SR 10-24-2017 4A
City Council Report
City Council Meeting: October 24, 2017
Agenda Item: 4.A
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To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development, Economic
Development Division
Subject: Study Session regarding Labor Peace Agreements
Recommended Action
Staff recommends that Council review, consider, and provide direction regarding
requiring labor-peace agreements in the City’s leasing guidelines and policies for City-
owned properties with food-service operations.
Executive Summary
For nearly 15 years, the City has required new leases on City-owned properties on
the Pier and in the Downtown to include provisions that minimize the likelihood of
labor conflicts that could disrupt the payment of revenues to the City. Council
recently directed staff to evaluate requiring new food-service tenants on City-
owned properties to enter into labor-peace agreements with an appropriate labor
organization. This staff report provides information on the subject of labor-peace
agreements (LPAs) including the legal and economic considerations associated
with requiring LPAs for food-service operators as a condition of executing a lease
with the City. The potential impacts to small businesses are also examined and
policy options are provided to advance the City’s goal of preventing disruptive
labor conflicts, and protecting the City’s leasing revenues and its vibrant economy,
while preserving opportunities to support and encourage small, independent, non-
formula businesses in the community. In protecting the City’s leasing activity
revenue stream from disruption, staff seeks direction that incorporates Council’s
long-standing commitments to safeguard the rights and wellbeing of local workers
with support and promotion of local business.
Background
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The City owns various types of real estate including buildings, kiosks, parking
structures, and parking lots. City-owned properties not currently in use for
municipal purposes are leased or licensed for commercial uses that generate
rental revenues and provide community and visitor-serving amenities. The City
also leases or licenses its properties to various nonprofit organizations such as the
People Concern (OPCC), the Growing Place, and WISE & Healthy Aging to
provide social and educational services for the community. This report focuses on
the food-service tenants that lease or license property from the City and does not
address the non-profit tenants or other types of commercial tenants.
The majority of leased or licensed City-owned properties (City Properties) used for
commercial purposes are located primarily in four areas of the City:
Downtown, in mobile-vending carts and pavilions on the Promenade,
and on the ground floor of Parking Structures 5 and 6;
Santa Monica Pier, in a variety of buildings, kiosks, and mobile-vending carts;
Santa Monica Airport, which has a variety of buildings and airport hangars;
and,
Santa Monica State Beach, in which the City owns various concession stands.
Additionally, there are three food-service operators in City-owned properties that are
not included in the four areas identified above: The Victorian on Main Street, Chez Jay
on Ocean Avenue, and the Bookmark Café at the Main Library. The Victorian is a long-
term lease that predates any of the existing leasing guidelines. The process of leasing
Chez Jay and the Bookmark Café has generally mirrored the City’s policies outlined in
the Downtown and Pier Guidelines, with the exception that Council is the approving
entity of the leases rather than the Pier Corporation board or the Downtown Santa
Monica Inc. board.
In total, the City manages 101 properties including the concession buildings on the
beach. Of the 101 properties, 27 properties are leased or licensed to businesses that
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are food-service operators or have a component of food service as part of their
operation. A listing of the food-service operators (City Tenants) who lease or license
City Properties is provided in Attachment A.
The City first adopted labor-peace guidelines nearly 15 years ago when the Santa
Monica Pier Leasing and Licensing Guidelines were adopted on March 11, 2003
(Attachment B) and soon afterwards the Downtown Leasing and Licensing Guidelines
on July 8, 2003 (Attachment C). The labor-peace provisions incorporated in the Pier
and Downtown guidelines clarify the City’s proprietary interest and prohibit all City
tenants from engaging in practices that impede the tenants’ employees’ ability to
organize and contract with a labor organization for the purpose of collective bargaining.
The specific labor-peace provision that applies to all leases and licenses states:
“Because the City has a financial or proprietary interest in the
businesses operating from its leaseholds, some of which are in
industries that have a history of labor/management conflict, the risk of
interruption of rental revenue received by the City would be minimized if
such businesses were assured of labor peace. An appropriate labor
peace provision for businesses engaged in visitor- serving commercial
activities would minimize the City’s exposure to revenue interruption
and disruption of public enjoyment of the Promenade [and the Pier].
New or substantially amended agreements for leasehold operation shall
provide that the tenant will not engage in practices that impede
employees’ ability to organize and contract with a labor organization for
the purpose of collective bargaining. Such prohibited practices include
harassment, intimidation, “captive audience” anti-union meetings or
illegal terminations of workers in retaliation for organizing. A substantial
amendment is defined as a change of use of the property, an increase
in seating or square footage of more than 25%, or an extension of lease
duration. Tenant engagement in prohibited practices shall constitute an
event of default under the terms of lease. Affected leases would be
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those businesses having five or more full or part-time employees and
engage in restaurant or visitor-serving activities.”
