Not so sweet by David Forbes October 12, 2015

Tupelo Honey is touted as an Asheville success story. But some workers say that hides a reality of wage cuts and worsening conditions. Now they’re pushing back

Above: Tupelo Honey’s original downtown location

UPDATE, Jan. 11: Following the public campaign and Blade investigation, wage cuts for Tupelo Honey support staff in three main locations have been reversed.

Even on a foggy Monday morning, there’s a line and a considerable wait for Tupelo Honey’s downtown Asheville location. Founded in 2000, the restaurant became at first a local mainstay, then one of the city’s flagship destinations, winning recognitions from food shows and newspapers around the country.

Its seemingly upward trajectory didn’t stop there. Sold to current owner Steve Frabitore — a South Florida power equipment company owner — in 2008, the business first expanded to a South Asheville location in 2010 with then-Mayor Terry Bellamy cutting the ribbon. It then rapidly boomed across the Southeast, opening locations in Johnson City, Charlotte, Myrtle Beach, Raleigh and other cities. That push hasn’t stopped, as the company plans to launch restaurants in Atlanta and Franklin, Tenn.

“How Sweet it Is” declared the headline for a “featured capitalist” story at Capital At Play last year focusing on Frabitore and the business’ boom.

The piece exults about the expansion:

From this original location, the Tupelo Honey brand has grown to six locations in three states: two locations in Asheville, and others in Charlotte, North Carolina, Greenville, South Carolina, Knoxville, Tennessee, and Chattanooga, Tennessee. The business employs over 600 people and serves over 40,000 customers each week. Their seventh location, in Johnson City, Tennessee, will open in May of this year. In 2014, revenue is expected to exceed a whopping $24 million. And, they’re not stopping there. The booming success of this business is due largely to the vision, leadership, and business savvy of one man: CEO Steve Frabitore. In 2008 he recognized a brand and a product that had unlimited potential. Over six short years, he has applied laser-focused financial analytics and powerful market research to grow the brand. He has grown a team based on hiring only the best candidates, and is passionate about creating opportunity for his employees. And, he recognizes the importance of connecting in a deep and meaningful way with the local communities that welcome his restaurants.

Further, “Frabitore says that none of their employees are paid minimum wage; rather, they are a Living Wage Certified business and aim for their pay to be greater than the 75th percentile of the industry average.” It also cites other benefits like cash bonuses.

But some of Tupelo Honey’s workers tell a very different story. They say wages for support staff were steeply cut during the business’ boom. Those bonuses? Gone, and the same with free shift meals. The living wage certification? Dropped.

Recently, cooperating with the Asheville Sustainable Restaurant Workforce, a local service workers group and CoWorker.org, labor nonprofit petition website, some of those workers are pushing to reverse a $3 an hour pay cut they say leaves essential support staff struggling to make ends meet.

“Patrons might not know that this growth has come at a personal cost for employees,” the petition calling for the cuts’ reversal declares of Tupelo Honey’s expansion.

It continues:

Tupelo Honey Café employees know that with growth comes change. We have absorbed our fair share of change. From eliminating free food while working to scrapping incentive based pay raises for tipped employees, it’s getting harder and harder to feel like a valued member of the team. We have also watched as our company pads its profit margins and expands the brand on the backs of the lowest paid employees and their families.

So far, the petition has nearly 1,200 signatures.

‘This is bad policy’

About 30 people gathered in Blue Dream Curry House — a restaurant ASRW gave a “Best Business Practice” award for paying its workers a living wage — on Sept. 21 to kick off the petition drive.

The group, founded last year, was set up to advocate for food service workers. Despite a major tourism boom, Asheville area food service workers have actually seen their median wages decline over the past year according to federal statistics. So far, the group had concentrated on educating workers about their legal rights like protections from wage theft and harassment, as well as asking businesses to institute fairer practices.

But Alia Todd, one of ASRW’s founders, has worked for Tupelo Honey for nearly five years. From her view, during that time things haven’t improved for the employees responsible for serving all those customers or, for that matter, all those expansion and profits.

“This is a restaurant that’s been through a lot of change, that’s continuing to grow and expand and I’ve noticed some things that I don’t particularly like,” Todd told the group. “I feel as if Tupelo Honey’s really controlling the conversation about their ethics and about their business practices.”

“For year and years Tupelo Honey had support staff called bussers and paid them $5.15 an hour plus tips, they were considered valued members of the team and from what I can tell it was considered a pretty good job,” she continued. “But the company made a decision about a year ago to pretty much cut out the busser job, to fold it back in to a ‘back server’ position with a pay rate of $2.13 an hour and a share of tips. It’s not an illegal practice, but it’s certainly a bad business practice.”

