Tag Archives: Minimum wage

Another One Bites The Dust – Bennigan’s Restaurants

We’ve been playing a lot of Queen lately, here at Routing By Rumor world headquarters. Especially this tribute to all of the victims of the U.S. economy. It’s too bad that Washington still can’t bring itself to accepting what most Americans already know.

The latest victims are the restaurants owned by S&A Restaurant Corp., which is part of Texas-based Metromedia Restaurant Group, which is part of the privately held Metromedia Company, owned by the 93-year-old billionaire philanthropist John Werner Kluge.

About John Kluge…

Columbia University in New York City announced last year that Mr. Kluge had pledged $400 million to the University, the largest gift in it’s history. With a little less than $10 billion to his name, poor Mr. Kluge is all the way down at #31 on Forbes magazine’s list of the 400 richest Americans, just below Nike’s Philip Knight, but ahead of eBay’s Pierre Omidyar.

Apparently, all of their company owned locations in the United States have closed, and they have filed for Chapter 7 bankruptcy. This past June, Metromedia disputed the accuracy of this report in the Wall Street Journal, that claimed they had already prepared a bankruptcy filing. There were about 150 company owned Bennigan’s restaurants, and 58 Steak and Ale restaurants. Apparently, a smaller number of franchised Bennigan’s locations in the United States and elsewhere are remaining open for now. Restaurants operating under the Ponderosa Steakhouse and Bonanza Steakhouse brands, also owned by Metromedia Restaurant Group, appear to be staying open for now.

columbia.edu)

John Werner Kluge (photo credit: columbia.edu)

As has been the case at many other companies that have crashed and burned, many Bennigan’s employees were unaware of the closings until they showed up for work last Tuesday, and were greeted by a sign on the locked front door giving them the good news (If you look closely at the photos in this article from the Fort Worth Star-Telegram about the closings, we believe you’ll see a locksmith changing the lock on the front door at a Fort Worth, Texas Bennigan’s …yup, good call, since this article identifies the locksmith!). What ever happened to the good old two weeks notice when your job is about to self-destruct ? OK, maybe two weeks is asking too much… how about 24 hours notice. Maybe it’s just us, but we don’t think that any employer worth working for would treat their employees that way. We think it shows a complete lack of class. We understand that S&A Restaurant Corp. was probably in dire financial straits, but couldn’t they have done better by their employees ?

These days, it is standard procedure for employers to state right there on the job application that it is “employment at will”, and they can terminate you at any time, for any reason, or for no reason at all. For certain, this is driven by the fear of lawsuits, but how the hell can they expect to hire employees who will be committed to the company, if the company won’t make any commitment to their employees ? To us, this is a prime example of the sorry state of American business in the 21st century. And employers wonder why they can’t find loyal, dedicated employees. They wonder why people quit without giving them fair notice. How much notice did Metromedia give their employees about the fact that they would be closing their doors? None. Yet there were published reports a month or two earlier that Metromedia had already prepared a bankruptcy filing.  Shame on you, Mr. Kluge. Those were some of your hardest working and lowest paid employees, who helped you get to #31 on the Forbes list. Welcome to the era of the disposable employee.

In our mind, employees of other Metromedia businesses have every right to simply pick up the phone one day, and tell their boss they won’t be coming to work any more.  If management at any company has a problem with loyalty like that, just remind them that it was their decision to classify you as an “at will” employee, and that you are simply exercising the freedom that being “at will” gives you.

The asymptotically decreasing tenures of the last few CEO’s at Metromedia Restaurant Group (MRG) may shed some light on the troubles at the company. Clay Dover resigned as CEO in late May after holding that position for about six months. Mr. Dover had previously held other positions at MRG, and had replaced Vince Runco, who had been MRG’s CEO for less than a year. Mr. Runco replaced Jeff Moody, who was CEO for about 18 months. Mr. Moody had replaced John Todd, who held the CEO title at MRG for just shy of two years.

Published reports have questioned whether the affected employees will be receiving their paychecks for hours worked up until the restaurant closures, and whether consumers who hold gift cards from the two chains will receive refunds. Our advice… don’t hold your breath. Of course, if Metromedia Restaurant Group wanted to show it’s loyal customers some goodwill, they could announce that gift cards from their Bennigan’s and Steak and Ale restaurants will be honored at their Ponderosa and Bonanza Steakhouse locations. But again, don’t hold your breath.

The minimally carnivorous, quasi-vegetarian staff at Routing by Rumor has never set foot in either a Bennigan’s or a Steak and Ale, so we don’t know if we missed much, but for thousands of their employees now out of work, it’s a disaster. Restaurant workers are among the lowest paid workers, and in the very tough economic times we are experiencing now, they will have a difficult time finding employment.