On March 24, 2015 (Attachment D), Airport staff presented several recommendations
regarding operations at the Santa Monica Airport and the City’s future use of Airport
land. At the meeting, Council directed staff to incorporate a labor-peace agreement
requirement in all airport leases. On October 25, 2016 (Attachment E), Council
authorized the City Manager to negotiate and execute a lease agreement with Spitfire
Grill, a long-standing restaurant at the Airport, under the terms and conditions
presented in the staff report. In accordance with Council’s direction from the March
24, 2015 meeting, staff incorporated the labor-peace provisions within all of the
commercial leases at the airport, with the exception of Spitfire Grill, where
negotiations between the City and Spitfire Grill have reached an impasse.
At its meeting on August 23, 2016 (Attachment F), Council directed staff to amend the
existing labor-peace provisions in the licensing and leasing guidelines for the
Downtown and Santa Monica Pier to mirror the labor-peace agreement requirement
for food- service operators at Los Angeles World Airports (LAX). Mirroring the LAX
model would result in the following requirement:
“In order to protect the City of Santa Monica’s interest in ensuring
that food- service operations produce the expected revenues to the
City, Lessee shall supply to the appropriate City administrator a
fully executed labor-peace agreement between Lessee (or the
entity which will operate the food-service establishment) and any
labor organization that is actively engaged in representing and
attempting to represent food-service workers. The labor-peace
agreement must be a valid and enforceable agreement which
prohibits the labor organization and its members from engaging in
any picketing, work stoppages, boycotts, or any other economic
interference with the food-service operation for the duration of the
lease and must cover all operations at the food-service
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establishment (other than construction, alteration, or repair of the
premises) including those conducted by sublessees or under
management agreements, other than non-food retail sales.”
The provision above is referred to herein as the “proposed labor-peace agreement
requirement” or “proposed LPA provision.” At this time, all commercial airport leases
at the Santa Monica Airport have an LPA requirement similar to the LAX language.
However, some non-commercial hangar leases (those only for storage of aircraft) and
the Spitfire Grill lease, which is still under negotiation, do not have LPA language.
Additionally, Council directed staff to evaluate potential impacts of the proposed LPA
provision on small, food-service businesses prior to amending the guidelines.
Discussion
To help provide additional context, the number of employees working for the City’s
food- service operators (City Tenants) and the revenues generated by the businesses
were evaluated to determine how many of the tenants are considered small
businesses.
The Small Business Administration (SBA) establishes small-business-size standards
on an industry-by-industry basis, but generally specifies a small business as having
fewer than five hundred employees for manufacturing businesses and less than $7.5
million in annual receipts for most non-manufacturing businesses. The definition also
varies by circumstance. For example, a business with fewer than twenty-five, full-time-
equivalent employees with average annual wages below $50,000 is classified as a
small business. In line with the measure, the minimum wage laws of the State of
California and the City classify small businesses as having 25 or fewer employees.
As a group, the City Tenants employ a range of full- and part-time positions totaling
approximately 600 employees annually, which includes additional part-time, seasonal
staff hired by businesses on the Pier and Beach during peak season. Based on the
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State and City’s classification of small business (25 or fewer employees), the majority
of the City Tenants would qualify as small businesses. Specifically, of the 27 food-
service tenants, approximately eight tenants employ more than 25 full- and part-time
employees.
In terms of revenues, the City collected approximately $7.6 million in rental revenues in
FY 16-17. Of the $7.6 million, approximately $4.5 million (59 percent) was generated
by the City Tenants with food-service operations.
Figure 1: Total Rent Revenues in FY 16-17
Under the SBA definition for non-manufacturing businesses, any business with less
than $7.5 million in annual receipts would be considered a small business. Based on
the SBA standard, the majority of City Tenants qualify as small businesses and tend to
be local, independent, non-formula operators, consistent with the preferences within
the City’s leasing and licensing guidelines.
Labor Peace Agreements (LPAs)
Congress enacted the National Labor Relations Act (NLRA) in 1935 to protect the
rights of employees and employers, to encourage collective bargaining, and to curtail
certain private-sector labor and management practices, which can harm the general
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welfare of workers, businesses, and the U.S. economy. Under a labor-peace
agreement, a labor organization, an employer, or both, agree to waive certain federally
protected rights in order to avoid labor disruptions.
LPAs come in many forms. Certain LPAs have been described as legally binding card-
check-neutrality agreements between an employer and a labor organization in which
the employer agrees to remain neutral in the event their employees wish to vote to
unionize. It is important to note that negotiating and executing a LPA does not
necessarily mean employees will unionize. In general, LPAs provide workers with
rights to organize in the workplace, while the subject labor organization commits to
forgo engaging in picketing, boycotting, or striking. LPAs vary depending on what terms
are agreed upon between a particular business and labor organization. Terms may
include elements such asii:
Labor Organization Access. The employer agrees to provide the labor
organization with reasonable, limited access to its premises and
employees.
Employee Roster. The employer agrees to provide the labor organization with
a complete list of contact information for its employees.
Card Check. Both parties agree to a card-check process accompanied by a
waiver of the National Labor Relations Act (NRLA) secret-ballot election
process. Employees can sign a card authorizing a labor organization to
represent them and a neutral third party (i.e. an arbitrator, a priest) counts the
cards to determine if a majority of workers want to unionize. If a majority signs
cards for the labor organization, the employer agrees to recognize the labor
organization for purposes of collective bargaining.