Despite the cut — to the minimum for tipped employees allowed by federal law — the support staff still had the same duties as before. In fact, Todd claimed, their responsibilities had increased and they now often worked longer hours. It also put other staff in a tougher position and can even decrease the tips they receive. She notes that the wage cut was companywide.

“It’s had a ripple effect and a terrible effect on morale,” she said. “Those people who once had a pretty good job and were supported now have a pretty crappy job.”

So with co-worker Hayley Ingram, Todd announced the petition was an attempt to put popular pressure on Tupelo to change its ways.

“I don’t think Tupelo Honey’s an evil company, but this is bad policy and it should change,” she said. “This is a company that has a recent record of reality not matching public relations.”

She also asserted, as did several other restaurant workers present, that Tupelo’s rates for support staff were below the industry standard, with even some corporate restaurants offering a $5 to $7 an hour rate plus tips.

Staff from Coworker.org, the non-profit site that hosts the petition, were there. Co-founder Jess Kutch claiming the organization aimed to give workers a bigger voice, whatever their demands.

“What it really means is workers having a voice in determining their wages and working conditions,” Kutch said. “Whatever that voice says is up to the workers. Every workplace has different issues and workers have different solutions to problems. We simply exist as a digital platform to help amplify those worker voices.”

In Asheville, Todd said, there’s often a “there’s a stack of resume on my desks” mentality from managers and owners. The aim of campaigns like this one was to even the score a bit so workers’ interests couldn’t simply be ignored.

The move comes as workers are increasingly organizing in Asheville, with the local chapter of the regional Raise Up for 15 movement pushing for a “$15 an hour and a union” for fast food workers and others. Such so-called “alt-labor groups” work with and independently of traditional unions, depending on the group, and they’ve come to form a major part of labor movements over the past decade.

Kutch, who’s also worked with the SEIU union and petition site Change.org, noted that she considered their organization “a part of the labor movement” as well and that in current times, that’s adapting rapidly to include multiple approaches alongside traditional labor unions.

On the whole, Todd said that the changes revealed that Tupelo’s workers, like many in Asheville, had less and less of a voice in the business they make possible, and so they were increasingly asked to bear the burdens of a changing business.

“We believe in democracy in our political systems,” she said. “But it seems to be, at least for the life of a restaurant worker in Asheville right now, it seems to be that there’s a lot of concentration of power and voice at the top and very little representation at the bottom.”

“We have to decide whether workers are just going to have things passed down to them.”

‘Go eat a biscuit’

A food service industry veteran, Nikki Hamblin helped open Tupelo Honey’s Johnson City location last year and later worked in the downtown restaurant as well. In those roles she saw the wage and benefit cuts happen firsthand.

“The back server issues was one of the first holes I saw in the fabric of the things they said they stood for,” she tells the Blade. “We were busy enough that it was o.k. for people for a bit. It was still unfair and everyone knew that, but then things started to slow down and it became clear that this was a most unfair wage and job description.”

Management, Hamblin remembers, claimed the cuts were initially just part of “restructuring” the support staff positions. But, she observed, the new positions in fact required more responsibilities for less pay.

“It was introduced in the newer stores as it opened; it was an easy way for them to get it into their corporate structure and then it couldn’t help but bleed downtown,” she added.

Hamblin attended the petition roll-out and supports ASRW’s efforts. From her experience, she asserts, the business hasn’t treated its workers very well as its profits and profile have expanded.

The disappearance of shift meals, she said, particularly made conditions worse.

“When I was downtown it just seemed good practice and the humane thing to do to give the workers — who’d been working for eight hours straight and waiting on tourists — a bowl of soup and some protein,” she says. Instead, “those are grueling shifts, but what everyone’s encouraged to do is go eat a biscuit to get them through a nine or ten hour shift.”

Even as a manager, she says she saw vacation benefits decrease considerably in her year at the company.

She notes that from her experience some corporate chains, while not places she’d laud, treat their workers better than Tupelo Honey. Currently, she believes the company is in “a dangerous grey area,” too big to be held locally accountable, but not big enough to attract the scrutiny larger businesses do.

Other workers throughout the company confirmed the details of Hamblin and Todd’s accounts of the cut in wages for support staff and declining conditions at the company.

Hamblin noted that she’s seen business vary throughout the chain: she saw some slow times in Johnson City but the downtown location consistently booming. Nonetheless, she says, the company has an obligation to pay the people who work for it well enough to make a living.

