Subject: A Triple-Whammy For The Food Service Industry: A First Test For Cemex, Minimum Rising, And The Joint Liability Threat: LRI INK

October 5, 2023

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A Triple-Whammy For The Food Service Industry: A First Test For Cemex, Minimum Wage, And The Joint Liability Threat

by Kimberly Ricci

Biden’s National Labor Relations Board must relish the chaos they are sowing for employers by pulling every level possible to broaden paths to union organizing. The end effect is a procedural maze, particularly when it comes to the recent Cemex decision that now sees its first test in the food service industry. As we discuss below, this industry is also reeling from twin blows to franchises.


Cemex in action: Workers at an NYC fast-casual cafe chain, Hex & Co., provided managers with notice that they wish to unionize with Workers United, the infamous Starbucks-tackling leg of the SEIU. The new Cemex protocol requires companies to recognize workers’ demands for union recognition or file an RM petition.


Thus, Hex has two weeks to voluntarily recognize the union or petition the NLRB for an election. However, the NLRB now has authority to bypass the results of a vote if the board decides that any unfair labor practice claims against the company hold water. 


At present, Hex workers – from baristas to bartenders and those who run the chain’s board-game events – are asking for a $22.50 minimum wage and increased staffing.


Minimum wage is soaring elsewhere: Yep, those coasts are not clear; Uber, Grubhub, and DoorDash lost their bid to block an $18 minimum wage for workers of app-based food-delivery companies in NYC. That wage kicks into effect immediately, and workers will see a further increase to $20 minimum wage in 2025.


Meanwhile in California, fast food workers will receive substantial boosts in minimum wage after over a year of false starts and pauses. They won’t quite receive the $22 per hour that AB 257 would have dictated when Gov. Newsom signed that bill last September at the behest of SEIU. Yet these workers will, per a compromise and the tweaking of another bill, AB 1228, receive at least $20 per hour beginning in April 2024. 


This month, Newsom signed AB 1228 into law. In doing so, he greenlit a council to make recommendations for working conditions and further wage increases until January 1, 2029. 


AB 1228 applies to restaurant chains with 60+ locations nationally, and franchise owners will bear a disproportionate financial burden. That’s not their only in-process headache.


The lingering joint employer threat: On a nationwide level, McDonald’s is warning that its long-standing franchise model (95% of its locations fall under local ownership and operations) could crumble if the NLRB follows through on broadening the definition of “joint employer.” If this happens, umbrella corporations would face greater liability during labor disputes, allegations of labor law violations, and negotiations with unions. 


The board has been making noises about the proposed revision for over a year while suggesting that a final version would surface this summer. That hasn’t happened yet, and it might take another moment or two to occur.


Why? The NLRB might currently be distracted by its own misconduct allegations that are coming to a boil. To paraphrase a certain catchphrase, we do live in interesting labor times. 


AI And The End Of The WGA Strike: Is The New Contract Really A Victory For Workers?

by Kimberly Ricci

Tensions are high out there for workers who fear being replaced by AI. As we’ve previously discussed, multiple industries are grappling with how to navigate this new technology in a tale that is ultimately as old as time. Our own Michael VanDervort recently wrote about how transparency on the subject can help put workers at ease and ultimately help companies avoid third-party infiltration. After all, unions are keen to pounce upon any worker concern while promising they can vanquish a perceived threat. 


So, it’s no wonder that a primary focus of this summer’s historic double-strike of WGA and SAG-AFTRA revolves around the fear that AI could replace writers and actors. As with all things involving California, this outcome could portend how workers, companies, and unions will continue to navigate the issue elsewhere and in other industries.


SAG-AFTRA remains on strike, but WGA has ended their 148-day walkout against the Alliance of Motion Picture and Television Producers. It’s an outcome that might have gone differently had SAG-AFTRA not joined the “party” in mid-July. The combined pressure of a near-total work stoppage led studios and streaming networks to send their CEOs into several days of intense final negotiations with the WGA bargaining committee.


In the end, a tentative contract surfaced, and writers are now back to work. Will all be well for the workers? As Nancy Jowsky recently detailed, the UPS/Teamsters agreement wasn't as much of a union win as it was sold to be. Is the same true for the WGA/AMPTP agreement on the subject of AI?


