Union Square Hospitality Modifies Controversial New Staff Contract After Protest Rumors

In what appears to be the latest sign of internal strife, Danny Meyer’s Union Square Hospitality Group — the restaurant group behind hits like Gramercy Tavern, Manhatta, and Union Square Cafe, and a company known for its “employee first” policies — introduced a new arbitration agreement to prevent employees from filing class action lawsuits against the company, only to later rescind the agreement as whispers of a public protest began to circulate.

“Many of our people have shared questions and concerns about a new arbitration agreement,” a spokesperson for USHG tells Eater in a written statement. “USHG is built on listening to our team members, and because of that we have decided to rescind the agreement. Over the next several months, we will invite all interested team members to join in a collaborative process to create a best in class, inclusive program for conflict resolution.”

The arbitration agreement was part of a new employee manual handed to USHG workers toward the end of January, according to the document obtained by Eater.

A section titled “mandatory arbitration” stated that the company and employees have to submit to “binding arbitration to be held in the city where the employee works or Manhattan, New York County, New York, whichever is closer, before a single arbitrator and administered by JAMS,” which is an international, for-profit dispute resolution firm. Sexual harassment complaints were excluded. Arbitrations are generally thought to benefit companies over employees because companies inherently hold more power.

Employees were required to sign the agreement or lose their jobs, according to the manual. But grumblings about the new agreement spread, and staffers at Gramercy Tavern were planning to hold a protest in front of the restaurant on Tuesday morning, multiple sources tell Eater. Following word of the demonstration, USHG president Chip Wade announced in an email on Monday that the company would nix the arbitration section, and the protest was subsequently called off.

For employees who have already signed the agreement, the arbitration section will now be rescinded, and the company set a new deadline of January 1, 2021 for both sides to come an agreement on a conflict resolution process, according to the USHG statement to Eater.

Despite its reputation as being a safe haven for restaurant employees in a notoriously difficult industry, USHG is no stranger to complaints from staffers — especially following Meyer’s decision to turn the company no-tipping in 2015. The effort was introduced to raise wages, but in practice, things have been rocky. Several servers claimed they were paid less after the policy change, between 30 to 40 percent front-of-house staff quit in subsequent years, and a diner lobbed a suit against Meyer alleging he was part of a conspiracy along with other top NYC restaurateurs to deprive staffers of wages and customers of cash. The suit was ultimately dismissed.

The company has also previously been criticized for allegedly mishandling years of complaints about sexual misconduct at some USHG restaurants. And last year, Gramercy Tavern was also under fire when an employee sued the the restaurant and USHG for allegedly forcing them to wear male-specific garments when the employee identified as gender nonspecific.

USHG has been undergoing lots of changes as of late. Last year, it had a major staff shake up that included the hire of Wade as president.