Judd Legum Forced Facebook To Remove 1,000 False Ads-- Can He Force Restaurants And Grocery Stores To Give Employees Sick Leave?

Trump-- Not Out Of The Woods Yet

In April, 2009, Blue America endorsed attorney and blogger Judd Legum for the Maryland state Assembly. He didn't win. More recently he's been writing a fantastic, compelling newsletter, Popular Information. A few weeks ago, Judd went after Facebook's policy of allowing deceptive paid ads, a practice television and radio would lose their licenses for doing. His stellar independent journalism forced Facebook to remove over 1,000 of these deceptive ads. Then last week he started taking aim at companies not giving their employees sick leave. He started with Olive Garden. "Before you drown your anxiety about the coronavirus in a bowl of Never Ending Pasta," he wrote, "consider this: in most states, the staff at Olive Garden does not receive paid sick leave. That means if anyone working at the restaurant feels sick, they could be forced to choose between staying home and paying their rent."

The Olive Garden is one of the restaurant brands operated by Darden. The company employs about 170,000 hourly restaurant employees across 1779 restaurants in the United States, making it one of the largest full-service restaurant operators in the country. Except where required by law, Darden does not provide any of its restaurant employees with paid sick leave. Currently, just 11 states and DC-- along with a handful of cities-- require employers to provide paid sick leave.

The Center for Disease Control's coronavirus guidelines recommends employers “actively encourage sick employees to stay home” and "ensure that your sick leave policies are flexible."

A manager at the Olive Garden in Falls Church, Virginia, told Popular Information that, despite the coronavirus outbreak, the company would not pay employees who call out sick for work. The manager instructed a server not to "engage in a conversation" with this reporter about Olive Garden's policy.

None of Darden's media representatives responded to an email from Popular Information. But Darden employees around the country were willing to share their experiences.

A server at the Indianapolis Yard House, another Darden restaurant chain, told Popular Information that restaurant staff "do not get paid sick leave" and get "written up" if they fail to call in sick at least two hours in advance. According to the Indianapolis-based server, since the coronavirus outbreak, the company sent out a message encouraging sick employees to stay home. But it has not offered to pay these employees for missing time. The server has observed many coworkers reporting to work sick because they could not afford to miss a shift.

An Olive Garden server reports that, at a North Dakota location, employees are "not allowed to stay home sick" unless they can find someone to cover their shift or produce a doctor's note. But many of the workers lack insurance to see a doctor. In December, the server says, several members of the staff worked with a persistent cough.

A former Olive Garden server in Arizona, who recently quit, also said there was no pay for missed shifts. Did the server observe people coming into work sick as a result?

All of the time. If you couldn't get your shift covered and called in sick, they would typically try to get you to come in anyways, and if you stayed home, you would lose shifts in the future.

An employee who worked in Kentucky at Cheddar's Scratch Kitchen, another Darden restaurant chain had a similar experience. "I remember times when people came in with flu, strep, common colds. Many times people wouldn’t go to the doctor because most of us didn’t have health insurance," the former employee said.

Lobbying to keep sick workers from getting paid

The lack of mandatory paid sick leave in the United States makes the country particularly vulnerable to disease outbreaks like coronavirus. "Studies show contagion can really be contained with paid sick leave. People cannot stay at home and self-isolate if they are going to risk their jobs by doing so,” Sherry Leiwant, co-president of A Better Balance, said.

A 2012 study found "the lack of workplace policies such as paid sick leave led to 5 [million] extra flu-like illnesses during the H1N1 swine flu outbreak of 2009." A 2018 study found that, in cities that implement mandatory paid sick leave, flu rates plummet by nearly 50%.

According to the latest data from the Bureau of Labor Statistics, 55% of workers in the "accommodation and food services" industry have no paid sick leave.

One reason why so many restaurant workers lack paid sick leave is that companies like Darden are spending millions to prevent the passage of paid sick leave laws. Even as the coronavirus spreads in the United States, Darden, Outback Steakhouse, McDonald's, and other large employers are lobbying for a Florida law that would block cities from implementing their own paid sick leave requirements.

In 2016, Darden, McDonald's and the National Restaurant Association successfully lobbied for a law that prevented cities in North Carolina from passing mandatory sick leave legislation.

The danger of short-term thinking

Darden's refusal to pay its employees for sick leave saves the company a few dollars in the short-term but could backfire. The company's own SEC filings cite "health concerns arising from food-related pandemics, outbreaks of flu viruses or other diseases" as a major risk factor for its business. 