“Some of their restaurants that they had seen as cash cows maybe aren’t really doing that for them and their food’s changed quite a bit,” she tells the Blade. “But sorry, pay your workers first.”

Hamblin believes that her former co-workers deserve a shift meal and good pay in an environment where they can be honest about their concerns.

“No one should be afraid to ask for a break or afraid to ask for a meal,” Hamblin says. “They need to turn around and look back a bit on where they came from and not try to take on the inhumane approach of all these corporate chains.”

Back in the hive

Aside from the wage changes and “full-speed” expansion (as Frabitore puts it in the Capital at Play article), the business has seen other changes in recent years as well. It started selling shares, raking in $6 million by 2014, to fuel its growth, and revenues have shot up even further. At the time of that exultant profile on Frabitore last year, the company was bringing in $24 million. Just over year later, according to a company statement, that had shot up to $39 million.

Also, despite the many times Frabitore touted its participation in the local Living Wage program, the company quietly dropped its certification earlier this year. This was confirmed by Just Economics, the organization responsible for monitoring and certifying the area’s living wage businesses. The program certifies that employers pay $12.5o an hour if they don’t offer health insurance or $11 if they do, calculated as the pay necessary to make ends meet in Asheville without public or private assistance.

The Blade tried to reach Frabitore by phone and email for comment about the petition and the concerns raised by the company’s workers. So far we’ve received no response.

In a Citizen-Times article today on the petition and other food service industry organizing efforts, the Tupelo Honey owner states “we’re not looking for validation of who we are and how we run our company from any third party,” when it comes to dropping the living wage certification, claiming that they still pay well compared to the rest of the industry.

But a recent email from “The Hive,” the company’s corporate office, to downtown workers alleges that by signing the petition, they’re giving their personal information to union organizers. The email reads:

We have been informed that individuals working with the AFL-CIO may have been provided your personal contact information as a result of signing the coworker.org petition. The AFL-CIO is an umbrella organization for many unions based out of Washington, DC. We understand they are using this information to contact our team members and wanted to let you know that your personal information was not passed along to this group by our company, nor do we have any affiliation with these individuals. As always, we continually strive to protect your personal information and confidentiality at all times. This message only serves to make you aware.

Kutch, Coworker.org’s co-director, counters that “I’m unclear as to where Tupelo Honey Cafe is coming up with these claims, but this is false.”

“The AFL-CIO has no ability to access the contact information of these petition signers,” she continues in an email to the Blade. “The petition was started by Alia Todd and Hayley Ingram with support from the Asheville Sustainable Restaurant Workforce, which is not affiliated with the AFL-CIO.”

Kuch adds that she can only conclude Tupelo corporate staff looked through the social media profiles of one of their freelancers, who used to work for the AFL-CIO but no longer does and hasn’t since working for Coworker.

In his remarks to the Citizen-Times, Frabitore claimed that the company treats its employees well and respects their right to petition but feels that “we’re becoming a target” due to the company’s success.

Meanwhile, Todd and ASRW have also seen an increased profile. Last week, at a summit on worker’s voices hosted by Coworker, President Barack Obama responded to a question she submitted, asking what more could be done, on a federal level, to raise standards for restaurant workers like her.

Obama replied that traditionally, a combination of strong unions and the need for good workers had helped wages rise and keep workers at the table while moving legislation forward.

“But there have always been gaps, and I think the restaurant industry is an example,” he continued. “A lot of federal law did not reach into restaurants the way they should, which is why, for example, waiters and waitresses and how tips were treated was often substandard.”

Given the current makeup of Congress, he added, any changes were unlikely during the remainder of his presidency, but he encouraged ASRW’s efforts nonetheless.

“So, I think the work that Alia is doing — Asheville, by the way, is a great town (with) great restaurants,” Obama said. “But the kind of work that Alia is doing, and some of you describe, of creating new norms and social pressures at the local level with employers and with customers is a really powerful tool.”

Back on the home front, Todd says that while ASRW is “grateful for all of the support we have received since we started this petition some three weeks ago” they’re “disappointed that [Tupelo Honey] had chosen to take a defensive position rather than consider the concerns raised” despite workers at multiple locations signing the petition.

Still, she also tells the Blade that there are some signs that the company is raising wages for support staff at the downtown location, and hopes this will prove “a great first step” to restoring their pay across the company. If that will happen, or if this effort will be regarded by the owner as another meddlesome third party, remains to be seen.

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