This brings up another hardship that restaurant workers in the United States are subject to. Many employees allege that they are forced to share their tips with managers and other employees. By law, employers can’t require employees to share their tips with management. To make matters worse, restaurant workers are not subject to the same minimum wage standards that other workers are protected by. As long as their salary plus their tips equal the mandated minimum wage, their employers are within the law. This means that in many cases, they are paid virtually nothing by their employers. Here’s an article from Nation’s Restaurant News, that describes many of the abuses that restaurant employees allege, and some of the litigation that has resulted, involving some of the largest and best known restaurant chains in the country, including names like Applebee’s, which is owned by IHOP.

As of this morning, it appeared that the websites for Bennigan’s (www.bennigans.com), Steak and Ale (www.steakandale.com), and Metromedia Restaurant Group (www.metromediarestaurants.com) had all been taken down. And the vultures are already starting to swoop down and pick through Bennigan’s remains. Check out this article about a locksmith that was hired to change the locks at a Florida Bennigan’s location, and decided to load up his van with liquor and food that remained in the restaurant. He got caught.

– Routing By Rumor

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Dear President Bush…

Dear President Bush,

Thank you for finally waking up and smelling the coffee regarding the dire condition of the American economy. We were beginning to wonder if you’d ever notice.

Your fellow Americans have certainly noticed. We notice it when we find it increasingly difficult to pay our bills. We notice it when we can’t afford health insurance. We notice it when we can’t find a decent paying job, or any job at all. We notice it when we can’t afford to heat our homes or fill our gas tanks. We notice it when we are laid off. We notice it when food keeps getting more and more expensive. We notice it when more and more of the wealth in America is being concentrated at the very top of the economic ladder, while things are getting worse and worse for the poorest Americans. See our recent blog post entitled “Need Proof That The US Economy Is In Trouble?

How on God’s green Earth could you have missed the signs up until now? Here are just a few of the clearest indications of trouble we think you might have missed…

– Record high energy prices

– Americans unable to heat their homes

– Americans unable to afford health care

– Record numbers of Americans losing their homes

– A depressed real estate market

– The highest inflation rate in decades

– A very troubled job market

– Thousands of mass layoff actions by employers

– America’s almost total inability to enforce it’s borders, and the resultant illegal immigrant and undocumented worker problems

– The loss of most American manufacturing jobs

– America becoming almost totally dependent on China for consumer goods

– A minimum wage that guarantees poverty for millions of American families

– Rampant corporate scandals, from Adelphia, to Brocade, to Enron, to Tyco to Worldcom

– Spending more than $1 TRILLION on the Iraq war (see Washington Post article), with no end in sight

– Americans unable to afford retirement, and worried about a bankrupt Social Security system

Need more proof? The U.S. Bureau of Labor Statistics reports that there were 1,800 mass layoff actions of American workers in November, 2007 alone ! They define a layoff action as an event involving 50 or more (thousands, in many cases) employees at a single employer. That’s a minimum 0f 90,000 workers (probably more like several hundred thousand) losing their jobs in mass layoffs, in November alone. And that’s only counting MASS layoffs, which are the tip of the unemployment iceberg. For instance, the BLS says that almost a half-million more Americans joined the ranks of the unemployed in December 2007 alone !  That’s so hard to believe, we’ll repeat it again…  almost a half-million more Americans joined the ranks of the unemployed in December 2007 alone !

So, Mr.President, I was wondering what finally caught your attention. All of a sudden, your administration is talking about an economic emergency. Plans are being floated to provide assistance to Americans, among them, huge tax rebates and increased unemployment benefits. Your administration is using terms like “immediate” and “robust” to describe the economic stimulus plan you are now formulating. Better late then never.

Could it be that you finally noticed because some of America’s largest financial institutions are now feeling the pinch? Within the last few days financial giants including Citibank and JP Morgan have reported huge losses and impending (or continued) layoffs. It sounds like you may have not been taking the economy seriously until the big boys started hurting. Now, finally, your administration has shifted into crisis mode.

Would you like this American’s two cents worth of advice?

It’s really quite simple. The U.S. economy will not recover unless the hemorrhaging of American manufacturing jobs is halted and reversed. The “service economy” is overrated. The American economy will continue to deteriorate if our dependence on imported goods continues to accelerate.

I’ve already mentioned this in this blog… See if you could get out of 1600 Pennsylvania Avenue now and then, and walk the aisles of the stores. Look at the labels and the packaging. Almost everything we’re buying is made somewhere else, usually in China. That’s our biggest problem. Pass legislation (tariffs, tax breaks, whetever) that will encourage manufacturers to produce their products in the USA.

– Sincerely,

RoutingByRumor

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If You Think The Pay Is Low At Wal-mart…


mean-walmart-face-2.jpg
image from grokdotcom.com (click here)

If you needed any proof that RoutingByRumor has it’s finger on the pulse of America, here it is.

Two days ago, I posted a piece on this blog entitled “Made In USA? Yeah, Right”. In it, I discussed the fact that we are becoming dependent on China for everything from clothing to automobile parts. Last week, I posted a piece entitled “The Walmartization of America”, in which I discussed, among other things, cheap merchandise, imports from China, and the hard working Wal-mart employees that don’t earn a decent salary.

