Craft beer isn’t facing an apocalypse … but the industry is changing

In addition to running the employment & labor practice at Wickens Herzer Panza, I also run our burgeoning craft beer practice. Which is why a recent article in Paste Magazine — "For Many Craft Breweries, the Apocalypse is Now" — caught my attention.

Here's the author's thesis:

The tragic breaking point for major brewery closures is no longer "coming soon." It's a macabre event that has been framed as something perpetually on the horizon for years, but there's no use in denying it anymore–the great die-off is here. It's now. The culling of the herd is underway in 2023, and simply making great beer is no guarantee of survival.

I wholeheartedly disagree. I do not believe that craft beer is facing an "apocalypse." 

I do believe, however, that a combination of the lingering impact of Covid (staffing shortages, rising inflation, and higher interest rates) plus changing consumer tastes means that craft beer's salad days are over.

So, what does this mean for our industry?

Your business is not a charity

Your customers are not your bank. It’s not their job to bail you out from poor business decisions.

I’ve been thinking a lot about this idea as I’ve been following the recent news from R. Shea Brewing.

Here’s the Cliffs Notes version of what’s happened.

From 2015 - 2019, R. Shea was a small local brewery. In 2019, it opened a much larger, 60,000 square-foot second location, which enabled it to significantly expand its production and operations. That expansion, however, also included a vast expansion of its debt, to the tune of a $2 million SBA loan. A combination of the lingering impacts of Covid, rising wages and production costs, and skyrocketing interest rates have created a situation in which R. Shea in now unable to service that debt.

As a result, it just launched a GoFundMe campaign to raise … wait for it … $2.3 million. Thus far, it’s raised approximately $17,000.

Is this what the future of union organizing looks like?

Last week, the employees of Creature Comforts Brewing Co. voted by a margin of 32-21 to reject the Brewing Union of Georgia as their bargaining representative and for their workplace to remain union-free. The National Labor Relations Board conducted and supervised the secret-ballot election, and the result presumes to reflect the choice of Creature Comforts' employees.

Except maybe that secret-ballot election is not the choice of Creature Comforts' employees?

I fully expect BUG to file a petition with the NLRB seeking a Cemex bargaining order. What is a Cemex bargaining order, you ask? 

Join me tomorrow: Tips on Tips webinar (free)

I spent my Saturday night at 8th Day Brewing Company watching my 17-year-old daughter, Norah, play a killer 3-hour set of music. When we sat down at our table, I was giddy to find the latest issue of The New Brewer, the bi-monthly trade magazine of the Brewers Assocation. That issue features my article on how to legally pay tipped employees.

Since access to the magazine and my article are for BA members only, you won't be able to read it if you're not a BA member (unless you happen to wander into a brewery that has it on display).

I can, however, offer you a great alternative. Tomorrow at 4 pm ET, I'm presenting Tips on Tips: How to Legally Pay Your Tipped Workers, a free webinar for the Craft Beer Professionals Fall Virtual Conference. You can watch live on the Craft Beer Professionals Facebook page or on its YouTube channel. 

NLRB opens the tap for a union election at Creature Comforts Brewing Company … but will it matter?

It took more than seven months, but the NLRB has finally directed a union representation election at Creature Comforts Brewing Company. The NLRB will soon hold a secret ballot election over whether employees wish to be represented for purposes of collective bargaining by the Brewing Union of Georgia. 

The bigger issue for Creature Comforts, however, is that even if it wins the election, the union will almost certainly use its four pending unfair labor practice charges against the employer to seek a bargaining order under the Board's recent Cemex decision (which the Board will apply retroactively).

EEOC busts a quartet of hospitality employers for pervasive sexual harassment

In a press release, the EEOC announced the filing of a series of sexual harassment lawsuits against Las Vegas hospitality employers. 

[The l]awsuits … allege sexual harassment towards employees by owners, supervisors and management, co-workers, and/or customers. The four lawsuits included allegations raised by workers throughout the hospitality industry, from housekeepers in hotels to waitstaff in both high-end and casual restaurants and bars. Allegations included the attempted rape of a young housekeeper, sexual assault, sexual solicitations, sexual comments, inappropriate touching, stalking, and other inappropriate behaviors. 

These lawsuits are consistent with agency's enforcement priorities as outlined in its just-released Strategic Plan, which includes targeting education and enforcement effots to protect vulnerable communities.

Not all reasonable accommodation standards are created equally

Consider this example, and then let's talk.

Lydia works as a cellar person in a brewery. The essential functions of her job include the ability to lift up to 40 lbs. and to move kegs that weigh as much as 160 lbs. She delivers a note from her doctor that says, "No lifting or moving more than 10 pounds."

What are this employer's obligations to offer her a reasonable accommodation for her lifting and moving restrictions? It depends on the medical reason.

A few wage and hour thoughts for beer festival season

As the weather warms up around the country and spring quickly transitions to summer, festival season will begin … including my personal favorite, the beer festival.

Beer festivals, however, raise a few specific wage and hour traps for participating breweries. Here's the 411.

Tip credits, tip pools, and slutty vegans

Bar Vegan in an affiliate of Slutty Vegan, a plant-based restaurant chain that finds itself in the crosshairs of a wage-and-hour collective action lawsuit challenging how it pays its tipped employees. The issue focuses on the bar claiming a tip credit and paying its tipped bartenders less than the statutory minimum wage. That practice, in and of itself, is legal. What makes it allegedly illegal in this case, however, is how Bar Vegan distributes tips among its staff, and more specifically that it permits non-tipped employees to participate in a tip pool with its tipped bartenders.

