City Limits WEEKLY, July 30, 2007

City Limits WEEKLY
Week of: July 30, 2007
Number: 598
http://www.citylimits.org/content/articles/viewarticle.cfm?article_id=3379&content_type=1&media_type=3

EATERY GETS BURNED
IN LABOR EXPERIMENT
Sued by former workers, the leader of ROC-NY remains defiant. > By Kate Pastor
The leader of a high-profile restaurant workers' rights organization says there is no merit to the lawsuit brought last week by workers who claim the Restaurant Opportunities Center of New York (ROC-NY) violates some of the very tenets of labor justice it was established to uphold.

Saru Jayaraman, who heads the organization and is a named defendant in the suit, rejected plaintiffs’ claims that they had been expelled from ROC-NY’s restaurant cooperative, Colors, after contributing "sweat equity" – hours of unpaid work in exchange for partial ownership. Jayaraman said that ROC-NY attorneys would move for a dismissal on the basis that the statute of limitations for expelling a member of an organization had expired, and for lack of merit because “work that you do as a member of an organization is not paid work.”

Plaintiffs are asking for back pay based on work they performed between 2002 and 2005, wages they would have earned at Colors had they kept their membership, and for protections against future expulsion for dissent. They are also asking to be hired at Colors, reinstated into both ROC-NY and its Cooperative Committee, and for corporate resolutions adopted during May and June 2005 to be voided. The suit asks for all those who put in the required “sweat equity” – not just the plaintiffs – to be made shareholders in the corporation that owns Colors.

According to Jayaraman, UNITE HERE, the labor union representing restaurant workers, asked her to start ROC-NY in 2002 after many restaurant workers – including those who worked at Windows on the World in the World Trade Center – lost their jobs as a result of the Sept. 11 attacks. As one of its projects, ROC-NY started a restaurant cooperative with the idea of making it a model enterprise and using profits generated from the restaurant to start others. “The money we invested has to be recycled,” Jayaraman said last week.

But according to the lawsuit, filed in state Supreme Court on Tuesday, questions about Colors bubbled up in 2005. Some members of the Workers Cooperative Committee wondered whether the restaurant would in fact be a worker-owned entity when they learned the stock would initially be owned 50/50 by ROC-NY and CIR, an Italian catering and investment company with a collective bent. At an undetermined future date, 20 percent would be transferred to the Cooperative Corporation – the group of workers.

According to the complaint, four of the six cooperative committee board members drew up a list of demands, which was signed by 15 of the 22 active cooperative committee members. The demands, provided by the lawyer for the plaintiffs, Arthur Schwartz, insisted that “members have a true say in how the cooperative is established, structured and run,” that members be allowed to express dissent without “intimidation, alienation or retaliation,” for “language and racial discrimination to end,” and for a review of the operating arrangement as well as access to independent counsel.
~
The lawsuit alleges that members of the Cooperative Committee were punished for questioning the details of the profit-sharing scheme set up by ROC-NY and were not allowed to bring legal counsel into mediation. ROC-NY, it says, started to employ worker intimidation tactics, and when other plaintiffs stopped showing up for mandatory meetings not provided for in the by-laws, they were expelled. Only 10 to 12 of the original 35 who made up the cooperative committee were employed at the restaurant when it opened. “They went after us and a lot of people got scared and withdrew,” said Behzad Pasdar, a plaintiff who was a former Cooperative Committee Board member. “They were doing stuff that union busters do,” Pasdar said.

Jayaraman insists that workers who left the organization – except Pasdar, whom she accuses of lashing out violently – were not kicked out. Some “wanted money and not necessarily to go with the mission of the organization,” and others just didn’t stay involved over the three years it took to open Colors. “Democracy is really tough,” she said, and some people chose not to stick it out.

Jean Pierre, a chef at Colors, backs her up, saying he was never misled about the profit-sharing arrangement and that since co-op members voted on everything, “it sometimes took three weeks to make a decision.”

That’s a very different picture than the one painted by attorney Schwartz, who said ROC-NY is “very top-down in the worst fashion of left dictatorial politics.” He said that Jayaraman, a young lawyer, sees herself as “somebody who needs to lead these unsophisticated workers and help them see what’s best for them.”

He also compared the profit-sharing structure that ROC-NY came up with, to employee stock ownership plans that were popular in the 1980s. “When you describe something as a co-op you mean that the workers own the entity as opposed to employees owning stock,” he said.

To Gene Carroll, the union leadership program director at the New York City office of Cornell University's School of Industrial and Labor Relations, the struggles expressed in the suit seem par for the course.

"Given the new ground that ROC-NY is trying to cover – the creation of a worker cooperative-type restaurant – it's hardly surprising that there's conflict among the members of the co-op as this very difficult model begins to take shape," Carroll said. "It's unfortunate that litigation has to be the consequence of these unresolved conflicts, because of the promise of what it's about ... carving out a new definition of who's an employer – an employer who is an owner but also a worker, and there's a little bit of chaos inherent," he said.

- Kate Pastor