The answer is a complicated one. The full 94-page Memorandum Of Agreement covers minimum staffing, pay rates, residuals, and several other issues, but again, we are zeroing in on the AI portion. Let’s pop into a key part of the Summary of the MOA, which ostensibly is what’s being used to persuade WGA members to vote for this agreement: 


“AI can’t write or rewrite literary material, and AI-generated material will not be considered source material under the MBA, meaning that AI-generated material can’t be used to undermine a writer’s credit or separated rights. 


“A writer can choose to use AI when performing writing services if the company consents and provided that the writer follows applicable company policies, but the company can’t require the writer to use AI software (e.g., ChatGPT) when performing writing services. 


“The Company must disclose to the writer if any materials given to the writer have been generated by AI or incorporate AI-generated material.


“The WGA reserves the right to assert that exploitation of writers’ material to train AI is prohibited by MBA or other law.”


On the surface, this reads like a significant union victory, and yes, this is more of an immediate win (emphasis on the “immediate”) than a loss for writers, but it’s nowhere near a long-term slam dunk. 


In the WGA’s full MOA, Article 72 (on Generative Artificial Intelligence) is a windier version of what we quoted in Part I. The full version solidifies how AI can be used by studios and writers with limitations upon scope. What’s interesting, however, is that even though the results do benefit writers, this outcome isn’t necessarily a union win or a result of anything that the union achieved in negotiations. 


Also, the language of this section goes as far to protect studios as it does writers, although neither side attempted an “outright ban” on AI. And to be fair, that does not seem like an achievable goal.


Let’s start with two realities: (1) It is in studios’ best interests to retain as much ownership of IP as possible; (2) It is in writers’ best interests to be paid fairly and not be replaced by AI. Both sides have gotten what they want out of Article 72, the AI section, which is essentially one giant compromise, because humans must be involved in creating “literary material” to the point where it cannot be considered GAI.


Why? Because the U.S. Copyright Office does not consider GAI content to be copyrightable. Yet, who’s to say that the USCO won’t change its mind before this contract expires in May 2026? For now, studios want to ensure that humans are tied to scripts in a substantial enough way that they remain copyrightable.


We aren’t quoting the full section here to save some space, but here’s 

what Article 72 actually does for both sides:

  • AI can be used to crank out first drafts of scripts as long as a human rewrites the material into a second draft. A human writer must be credited as first writer, which is also currently necessary for studios to copyright the material;

  • This agreement also guarantees that screenwriters will not lose their compensation on a project due to the initial use of AI. So, the writer must be fully informed of the situation, receive their usual pay rate, and retain said first credit. Those aspects are a win for writers who feared that the opposite would happen – that their own work would be retooled by AI and that these writers would be paid a lesser rate and lose their credit, or that human writers would not be needed at all.


Both sides are likely satisfied with the current outcome, but this is not an all-clear for either side. Specific language in Section F states, “The parties acknowledge that the legal landscape around the use of GAI is uncertain and rapidly developing….” In Section G, “Each Company agrees to meet with the Guild during the term of this Agreement at least semi-annually at the request of the Guild… to discuss and review information related to the Company’s use and intended use of GAI...”


In other words, the subject of AI will be an ongoing discussion in this industry and countless others, and not everything has been settled here. 


Stay tuned.

Striking Out for the Working Class

by Nancy Jowske

Toledo, Ohio — United Auto Workers President Shawn Fain on Saturday warned autoworkers on strike not to let messaging from the Detroit Three automakers give up their fight for “justice.”


“They’re trying to cause doubt between the membership and the leadership; They’re trying to cause division. This is how they operate. This is how people in power operate. We try to divide everybody so they can get done what they want to get done. They say complete b——-, and it won’t work. We’re smarter than that.” The Detroit News, September 30, 2023


One thing is sure – when any labor leader warns, “They are trying to divide us!” he knows he’s already lost the trust of a troubling share of his membership. Recent comments on posts to the UAW’s Facebook page seem to bear this out, with auto workers looking less than united as Fain’s “stand-up strike” stumbles on. The turnout for UAW events, including picket lines, has been relatively anemic, and most picketers have been reluctant to speak to the press. Remember, too, that UAW officials, stewards, and staff are required to walk those picket lines, and only designated union boosters are allowed to speak to reporters. It’s also difficult to recall a UAW strike that needed “advocates” like these to apply pressure for the union.