Neutrality. The employer agrees to remain neutral during the organizing
campaign. The employer agrees to not take any action or make any
statement showing preference for or opposition to unionization. The labor
organization agrees not to coerce or intimidate employees in their decision.
No Economic Action. Both the labor organization and the employer agree
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to refrain from economic action, including strikes, picketing, or lockouts.
First Consideration. Employer agrees to give first consideration in filling
job vacancies to applicants referred by the labor organization.
Dispute Resolution. The parties agree to submit any disputes concerning the
interpretation or applications of the labor-peace agreement to binding
arbitration.
Additional Facilities. The employer agrees to recognize the labor organization
as representative of employees at facilities acquired after the agreement is
signed, upon a proper showing of a card-check majority by the labor
organization.
The employer may agree to extend an existing collective bargaining
agreement to those facilities.
Binding Interest Arbitration. The parties agree to submit to arbitration if
no agreement is reached following a specified period of negotiations.
LPA Provisions and the National Labor Relations Act (NLRA)
There have been numerous lawsuits in recent years challenging the legality of locally
imposed labor-peace agreements. Many of these lawsuits contend that labor-peace
agreements trigger federal preemption under the NLRA. The NLRA grants employees
two basic rights: (a) the right to form, join, or assist a union and (b) the right to engage
in concerted activities for mutual aid or protection, which is any effort by two or more
employees to improve pay, benefits, or working conditions. Under the NLRA, an
employer cannot legally take any adverse employment action against employees who
engage in union activities. Specifically, the NLRA stipulates: "Employees shall have
the right to self-organization, to form, join, or assist labor organizations, to bargain
collectively through representatives of their own choosing, and to engage in other
concerted activities for the purpose of collective bargaining or other mutual aid or
protection, and shall also have the right to refrain from any or all of such activities
except to the extent that such right may be affected by an agreement requiring
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membership in a labor organization as a condition of employment as authorized in
section 158 (a)(3) of this title." iii
A state or municipality may not regulate employers in a manner that encroaches upon
the jurisdiction of the NLRA, as such, regulation is preempted by the federal NLRA.
However, as the Ninth Circuit recently articulated in Airline Services Providers v. Los
Angeles World Airports, when a state or local government buys services or manages
property as a private party would, it acts as a market participant and courts presume
that its actions are not subject to preemption. Thus, the Ninth Circuit upheld LPA
provisions included by the City of Los Angeles in its license agreements with service
providers at LAX that refuel and load planes, take baggage tickets, help disabled
passengers and provide similar services, because the Court found that the City of Los
Angeles was acting as a market participant and not as a regulator. The Court further
concluded that the scope of Los Angeles' use of the LPA provision at LAX was
sufficiently narrow as to only address a specific proprietary problem (minimizing work
stoppages at LAX) without imposing a City-wide policy that would affect the service
providers' operations outside of LAX.
Courts have also upheld the inclusion of LPA provisions in state and local government
contracts where such provisions are included as a narrowly tailored means of avoiding
disruption of government projects. On such grounds, the Supreme Court has affirmed
the authority of local officials to include LPA provisions commonly known as “project
agreements” that require all firms performing construction on a single government
project of limited duration to enter a particular kind of collective-bargaining agreement.
Project agreements are typically used in connection with large-scale infrastructure
projects in which the final product is “owned” by the local government. Project
agreements reduce the total cost of individual government projects by ensuring a
skilled workforce and creating a high probability that work will proceed continuously,
without strikes, picketing, or other disturbances arising from disputes with unions.
LPA Requirements in Other Jurisdictions
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California, Connecticut, Florida, Maryland, Minnesota, New York, Nevada, Oregon,
Pennsylvania and Washington have labor-peace requirements that vary based on the
projects and local laws. Additional examples include the City of New York, through
Executive Order No. 19, titled “Labor Peace for Retail Establishments at City
Development Projects,” in which labor-peace agreements became a requirement at
retail and food-service establishments within development projects that receive
financial assistance from the City of New York. In 1980, the San Francisco
Redevelopment Agency required the Marriott Corporation to sign a labor-peace
agreement in conjunction with its proposal to build a hotel on a City-owned parcel. The
agreement included neutrality and card-check provisions. Approximately two decades
later, in 1998, the City of San Francisco passed a “labor peace” ordinance applicable
to contractors and subcontractors of hotel and restaurant projects where the City had a
proprietary interest. Under the ordinance, any covered hotel or restaurant must sign a
card-check agreement with any union requesting one. The San Francisco Airport
Commission created a similar set of requirements for employers doing business at
San Francisco International Airport.