That's an FLSA no-no.

The craft beer industry has a sexual harassment problem

According to the EEOC, the industry that generates the most sexual harassment reports (at more than 14% of all such claims filed with the agency) is hospitality and food service, which includes craft breweries.

Indeed, according to a recent survey conducted by Women On Tap, 73% of women report experiencing sexual harassment while working in a pub/bar. 

Simply stated, the craft beer industry has a sexual harassment problem.

A tip on tipped workers: pay them correctly or else

The Department of Labor has sued the owner of two restaurants claiming that servers were not properly paid overtime. 

El Toro Loco Legends LLC in Kansas City and El Toro Loco Lenexa LLC in Lenexa, Kansas, paid their tipped wait staff a minimum wage of $2.30 per hour, but did not properly calculate the overtime premium owed to those employees.

They calculated the overtime premium based off of the $2.30 tipped minimum wage instead of the greater of the full minimum wage of $7.25 per hour or the employee's effective weekly hourly rate including all tips received by the employee, less the employer's statutory tip credit against wages paid directly to the employee.

Do your business’s philosophy, values, and vision match your mission statement

On this week's episode of The Start A Brewery Podcast, I join hosts Laura Lodge and Candace Moon, along with guests Ren Navarro (the owner/operator of Beer. Diversity., and my co-presenter at the upcoming Craft Brewers Conference) and Jason Gladfelter (of Vombuds, LLC) to discuss how a business's mission statement should align with and reflect its philosophy, values, and vision. 

We discuss the important questions of "Who are you?" and "What do you collectively as a team and a business represent?" While we answer these questions in the context of starting a brewery, the issues we discuss and the lessons we teach are applicable to any business of any size, startup or established, small or big.

Union avoidance vs. union busting

"A company that opposes a union organizing and presents both sides of this complex issue is 'union busting.'" This is what one commenter wrote in response to my recent post about union organizing at Creature Comforts Brewing Co.

I could not disagree more. 

There is vast, substantive, and significant difference between union avoidance and union busting.

Update on Creature Comfort Brewing’s union organizing

Last week I reported that the employees of Creature Comforts Brewing Co. formed their own independent labor union, the Brewing Union of Georgia (aka BUG) and announced their intent to unionize their workplace.

A lot can happen in a week.

What does Creature Comfort’s union announcement mean for your craft brewery?

The employees of Creature Comforts Brewing Co. recently held a rally to announce their intent to form a labor union. They also announced the formation of the Brewing Union of Georgia, an independent union created by the brewery's employees with the stated goal of spreading their movement across their state. Despite the union's "independence," it has received assistance and guidance from assistance from the United Campus Workers of Georgia and the Workers Center at the Economic Justice Coalition.

This is HUGE news for the craft beer industry.

Employers, for the love of God, please stop banning employees from discussing their wages

I came across the following recent post on the legaladvice subreddit.

Work for a brewery. GM and owner … informed everyone that we needed to sign a contract essentially stating that if ANY employee was found to be discussing wages, they would be terminated immediately.… As of last week, GM let everyone know that any employee who hasn't signed the paper will be looked at as a voluntary resignation. I should probably add that, of course, we have no union.

This is what we labor and employment lawyers call … what's the term … ILLEGAL. 

Employers, repeat after me: “Tips belong to employees, not employers.”

$1,351,253.34. That's the amount a federal judge has ordered the Empire Diner, its owner, Ihsan Gunaydin, and its manager Engin Gunaydin to pay a group of 107 servers and kitchen workers based on an illegal tip scheme.

What rendered the restaurant's tip scheme illegal? It required servers to turn over 10 to 15 percent of their total tips received on any given shift to pay the bussers' wages. That's a clear violation of the Fair Labor Standards Act.

Does craft beer have a labor problem?

Does craft beer have a labor problem? Julie Rhodes, writing at PorchDrinking, sure thinks so. 

She cites low wages and labor conditions as the two main drivers of her conclusion. 

Having a disability is NOT an excuse for mistreating others

I've written before about BrewDog (here and here), the multinational Scottish craft brewery accused by hundreds of former employees of systemic mistreatment through its sexist and misogynist work environment. The brewery's founder and CEO, James Watt, stands at the center of much of controversy and most point to him as the root cause of most of the allegation.

Earlier this week, Watt appeared as a guest on The Diary of CEO podcast. During the interview, Watt blamed his pattern of mistreatment of employees him possibly being autistic.

Explaining the “Golden Age of Union Organizing”

Unions aren't just having a moment, they are having their best moment in at least 50 years.

• What has caused the "perfect storm" of union organizing that employers are currently experiencing?
• How have the White House's policies impacted unionization and collective bargaining?
• What explains the trend of smaller, "in-house" unions, such as those seen at Starbucks and Amazon?
• How should employers assess their labor strategies in response to these changes?

This week, I joined the ProjectHR Podcast to discuss The Golden Age of Union Organizing, the forces that are helping to cause it, and how employers should be responding and reacting.

Here's a preview of what you'll hear in the episode.

You can listen to the entire episode here, or wherever you get your podcasts.