If a virus is transmitted by human contact, our employees or guests could become infected, or could choose, or be advised, to avoid gathering in public places, any of which could adversely affect our restaurant guest traffic and our ability to adequately staff our restaurants, receive deliveries on a timely basis or perform functions at the corporate level…  Additionally, jurisdictions in which we have restaurants may impose mandatory closures, seek voluntary closures or impose restrictions on operations. Even if such measures are not implemented and a virus or other disease does not spread significantly, the perceived risk of infection or significant health risk may adversely affect our Business.

The financial risk is not theoretical. The company was forced to pay out a substantial settlement in 2011 when a worker with Hepatitis A allegedly exposed thousands of customers.

[A] server in a Fayetteville, North Carolina, Olive Garden worked while ill with Hepatitis A, potentially exposing thousands of customers. With Darden’s policy of not providing earned sick leave, and with the minimum wage for servers in North Carolina being $2.13, the server likely could not afford to take a day off despite her illness. The Cumberland County Health Department called in thousands of area diners to be tested for Hepatitis A. After several thousand of these consumers filed a class-action lawsuit, Darden settled the case by creating a $375,000 fund to compensate the consumers.

The company could certainly afford to provide its employees with paid sick leave. It already does so in 11 states and DC. In fiscal year 2019, the company brought in $8.5 billion in revenue. It had a total profit of over $782 million before taxes.

Darden did not have an issue improving the compensation and benefits of its CEO, Gene Lee. In 2018, Lee made $15.7 million, more than twice his 2017 salary. The deal included "a $1 million base salary, $2 million in bonuses and more than $12.3 million in stock option grants." Lee benefits package alone is worth $430,000 and includes "a company car, an executive physical, insurance, and reimbursements for financial counseling."

Lee's compensation was 871 times the median compensation for a Darden employee, which was $18,097.

Taking action

Not all companies are leaving their paid sick leave policies unchanged during the coronavirus outbreak. Trader Joe's, which already offers employees paid leave, says managers will have the ability to authorize additional sick leave for any worker with a respiratory illness. (A union seeking to organize Trader Joe's says the new policy doesn't go far enough.)

Senator Patty Murray (D-WA) has proposed a more comprehensive solution. On Friday, she introduced legislation requiring "all employers" to "let workers earn 7 days of paid sick leave a year, and give them 14 paid sick days immediately in the event of a health emergency."

Yesterday, Legum went further, this time taking on "Kroger-- the country's largest supermarket chain-- continues to maintain sick leave policies that incentivize workers to show up ill. The company operates over 2700 supermarkets under a variety of brands, including Harris Teeter, Dillons, and Ralphs, and employs 453,000 people. Popular Information spoke to numerous Kroger employees around the country. Policies vary by location, but many Kroger employees report receiving no paid sick leave at all. Other employees are offered sick leave, but with significant restrictions that limit its availability. The policies of grocery stores are particularly important because, no matter how severe the coronavirus outbreak becomes in the United States, they cannot close. And people cannot avoid close proximity to grocery store employees."

An assistant front end department leader, who works in Kroger's Delta Division, which includes West Tennessee, parts of Arkansas, and Mississippi, told Popular Information that the job does not include sick leave. The Kroger employee has been working with the company for two decades. The employee does receive vacation days but, per the terms of the union contract, vacation days must be booked in advance and therefore, cannot be used to receive pay for sick time. There have been no adjustments to this policy since the outbreak of the coronavirus.

Another Kroger employee has been working full-time in Tennessee for less than two months. The employee will eventually be eligible for a week of paid sick leave-- but not until working for Kroger for a full year. Until then, there is no pay for time missed due to illness.

A Kroger employee in Colorado, who works for the company's King Soopers brand, said that paid sick leave is available after a year of employment but, even after that, the company does not pay employees until "the second full sick day." This policy is spelled out in the union contract, which the employee shared with Popular Information.

A Kroger employee in Seattle, who has worked for the company for about six weeks, was not feeling well and, as a precaution, stayed home last week. The employee shared his experience with the company.

I work at a Kroger grocery store north of Seattle...[I]t’s been nuts. I came down with a cold last week, self-isolated and asked if they would pay me for the time I was scheduled. Nope. I hadn’t earned enough hours and people come into work sick all the time, per a manager...Saw [doctor] this morning. [I] still have cold (not Covid) and he told me to self-isolate until I was better. But if I don’t work, I don’t get paid. It’s a [minimum] wage cashier job.