In addition to New York and San Francisco, cities that have since enacted labor-peace
ordinances include Baltimore, Pittsburgh, and Washington, D.C. While not necessarily
as explicit as those in San Francisco, the City of Baltimore ordinance spells out five
circumstances in which the City has a proprietary interest: 1) the City derives revenue
from property leasing; 2) the City derives revenue from a project through borrowing
from the City; 3) at least part of a project’s operating revenues are used to service debt
on City bonds; 4) project loans are underwritten or guaranteed by the City; and 5) the
City has an ongoing economic or non-regulatory interest dependent on the financial
success of the project. The City of Pittsburgh’s ordinance states that employers,
including subcontractors, “shall be or become signatory to valid collective bargaining
agreements” with any labor organization seeking to represent its employees “as a
condition precedent to its contract with the City of Pittsburgh.” This actually goes
beyond the San Francisco ordinances, which at least require worker support. The
Washington, D.C. law stipulates that any contract related to a hotel project must
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include a labor peace agreement signed by an employer and any union that
represents, or reasonably might represent, workers there.
In Maryland, an applicant for a license to operate a video lottery terminal must have
“entered into a labor peace agreement with each labor union that is actively engaged
in representing or attempting to represent video lottery and hospitality industry
workers in the state.” In return, the union will refrain from “picketing, work stoppages,
boycotts and any other economic interference” within the first five years after the
license is granted. The New York State law applies to any hotel or convention center
employing more than
15 people in which a state agency asserts a proprietary interest. As with Maryland, a
union agrees for five years not to disrupt employer operations.
LPA Provisions Currently in City Leases
Council first authorized a labor-peace-agreement requirement on September 19, 2000
when a previous owner of the current Viceroy Hotel sought approvals to sell its
leasehold interest. In the transaction, the transfer of the tenant's leasehold interest in
the Viceroy property triggered the preexisting leasehold requirement of providing a fully
executed labor-peace agreement to the City. The transfer was approved in 2000, and
the City was provided with a fully executed collective-bargaining agreement entered
into by and between the operators of the Viceroy and a labor organization. A collective-
bargaining agreement is a special type of commercial agreement, usually negotiated
between management (on behalf of the company) and a labor organization (on behalf
of employees) to regulate the terms and conditions of employees in the workplace,
including the duties of employees and employer. The example of the Viceroy is unique
in that the City’s real estate portfolio does not currently include other hotel properties
with food-service operations.
Prop o se d Cha n ge to th e City’s L PA P rovisio n s
As described earlier, the proposed change to the City’s LPA provisions would mirror
the LAX labor-peace requirements. Specifically, all future City Tenants with food-
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service operations would be required to submit an executed LPA as a condition of
entering into a lease with the City. Currently, the labor-peace provisions in the
Downtown and Pier leasing guidelines do not require tenants to demonstrate an
executed LPA; rather, the labor-peace provisions stipulate that all City Tenants
operating under the leasing guidelines in Downtown and the Pier cannot impede
employee efforts to organize.
LAX Labor Peace Requirements
In the LAX labor-peace model, service providers are required to enter a labor-peace
agreement with any employee organization that requests one. LAX’s labor-peace
policies were authorized pursuant to resolutions adopted by the Airport Board of
Commissioners (BOAC) in Resolution 23437 from October 15, 2007 and Resolution
24860 from August 6, 2012. The requirements are:
(i) Concessionaire shall have a signed Labor Peace Agreement (LPA) with
the labor organizations representing or seeking to represent concession
workers at the premises covered by the Agreement;
(ii) Concessionaire shall have submitted to LAWA a copy of such LPA,
executed by all of the parties; and
(iii) Such LPA shall prohibit such labor organizations and their members from
engaging in picketing, work stoppages, boycotts or other economic
interference with the business of Concessionaire at any of the airports
operated by LAWA for the duration of the Agreement.
In addition to concessionaires, any entity providing a commercial service at LAX,
including all airline-service companies (i.e. baggage handlers, aircraft loading and
unloading, counter and gate functions, etc.), whether unionized or not, are required to
execute a service-provider license agreement with any organization, agency, or
employee committee that can address worker grievances and disputes involving
wages, hours of employment, and working conditions. Certain license agreements
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between LAX and commercial service providers also include labor-peace agreements
with the organization representing the workers. In the event an employer and a labor
organization are unable to agree to a labor-peace agreement within 60 days of the
labor organization’s written request, the dispute must be submitted to a mutually
agreed-upon mediator to assist the parties in reaching a reasonable labor-peace
agreement through mediation. If mediation fails, the parties must submit the dispute to
the American Arbitration Association (AAA) for arbitration conducted in accordance
with the AAA rules.
City’s Pref e ren ce f o r Sm a ll, No n –Formula, Independent Businesses
Santa Monica has a vibrant and diverse economy. The Downtown leasing guidelines
emphasize the importance of and City’s preference for small, independent businesses
within the tenant-selection criteria. The hospitality sector, which includes hotels,
restaurants, and bars, directly supports Santa Monica’s tourism industry and provides
a strong stimulus to the local economy by creating jobs and producing revenues for
the City. The City-owned properties at the Beach, in the Downtown, and on the Pier
provide neighborhood-serving uses and amenities for the community and visitors, help
activate the City Properties, and often fill gaps that would not otherwise be addressed
by the market. The majority of City Tenants are small, independent businesses. Given
the importance of small businesses to the community, Council asked that
consideration be given to the potential impacts of labor-peace requirements on small,
food-service businesses. As part of this research, staff conducted a series of outreach
efforts to gather feedback and information.