Well, today’s local newspaper (12/13/2007) carried a Reuters article with the headline “Senator Says Wal-Mart Sells Products From Sweatshops”. I don’t know about you, but I was shocked and taken aback upon reading that headline. Totally flabergasted. In fact, I’m still in denial. Wal-mart selling sweatshop merchandise? I’m sure that Kathy-Lee is as shocked as I am. The article reported that Senator Byron L. Dorgan, (D) – North Dakota, held a news conference yesterday, at which he released a report by the National Labor Comittee, a human rights organization.

The report highlighted conditions at a company in China that employees 8,000 workers and manufactures Christmas ornaments sold by U.S. retailers, including Wal-mart. It indicated that those workers earn as little as 26 cents an hour, half of the legal minimum wage in China. And you thought our minimum wage was low?

The Reuters article went on to quote a Wal-mart spokesperson as saying that they have a “rigorous ethical standards program”, and were investigating NLC’s claim. If the National Labor Committee’s report is true, I guess Wal-mart might have to add some rigor to their already rigorous ethical standards program. And if the NLC’s report is true, then “Always Low Prices. Always.” (Wal-mart’s former advertising slogan, which has been replaced with “Save Money. Live Better.”) might as well have been “Always Low Pay. Always.”, not only for Wal-mart’s employees, but also for their supplier’s employees.

I had an Uncle who was a CPA, and who was the family’s source of wisdom and advice on all things financial. One day, many years ago (long before I became a cynical blogger), I was bragging to him about some bargain I had gotten on something, the specifics of which I’ve long forgotten. My Uncle sat me down, and said “RoutingByRumor, you get what you pay for“. (OK, I just made up the RoutingByRumor part, but the rest is historically accurate.) Of course, he was right. So, don’t expect to buy anything, at Wal-mart or anywhere else, at an incredibly low price, without there being a catch. Maybe the catch is that the workers that made it earn 26 cents an hour.

I came across this fascinating article from Fast Company about Wal-Mart. Although it’s from four years ago, it is very interesting reading. It puts a lot of the criticism of Wal-mart into perspective.

Here’s some other websites dedicated to Wal-mart issues…

WalmartWatch

WakeUpWalmart

(e-mail me if you would like your Walmart-centric website added to this list)

Never one to underestimate the lowest common denominator among my fellow human beings, or ignore the value of Google, I did a Google search on “walmart sucks”. Google returned the expected stuff, like this, and this. But the real surprise came when I did a whois search at networksolutions.com for the domain name “walmartsucks.com”.

Here’s the domain registration data that Networksolutions returned…

Registrant:
Wal-Mart Stores, Inc.
(DOM-1582466)
702 S.W. 8th Street
Bentonville
AR
72716-0520
US

Domain Name: walmartsucks.com

Registrar Name: Markmonitor.com
Registrar Whois: whois.markmonitor.com
Registrar Homepage: http://www.markmonitor.com

Administrative Contact:
Domain Administrator
(NIC-14300985)
Wal-Mart Stores, Inc.
702 S.W. 8th Street
Bentonville
AR
72716-0520
US
domains@wal-mart.com
+1.4792734000
Fax- +1.4792775991
Technical Contact, Zone Contact:
DNS Management, Wal-Mart
(NIC-14570620)
DNS Management, Wal-Mart
805 Moberly Ln., M31
Bentonville
AR
72716-0560
US
dns@wal-mart.com
+1.4792734000
Fax- +1.4792775991

Created on…………..: 2003-Nov-18.
Expires on…………..: 2011-Nov-18.
Record last updated on..: 2007-Dec-10 16:01:47.

Domain servers in listed order:

L4.NSTLD.COM
A4.NSTLD.COM
F4.NSTLD.COM
G4.NSTLD.COM

I guess that gets filed under “damage control”. I don’t know if Wal-mart did this pre-emptively, or if they bought the domain from someone who registered it first.  Unfortunately, there are so many TLDs (top level domains) like .com, .org, .net, .us, etc., and so many ways to spell “I hate you”, that this really is an exercise in futility. It’s like trying to stop the tide from coming in by using a bucket to empty the ocean. But I commend Wal-mart for trying.

It appears that Walmart would not have been able to sue someone who registered the walmartsucks.com domain name, either to collect damages, or to gain control of the domain name. I found the following passage on a FAQ for bloggers about trademark issues, published by the Electronic FrontierFoundation (EFF)

I want to complain about a company. Can I use their name and logo?

Yes. While trademark law prevents you from using someone else’s trademark to sell your competing products (you can’t make and sell your own “Rolex” watches or name your blog “Newsweek”), it doesn’t stop you from using the trademark to refer to the trademark owner or its products (offering repair services for Rolex watches or criticizing Newsweek’s editorial decisions). That kind of use, known as “nominative fair use,” is permitted if using the trademark is necessary to identify the products, services, or company you’re talking about, and you don’t use the mark to suggest the company endorses you. In general, this means you can use the company name in your review so people know which company or product you’re complaining about. You can even use the trademark in a domain name (like walmartsucks.com), so long as it’s clear that you’re not claiming to be or speak for the company.


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