This employee, who is living "paycheck to paycheck," will eventually be eligible for sick leave, but not until working for Kroger for 90 days.

Many part-time employees at Kroger told Popular Information they are not offered any paid sick leave. A Kroger employee in Idaho, who has worked part-time at the deli counter since July 2019, does not receive paid sick leave. A Kroger employee in North Carolina, who has been working part-time as a cashier five years, does not receive paid sick leave. (The North Carolina employee reports that the vast majority of employees at the store are part-time.) A Kroger employee in Georgia, who works part-time as a cashier, does not receive paid sick leave.

Media contacts for Kroger and more than a dozen subsidiary brands did not respond to a request for comment.

But on Sunday, three days after Popular Information's first inquiry, Kroger CEO Rodney McMullen revealed that two employees had tested positive for COVID-19. The employees worked at a King Soopers store in Colorado and at a Fred Meyer in Washington. Both stores remained open.

McMullen will still not provide all employees with sick leave. But he did activate Kroger's "Emergency Leave Guidelines," which will provide two weeks of paid time off for employees that test positive for COVID-19 or are placed under "mandatory quarantine" by a health care provider or public health official.

Neither of these measures is sufficient to protect staff and the public. There are few coronavirus tests available-- the most accurate figures available show less than 30,000 have been conducted nationwide. And, as the world faces a pandemic, few people will be able to be evaluated by a doctor and formally placed under quarantine. In other words, it is not a substitute for giving people the ability to stay home if they feel sick.

Emergency sick leave legislation exempts Kroger and other large employers

On Friday, the House of Representatives passed emergency legislation to address the coronavirus pandemic. The legislation immediately grants some workers the right to ten working days of paid sick leave. Workers can also use the leave, reimbursed at two-thirds of their wage rate, to take care of children whose schools have closed. Under the legislation, part-time workers are entitled to the same leave for the number of hours they typically work in a two-week period.

But employers with more than 500 employees are exempt. (Employers with less than 50 employees can also apply for an exemption.)

The original legislation, introduced by Congresswoman Rosa DeLauro (D-CT) and Senator Patty Murray (D-WA), would have required "all employers to provide... 14 days of paid sick leave, available immediately at the beginning of a public health emergency, including the current coronavirus crisis." But those provisions were stripped out at the insistence of the White House, which negotiated a "deal" with Congressional Democrats. Now, around 80% of American workers are not covered by the paid sick leave guarantee.

It's unclear why large employers are exempted. The small to medium-sized businesses that are required to provide paid sick leave will receive tax credits to defray the costs. House Speaker Nancy Pelosi tweeted that she doesn't "support U.S. taxpayer money subsidizing corporations to provide benefits to workers that they should already be providing." But the legislation could have required large employers to provide paid sick leave without a government subsidy. (The bill has not yet passed the Senate because Majority Leader Mitch McConnell (R-KY) inexplicably recessed the body until Monday evening.)

After a report in Popular Information last week, Darden, the parent company of Olive Garden and other large restaurant chains, announced it would provide paid sick leave to all 170,000 of its restaurant employees.

There appears to be the assumption that large employers already provide or will begin to provide substantial paid sick leave. But, as Kroger illustrates, that is not true. And Kroger is not an isolated case.

Luxury retail with a bargain-basement sick leave policy

In an email to customers, luxury retailer Neiman Marcus said that its top priority is safety, and emphasized the company's "love" for staff and shoppers:

Love for our customers and associates is at the heart of everything we do. Your safety, comfort, and well-being are our highest priorities.

In accordance with the guidelines from the CDC, we've asked all associates to remain vigilant in following proper hygiene. We've also asked associates who feel ill, are sick, are experiencing any coronavirus-related symptom, or who need to care for a family member experiencing symptoms to stay home and seek appropriate medical attention. 

What Neiman Marcus doesn't mention is that, while the company does offer paid sick leave, it does not pay its workers for the first day of missed work-- except in states where such a delay is prohibited by law. Popular Information learned of the policy from three Neiman Marcus employees who work in different areas of the country, Virginia, Pennsylvania, and California. (The policy is not in place in California because state law prohibits it.)

Neiman Marcus has over 14,000 employees across 42 locations.