Community Outreach and Input
Staff presented the proposed labor-peace agreement requirement to the Santa
Monica Pier Board on February 22, 2017, Downtown Santa Monica, Inc. Board on
February 23, 2017 and the Chamber of Commerce Governmental Affairs Committee
on
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March 6, 2017. In addition to businesses and residents, representatives of a labor
organization attended several of the discussions. The feedback received included
these key concerns and suggestions:
Uncertainty. As the terms and conditions of LPAs vary based on what is
negotiated between an employer and a labor organization, small businesses
expressed concerns regarding the high level of uncertainty. In particular, the
uncertainty represents additional risks for a small business as the inability to
identify the legal, administrative and operational costs prior to negotiating an
LPA and pursuing a lease with the City makes understanding and planning
for on-going operating expenses more challenging. Additionally, food-service
businesses expressed concern that a labor organization would have
unilateral leverage in negotiating a LPA if it is a condition of entering into a
lease with the City. Without any contingencies or alternative approaches to
resolve disagreements in negotiating
terms of an LPA, concerns were raised that the requirement could dissuade
many smaller businesses from pursuing leasing opportunities with the City.
Legal Expenses. Given the complexities associated with LPAs, concerns were
raised that understanding and negotiating LPAs may be more daunting for
small businesses and may require specialized legal assistance. Depending on
the extent and difficulty of the negotiations between a tenant and a labor
organization, including the possibility that such negotiations might require the
use of an arbitrator or mediator, the legal costs to a small business could pose
financial hurdles that dissuade small businesses from pursuing leasing
opportunities in City Properties. As a result, concerns were raised that only
larger, more established chains or franchises, with in-house legal counsel or
deep financial resources, would have the means to fund the additional legal
expenses.
Increased Operating Costs: Concerns were expressed that LPAs would likely
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lead to unionization, with an associated increase in operating costs. Concerns
are particularly acute for small, food-service operators who run modestly priced
restaurants in which profit margins are low.
Thresholds: Participants considered whether thresholds could be developed,
below which small businesses would not be subject to the LPA provision.
Small businesses are a critical component of and a major contributor to the
strength of local economies. Small businesses help stimulate economic
growth by providing local jobs and employment opportunities to people who
may not be employable by larger businesses, franchises, or national chains.
One option is the 25-employee threshold contained in the minimum-wage
ordinance. Another option is to impose the requirement based on the square
footage to be leased. A third option is to exempt food-service carts on the
Santa Monica Pier given the short terms (36 months) of cart licenses and
micro-entrepreneurial nature of cart businesses.
LPA Template: To help address the uncertainty associated with LPAs, some
participants suggested the City develop a standard form or template for LPAs
in order to give prospective tenants a clear idea of what would be expected.
This approach, however, may be challenging as each LPA is unique based
on what is negotiated between a labor organization and a business.
Additionally, because the City is not a party or signatory to an LPA, the City’s
promulgation of a template may not be prudent.
Business Protections: Some participants commented that the LPA provision
would help businesses prevent disruptive labor conflicts, which could
negatively affect revenues and customer loyalty. Others argued that Santa
Monica food-service businesses have generally not been subject to labor
conflicts and questioned the likelihood of future conflict.
Alternatives
There are seven primary alternative approaches that Council could pursue:
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1. Amend Existing Leasing Guidelines with LPA Requirement: One option for
consideration is to update the leasing guidelines to require labor-peace
agreements for food-service operators in all City-owned properties and
adopt a policy to include the LPA requirement for properties not covered
under the Airport, Downtown, or Pier leasing guidelines to ensure consistent
policies and practices with respect to food-service operators. Under this
option, the leasing guidelines would be amended to include the following
language:
“In order to protect the City of Santa Monica’s interest in ensuring that
food- service operations produce the expected revenues to the City,
Lessee shall supply to the appropriate City administrator a fully executed
labor-peace agreement between Lessee (or the entity which will operate
the food service establishment) and any labor organization that is actively
engaged in representing and attempting to represent food-service workers.
The labor-
peace agreement must be a valid and enforceable agreement which
prohibits the labor organization and its members from engaging in any
picketing, work stoppages, boycotts, or any other economic interference
with the food-service operation for the duration of the lease and must cover
all operations at the food-service establishment (other than construction,
alteration, or repair of the premises) including those conducted by
sublessees or under management agreements, other than non-food retail
sales.”
Additionally, the dispute-resolution process used at LAX could be included in
which, in the event an employer and a labor organization are unable to agree to
a labor-peace agreement within 60 days of the labor organization’s written
request, the dispute must be submitted to a mutually agreed-upon mediator to
assist the parties in reaching a reasonable labor-peace agreement through
mediation. If mediation fails, the parties must submit the dispute to the American
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Arbitration Association (AAA) for arbitration conducted in accordance with the
AAA rules.
2. Adopt A Template or Guidelines for LPAs: While the LAX LPA provision
affirmed by the Ninth Circuit does not specify what concessions a business
would have to make to satisfy the City’s LPA requirement, existing City Tenants
interested in pursuing and extending leasing opportunities with the City
expressed deep concerns about the ambiguity and uncertainty associated with
negotiating LPAs. City Tenants and other business stakeholders have asked
that the City provide as much clarity and details as possible with respect to LPA
requirements and process, such as a template. However, as noted, given that
the City is not a party or signatory to any LPA, insertion of the City’s specific
desires may be problematic.
