other back-of-the-house staff, Hollinger added.

RAMW doesn’t want to suggest a figure where the minimum wage for non-tipped workers should be set, Hollinger said. The association wants the minimum increased after a “thoughtful process” to determine what would be the best hourly wage for both workers and employers.

As for tipped employees, however, the RAMW president says that advocates such as Restaurant Opportunities Centers United are looking for solutions to a problem that doesn’t exist. Tipped employees, she said, are “making much more than minimum wage.” Some RAMW members recently informed the D.C. Council that their tipped employers earned, depending on what kind of restaurant they worked at, between $20 and $35 an hour, Hollinger said.

Restaurateur Jeff Black, owner of BlackSalt and Pearl Dive Oyster Palace, among other places, says members of his wait staff earn between $85,000 and $150,000 annually. “My waiters make more money than” D.C. Council members, Black said. “They don’t need a raise.”

The restaurant association has been actively campaigning on the minimum wage issue, Hollinger said. RAMW representatives have paid visits to the Wilson Building to educate D.C. Council members on the association’s positions. The petition that Boundary Stone signed and tweeted is part of that ongoing campaign. Hollinger said the association wanted to make sure restaurant voices were heard, because a change in the tipped minimum wage “would have a dramatic effort on the way business is done.”

Geoff Tracy, owner of the Chef Geoff’s chain and chairman of the RAMW board, said that if he were forced to pay $5 more per hour for every tipped employee, the increase would translate into a “half-million dollar expense” annually. “I don’t need to be constantly jacking up prices or constantly having my margins squeezed,” said Tracy. “The margins are already slim as they are.”

The only ones who would benefit from an increase in tipped employee wages would be the government, Black added. A $5 or $6 increase in hourly wages wouldn’t mean much to a tipped employee already earning six figures, he said. It would just generate more taxes for the government, while depriving restaurateurs of a tip credit they currently receive.

“This is low-hanging fruit,” Black said. “This is going to hurt small businesses.”

Hollinger said that many of the advocates pushing for change just don’t understand the restaurant industry well.

Asher Huey would disagree with that notion. He’s a former online organizer for a political consulting firm; he now handles social media outreach for the American Federation of Teachers. But he said he was acting on his own this afternoon when he saw the tweet from Boundary Stone. By 2 p.m., Huey had created a MoveOn.org petition, urging Boundary Stone to “publicly guarantee a wage increase for your tipped workers.” By 6:40 p.m. today, it already had 118 signatures.

“This is my neighborhood bar that I go to regularly with my friends,” Huey said. “I’m mad about this.”

Huey doesn’t buy the notion that an increase in the minimum wage for tipped employees would hurt restaurants. He’s from California, where restaurant owners already have to cover waitstaff salaries, and there are plenty of establishments “still thriving” in the state, Huey said. “When I came to D.C., I was shocked to learn that wasn’t the case anywhere here,” he added.

The activist said he doesn’t mind going after Boundary Stone when other restaurants hold the same positions. “They put themselves in the front line of the campaign,” Huey said. “If they don’t walk back, I’m not going to be going back there. A lot of people feel the same way.”

Boundary Stone elaborated on its position in a Facebook post Tuesday night:

"We do not stand in opposition to a bill for fair wages; we want all workers to be treated fairly and earn a wage which gives everyone a quality of life ... As a business, we are required to ensure that if a tipped employee does not make $8.25 hour, we will make up the difference. In our two and half years of business, we have NEVER had to make up the difference. We think this fact speaks to the strength and quality of our current system here in DC."

Geoff Tracy understands the painful position that Boundary Stone finds itself in. He was there last month when more than 100 people testified in a D.C. Council hearing on Oct. 28 about the minimum wage and sick leave proposals. He had protestors outside the downtown location of Chef Geoff’s. Tracy called them “fake protestors” because he believed they were hired by organizers.

“None of those people who were protestors were organic protestors,” he said. “They don’t want to have to real conversation. They just want to tweet.”

Yes, but did they have any impact on your business?

“It didn’t have any impact that day,” he said, nor any afterward.

Perhaps Croke can learn from other bars that have found themselves in similar situations. John Andrade of Meridian Pint found himself under fire earlier this year when he told DCist that he was against being required to provide paid sick days for employees. After an online uproar, including petitions against his bar, Andrade issued a mea culpa and began offering paid sick leave to all employees. In early 2011, the Black Squirrel drew threats of boycotts after co-owner Tom Knott wrote an post on the bar's Web site claiming illegal immigrants come to America to "to ply their illicit trades, take up with gangs and live in the shadow of polite society." The bar later expanded to a third floor of its building, where it offers one of the largest beer selections in the city. Knott, meanwhile, pulled out of day-to-day operations to work on opening the Black Squirrel Brewing Company, which still hasn't materialized.

What hurts, Croke says, is that Boundary Stone is seen as "the example for 'We treat our employees like crap,' and that's furthest from the truth," he says. He plans a meeting with his staff, and he's learned his lesson. "I shouldn't have put the tweet out there."

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