At least a few autoworkers must be wondering – along with the rest of us – why Fain is treating truly historic offers from all three companies like trash. They have offered to eliminate tiers and, according to Ford, its proposed pay boosts would take a worker now earning $60,000 a year to over $100,000 in 2027 without any cuts to benefits. (Making this public is presumably how the evil corporations are sowing division.) GM CEO Mary Barra has accused Fain of trying to “make history for himself” in lieu of reaching a settlement, and that sounds about right. It also bears mention that Fain has not polled bargaining unit members on these offers; its more unifying if he just decides for them.


There are also nagging doubts about the “stand-up strike” strategy. Many autoworkers would prefer to strike everywhere all at once, but they may be divided as to why. Socialist dilettantes are grousing about being forced to continue to make product and profit for the corporate overlords while their comrades have the privilege of making history. In contrast, the silent minority of old timers may be missing the good old days, when being on strike meant walleye fishing for a month, with a weekly trip in from the cabin to picket. For them, this whole “this week you’re working, but maybe next week you’re not” strategy does take all the real joy out of strike season.


Certainly, more than a few autoworkers out there – those that don’t read Politico – thought they were voting to strike over their core pocketbook issues, as they had so successfully in years past. They were not asked to approve a strike  “for the good of the entire working class,” nor did they authorize months of  “recurring reputations damage and operation chaos” for their employers in order to finally restructure society, competitiveness be damned. This revolutionary zeal gets a little tricky when many members of the working class with no say in any of this, many of them friends or family of autoworkers, are now suffering the most and will benefit the least. And one must wonder if these strike theatrics and the concessionary suffering of unit members over the last 15 years were worth it if the plan is now to choke the golden geese to death anyway.

Breaking: OIG Report Bolsters Foxx’s Claims of Misconduct By NLRB Officials

by Michael VanDervort

Breaking news out of Washington D.C. over allegations of improper conduct at the NLRB.


Today, the House Education and the Workforce Committee released National Labor Relations Board (NLRB) Inspector General (IG) David Berry’s report detailing findings of gross mismanagement in the NLRB’s administration of a mail ballot election. The report was given to the Committee after Chairwoman Virginia Foxx (R-NC) called on Berry to provide a report that could be released to the public.

Chairwoman Foxx made the following statement: “Having this report front and center for the American people is part of the Committee’s duty of accountability. There are serious mismanagement issues at the NLRB and it’s hurting the agency’s ability to perform its mission faithfully. Berry’s findings make two things certain: First, the Committee’s ongoing investigation into the NLRB is justified. Second, the Committee and IG Berry are rowing in the same direction to root out misconduct at the NLRB.”


Background:


  • March 22, 2023: Chairwoman Foxx issued a subpoena to an NLRB whistleblower, the Assistant to the Regional Director for Region 15 of the National Labor Relations Board after she sounded the alarm about NLRB officials engaging in misconduct and failing to conduct fair and impartial elections.

  • July 31, 2023: IG Berry presented the findings of the OIG report to congressional staff during a closed-door meeting.

  • August 14, 2023: Chairwoman Foxx sent a letter to NLRB Chairman Lauren McFerran and General Counsel Jennifer Abruzzo outlining dozens of instances of misconduct found in documents provided by the NLRB whistleblower.

  • September 7, 2023: Chairwoman Foxx sent a letter to IG Berry requesting that his office provide the Committee with a publicly releasable version of the OIG report.


You can read the OIG’s report here and the Committee’s topline summary here.


Stay tuned for more developments

Links For This Week


The Legality Of The NLRB Challenged In Federal Court By A Starbucks Employee

Link


Force Behind California's $15 Wage Is Named The State's New U.S. Senator

Link


Nonunion Autoworkers Are Watching The UAW — And Deciding Whether They Want In 

Link


Workers Demonstrate At Durham Waffle House, Call For Fair Wages And Workplace Safety

Link


UAW, Automakers Signal Progress After Days Of Stalemate - Sources 

Link


Here Are All The Colorado Kaiser Permanente Locations Affected By The Healthcare Worker Strike

Link

About Labor Relations INK

Labor Relations INK is published weekly and is edited by Labor Relations Institute, Inc. Feel free to pass this newsletter on to anyone you think might enjoy it. New subscribers can sign up by visiting here.


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Contributing editors for this issue: Phillip Wilson, Greg Kittinger, Michael VanDervort, Nancy Jowske and Kimberly Ricci 


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