3. Amend Labor Peace Provisions with Threshold Exemptions: In accordance
with the City’s minimum wage classification, a small business is defined as a
business (corporation, limited liability company or proprietorship) with 25 or
fewer employees. Currently, the existing labor-peace provisions in the City’s
leasing guidelines for Downtown and the Pier apply to those businesses
engaged in restaurant or visitor-serving activities and having five or more full
or part-time employees. Under this alternative, the LPA requirement could, for
example, apply to businesses with 26 or more employees with exemptions
granted for small businesses with 25 or fewer employees. A threshold
exemption based on square footage is not recommended, as all but five City
tenants are located in City-owned properties of less than 5,000 square feet.
4. Adopt LPA with a No-Strike Pledge: The Santa Monica-Malibu Unified School
District (District) adopted an LPA policy in 2005 for District-owned properties
leased to hospitality operations. The District’s LPA requirements are similar to
LAX requirements in that the District does not execute any lease, in this case,
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with a hospitality operations lessee, unless and until the hospitality operations
lessee has signed a labor-peace agreement with any labor organization
seeking to represent hospitality workers at the premises covered by the lease.
In the District’s LPA requirement, however, each labor-peace agreement must
contain a No-Strike Pledge. The exact language reads:
“Each labor peace agreement must contain a No-Strike Pledge. A
Hospitality Operations Lessee shall be relieved of the obligations of this
section with respect to a Labor Organization if the Labor Organization
places conditions upon its No Strike Pledge that the Board of Education
finds, after notice and hearing, to be arbitrary or capricious”.
Under this alternative, the City adopts the LPA requirement with a No-Strike Pledge
that allows the City to waive LPA requirements in certain circumstances similar to the
District’s policy.
Under any of the first four alternatives, staff recommends that food-service carts and
outdoor-dining licenses be exempted from the labor-peace requirements, given the
nature of the licenses.
5. Keep Labor Peace Provisions As-Is: Council may wish to consider keeping the
current labor-peace provisions given that: (a) the existing labor-peace
provisions in the Downtown and Pier Leasing Guidelines currently prohibit City
Tenants from engaging in practices that impede employees’ ability to organize
and contract with a labor organization for the purpose of collective bargaining;
(b) the City has not yet experienced work stoppages at any of the City
Properties; and (c) the impacts of LPAs on rental income and small
businesses is unknown and unpredictable at this time.
6. Require Good-Faith Negotiations. Council could adopt the State of California's
approach of requiring a statement by the applicant that it intends to execute a
LPA or is in the process of doing so. The approach does not make an
executed LPA an express requirement of obtaining a lease with the City before
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a lease can be executed. Instead, if the tenant does not follow through with
executing a LPA with a labor organization, the City has the flexibility of
deciding whether to declare a breach of the lease agreement. The approach
strengthens the City against challenges and claims of "injury in fact." This
approach might also be combined with adopting non-binding guidelines as
suggested in the second alternative.
7. Remove All Requirements: Council could eliminate the existing labor-peace
provisions in the leasing guidelines in recognition that the NLRA provides
employees with basic rights to form, join, or assist a labor organization and
the right to engage in concerted activities for mutual aid or protection, which is
any effort by two or more employees to improve pay, benefits, or working
conditions. Additionally, under the NLRA, an employer cannot legally take any
adverse employment action against employees who engage in union
activities.
Based on the Council direction staff would return to Council for formal approvals
to amend the Airport, Downtown, and Santa Monica Pier Leasing Guidelines and
implement the any requirement or conditions prospectively in forthcoming
requests for proposals, leases and licenses.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action associating with conducting
the study session. Depending on the direction chosen, leasing revenue from City-
owned properties may be affected.
i https://www.sba.gov/contracting/getting-started-contractor/make-sure-you-meet-sba-
size- standards/summary-size-standards-industry-sector
ii Neutrality Agreements and Proprietary Interest Protection Agreements. Miller-O’Brien.
iii National Labor Relations Act of 1935 §7
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Prepared By: Nia Tang, Senior Development Analyst
Approved
Forwarded to Council
Attachments:
A. Summary of Food Service Tenants
B. Council Item #8-A, March 11, 2003
C. Council Item #1-F, July 8, 2003
D. Council Item #8-A, March 24, 2015
E. Council Item #3-F, October 25, 2016
F. Council Item #13, August 23, 2016
G. Written Comments
H. Powerpoint Presentation
ATTACHMENT A
City-owned Properties with Food Service Tenants
City-Owned Property Location Tenant
Square Footage
(approx.)
