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Darden's Decision: Which Future for Olive Garden, Red Lobster, and Capital Grille?

Darden's Decision: Which Future for Olive Garden, Red Lobster, and Capital Grille?

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Published by ROCUnited
Darden Restaurants, Inc., (Darden) is the world’s largest full service restaurant company, and home to some of the nation’s most beloved restaurant brands including Olive Garden, Red Lobster and Capital Grille, with over 2000 locations across the globe. ROC’s latest report outlines the ways in which Darden’s current employment practices have created liabilities for the company with regard to workers, consumers, and investors, and offers an alternative path to profitability. These practices not only threaten the public health, but also threaten to damage the reputation of their strongest brands, impacting shareholders both large and small.

The report is being released on the heels of both Darden’s own recently-released Sustainability Report, and a report released last month on Darden by Governance Metrics Analysis (GMI), the largest and most respected independent evaluator of corporate governance practices. GMI gave Darden a letter grade of “D” for overall governance, and particularly highlighted the fact that Darden CEO’s exorbitant pay and severance package create both tax liability and conflict of interest for the corporation.

Most shockingly, during the last several years of national economic crisis, Darden dramatically expanded its lobbying expenditures, spending almost $1 million annually to advocate against laws that would mandate disclosure of management compensation and prevent any improvements in employment standards.

“Darden’s sustainability report indicates laudable goals with regard to its practices,” says Saru Jayaraman, Co-Director of the Restaurant Opportunities Centers United. “If it lived up to these goals, the company could improve standards industry-wide. Unfortunately, the company not only does not live up to these goals but also actively lobbies to keep industry standards low.”

Darden employees and consumers have charged the company with wage theft, discrimination, paying unsustainable wages as little as $2.13, and denying employees the ability to earn paid sick days. The lack of paid sick days resulted in a Fayetteville, NC Olive Garden worker coming in to work while suffering from Hepatitis A in 2011. This forced the Cumberland County Health Department to immunize thousands of diners to prevent a dangerous Hepatitis A outbreak, and ultimately led to a class action lawsuit by over 3000 residents.

Darden regularly pays the lowest wages possible to its employees. The federal subminimum wage has been stuck at $2.13 since 1991. Darden has lobbied to keep minimum wages stagnant, while Darden’s executive compensation of the CEO has risen 23% per year on average since 2005 to its current level of 8.5 million in 2011.

The report outlines Darden’s recent wage theft lawsuits, including several Texas-based federal lawsuits for nonpayment of wages, and a California class action lawsuit in which the company was charged with forcing its workers to pay for the cost of purchasing and maintaining uniforms, in which the company was forced to pay employees $9.5 million.

The report also outlines recent lawsuits against Darden for employment discrimination based on race, including a 2008 lawsuit that charged that Beachwood, Ohio Bahama Breeze employees of color were repeatedly pelted with racial slurs such as “Aunt Jemima” and “stupid n**ger” by managers. This resulted in a EEOC announcement of a $1.26 million settlement from Darden in 2009. In describing the settlement, EEOC’s acting chairman Stuart J. Ishimaru said “No worker should have to endure a racially hostile work environment in order to earn a paycheck.”

In January of this year, ROC assisted approximately 50 workers in filing federal litigation against the company for wage theft and discrimination.

‘Darden’s Decision’ offers the company an alternative path to profitability, highlighting how other responsible restaurateurs have offered employees livable wages and benefits, resulting in reduced turnover and liability.
Darden Restaurants, Inc., (Darden) is the world’s largest full service restaurant company, and home to some of the nation’s most beloved restaurant brands including Olive Garden, Red Lobster and Capital Grille, with over 2000 locations across the globe. ROC’s latest report outlines the ways in which Darden’s current employment practices have created liabilities for the company with regard to workers, consumers, and investors, and offers an alternative path to profitability. These practices not only threaten the public health, but also threaten to damage the reputation of their strongest brands, impacting shareholders both large and small.

The report is being released on the heels of both Darden’s own recently-released Sustainability Report, and a report released last month on Darden by Governance Metrics Analysis (GMI), the largest and most respected independent evaluator of corporate governance practices. GMI gave Darden a letter grade of “D” for overall governance, and particularly highlighted the fact that Darden CEO’s exorbitant pay and severance package create both tax liability and conflict of interest for the corporation.

Most shockingly, during the last several years of national economic crisis, Darden dramatically expanded its lobbying expenditures, spending almost $1 million annually to advocate against laws that would mandate disclosure of management compensation and prevent any improvements in employment standards.

“Darden’s sustainability report indicates laudable goals with regard to its practices,” says Saru Jayaraman, Co-Director of the Restaurant Opportunities Centers United. “If it lived up to these goals, the company could improve standards industry-wide. Unfortunately, the company not only does not live up to these goals but also actively lobbies to keep industry standards low.”

Darden employees and consumers have charged the company with wage theft, discrimination, paying unsustainable wages as little as $2.13, and denying employees the ability to earn paid sick days. The lack of paid sick days resulted in a Fayetteville, NC Olive Garden worker coming in to work while suffering from Hepatitis A in 2011. This forced the Cumberland County Health Department to immunize thousands of diners to prevent a dangerous Hepatitis A outbreak, and ultimately led to a class action lawsuit by over 3000 residents.

Darden regularly pays the lowest wages possible to its employees. The federal subminimum wage has been stuck at $2.13 since 1991. Darden has lobbied to keep minimum wages stagnant, while Darden’s executive compensation of the CEO has risen 23% per year on average since 2005 to its current level of 8.5 million in 2011.

The report outlines Darden’s recent wage theft lawsuits, including several Texas-based federal lawsuits for nonpayment of wages, and a California class action lawsuit in which the company was charged with forcing its workers to pay for the cost of purchasing and maintaining uniforms, in which the company was forced to pay employees $9.5 million.

The report also outlines recent lawsuits against Darden for employment discrimination based on race, including a 2008 lawsuit that charged that Beachwood, Ohio Bahama Breeze employees of color were repeatedly pelted with racial slurs such as “Aunt Jemima” and “stupid n**ger” by managers. This resulted in a EEOC announcement of a $1.26 million settlement from Darden in 2009. In describing the settlement, EEOC’s acting chairman Stuart J. Ishimaru said “No worker should have to endure a racially hostile work environment in order to earn a paycheck.”

In January of this year, ROC assisted approximately 50 workers in filing federal litigation against the company for wage theft and discrimination.

‘Darden’s Decision’ offers the company an alternative path to profitability, highlighting how other responsible restaurateurs have offered employees livable wages and benefits, resulting in reduced turnover and liability.

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Published by: ROCUnited on Sep 15, 2012
Copyright:Attribution Non-commercial

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