Indoor + Outdoor
Dining
3300 Airport Avenue Airport Spitfire Grill
5,844
445 Palisades Beach Road Beach Back on the Beach
3,500
930 Ocean Front Walk Beach Perry's Beach Café &
Rentals
1,035
1200 Ocean Front Walk Beach Perry’s Beach Café &
Rentals
1,242
2400 Ocean Front Walk Beach Perry's Beach Café &
Rentals
850
2460 Ocean Front Walk Beach Perry's Beach Café &
Rentals
1,025
1633 The Promenade Beach Hot Dog on A Stick
440
1431 2nd St. Unit B
Downtown - Parking
Structure 6
KC Chocolatier
1,133
1431 2nd St. Unit C
Downtown - Parking
Structure 6
Caffe Espresso Cielo 1,600
1260 Third Street Promenade
Downtown – North
Pavilion
Monsieur Marcel 1,494
1400-B Third Street Promenade Downtown – South
Pavilion
Caffe Bellagio
500
601 Santa Monica Blvd. Santa Monica Bookmark Café
750
1657 Ocean Ave. Santa Monica Chez Jay Restaurant
2,905
2640 Main St. Santa Monica The Victorian
12,961
200 Santa Monica Pier Pier Soda Jerks
300
250 Santa Monica Pier Pier Piazza al Mare
6,079
256 Santa Monica Pier Pier Rusty's Surf Ranch
4,309
258 Santa Monica Pier Pier Albright Seafood
3,300
301 Santa Monica Pier Pier Bubba Gump
4,534
330 Santa Monica Pier Pier Pier Burger
1,900
380 Santa Monica Pier Pier Pacific Park
34,548*
401 Santa Monica Pier
Pier Mariasol Restaurant 6,788
Cart Vendor Pier Candy Carousel n/a
Cart Vendor Pier Churroman n/a
Cart Vendor Pier Fruit Cart n/a
Cart Vendor Pier Japadog n/a
Cart Vendor Pier Pier Tamales n/a
*floor area consists of amusement rides, game booths, ticket booths, food service and beverage facilities, queuing
structures and related facilities.
October 16, 2017
Mayor Winterer and Councilmembers,
I am writing to express my concern about the Labor Peace Agreement proposal that you will discuss in
the October 24 Study Session.
As most of you know, my restaurants, Back on Broadway and Back on the Beach Café, have served
hundreds of thousands of meals since we opened them in 1982 and 2000, respectively. We are favorites
of local residents, businesspeople and visitors. We have catered wedding receptions, fundraisers for
local non-profits, holiday parties, and memorial gatherings, both in-house and other locations. Every
year, we open our doors on Thanksgiving Day to provide dinners with all the trimmings free of charge to
local seniors on fixed incomes. It is the highlight of the year for us, keeping us connected with the
people who helped create the community we have today.
We consider ourselves part of the fabric of our community because we want to be. It’s not just about
turning a buck. It’s about creating a meaningful institution in a city that values its history.
Back on the Beach, located adjacent to the Annenberg Beach House complex, is our jewel. Because it is
located on City-controlled property, it is vulnerable to the consequences of a Labor Peace Agreement.
I think it is useful to review the restaurant’s history in our community to best communicate our
philosophy and the threat we face.
In 1979, we sublet the present Back on the Beach property from the Sand and Sea Club under the name
Oceanhouse Café. Oceanhouse was a success. However, the club canceled our sublease, and we moved
to our flagship location on Broadway in 1982. At that location, we have built up a clientele including
people from Saint John’s, local galleries and, now tech companies.
In 1989, the Sand and Sea Club lost its lease arrangement, and a proposed luxury hotel and beach club,
which had been provisionally approved by City Council, was voted down when Proposition S was
passed. The Parks and Recreation supervisor at the time knew we had previously operated a successful
restaurant on the site, and asked if we would open the café again under a different name on a month-
to-month arrangement. This would generate income for the City and offer a much-needed public beach
full service restaurant. After we opened, we continued a month-to-month arrangement until 2008,
when we were made a leased concessionaire. Back on the Beach has been successful through the ups
and downs of the economy.
Contributing to our ongoing success are our fantastic employees. Our relationship to staff is
tremendously important to us, and our ability to assemble a team that knows our business is critical. As
business has grown, we have added more service personnel, with our year-round off season wait and
kitchen staff numbering 22, with 7 of those 22 employed at Back on the Beach 20-plus years. In the
summer season we add additional employees, bringing our employee roster to more than 80 staff. Of
the summer hires, a majority are people who started in high school and work the summers while in
college. Our employee pool is made up of community members who attend or attended Samohi, Pali
High, Crossroads and New Roads. We are very happy to see them return each summer.
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Our local and return customers know the employees on a personal level. If we were, down the line,
forced to hire only union-selected servers, the strong bonds between ownership and employees would
be weakened, and the familial character of Back on the Beach would change forever. Under a union
contract, I would have no authority to initiate a hire with a specific potential employee. A barrier would
be raised between me and the staff I value, closing that “open door” relationship that makes Back on
the Beach special. Our shared workplace, where I spend at least 350 days a year, would take on a
corporate chain restaurant atmosphere. In short, we would lose what we have been for all these
years. This would signal the end of small “mom and pop” – or in our case “pop and pop” – businesses
that have contributed so much to the culture of our city.
As many of you know, I have been a SAG/AFTRA, EQUITY union member for over 40 years. I am not anti-
union and feel there is a place for union involvement in our local hospitality industry – but not in the
scores of “mom and pop” – or in our case, “pop and pop” – operations like Back on the Beach.
I hope you will consider my thoughts on this issue as you weigh the LPA proposal.
Many thanks,
Fred Deni
Back on the Beach Café
445 Pacific Coast Highway
Santa Monica, CA 90402
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To: The Santa Monica City Council
From: MSBIA Board
Re: Item 4A – Proposed Labor Peace Agreement Requirement
Date: 10/20/17
Dear City Councilmembers,
I write to you today, on behalf of the Main Street Business Improvement Association, as the new
Executive Director of the MSBIA, and an active participant in the community.
Our board encourages you to reject the proposed labor peace agreements, as we believe they would
significantly harm our local independent restaurants, and would damage the unique character of our
community.
We would understand this requirement, if there were a history of protests or bad relationships
between employees and local food service establishments, but this is not the case. Santa Monica’s
local restaurants, and especially those we know operating on Main Street or elsewhere in Santa
Monica on city property, have a history of being great employers.
As somebody who has personally interacted with many small businesses and every restaurant in
Santa Monica regularly over the past two years, I can tell you that every F&B operator I know is
still scrambling to try and figure out how best to adjust to the unprecedented and rapid increase in
labor cost.
There have already been several closures, and there will be many more. On top of that, Santa
Monica is still grappling with its reputation as a difficult city to do business in.
Why would we want to make that worse? Especially when business are already struggling to make
ends meet.
The biggest issues with the LPA requirement, as with most things, are its unintended consequences.
One example, is that every restaurant we’ve spoken with that currently has a patio dining permit
would begrudgingly opt to not renew it when the time came to do so, and eventually Santa Monica
would be a city without any sidewalk patio dining.
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Expanding on that, what will become of the Pier? Do we want it to become prohibitively expensive
to low and middle-income families? Slowly but surely, families with limited means would decide to
go elsewhere. It is already very difficult to afford to live here, and a prohibitively expensive Pier
would just be one more thing that sends our customers elsewhere.
Further, Main Street businesses are dependent on customers who are attracted to the unique
character of Santa Monica’s independent businesses. If the Pier and our downtown see more
vacancies or begin to only attract corporate tenants, that is serious threat to Main Street.
Think about that for minute. Is that who we are? Is that the kind of city we want to be? I don’t
think so. I don’t think the residents of Santa Monica want that either, and neither do our visitors.
You’ve probably heard from businesses in the other BIDs on Montana, Pico, and Downtown,
many of whom, I know share this sentiment.
LPAs may make sense at LAX, where guaranteed uninterrupted operation is necessary, but not on
Main Street, the Pier, beach, downtown, or our own small airport, and they are certainly not
necessary on the sidewalks of our City.
In summation, please reject the proposed requirement. The existing leasing guidelines have served
our community well.
Thank you, and please don’t hesitate to contact me at anytime if you have any questions or need
further clarification on our position.
Sincerely,
Hunter G. Hall
Executive Director
Main Street Business Improvement District
314-323-4663
Hunter@MainStreetSM.com
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Mayor Winterer and Councilmembers,
This letter is on behalf of the Santa Monica Pier Lessees Association regarding the Labor Peace
Agreement proposal before you on Tuesday night.
The Pier Lessees fervently oppose the proposal because we believe it is unwarranted, unfair, and will
potentially create long-term, negative effects on the way visitors experience the Pier. We ask you to
consider the wide-ranging impacts on our businesses, employees and visitors as you discuss the
proposal.
We question the necessity of imposing Labor Peace Agreements on smaller, locally-owner restaurants
simply because they are located on City-owned property. As you are undoubtedly aware, the city’s
existing leasing guidelines already provide clear protections for workers seeking to organize. Those
protections are also enshrined in federal labor law. The notion that LPAs represent an extra layer of
protection to the city for revenue streams from City-owned properties is specious, since, notably, there
is no history in Santa Monica of labor disputes on those properties. In fact, the only labor issues that
have affected the pier in the past 25 years have come about as a result of the union disrupting, or
threatening to disrupt, the approval process for two restaurants occupying prominent Pier spaces if they
did not accept LPAs.
We also have misgivings about the proposal because it would, if implemented, create a competitive
disadvantage for businesses on city property, compared to other businesses not encumbered by the
new rule.
The LPA proposal would affect the visitor experience. On a typical weekend afternoon, countless
visitors, many of whom are Southern Californians, visit the Pier for its unmatched views of Santa Monica
Bay and the mountains, its family-friendly atmosphere, and the affordability of its restaurants and
shops. The Pier is a venue for the lively arts, as well. Live concerts, outdoor movie screenings and the LA
Opera simulcast are provided free of charge to the public. In short, an enjoyable Pier experience is
accessible to anyone of any income level. This may change if additional burdens are placed on Pier
lessees.
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The uneven playing field that will be created by requiring LPAs of Pier tenants, when they are not
required of competition across the street, will likely create an economic disadvantage for these tenants
who will find it necessary to increase prices to adjust for the additional burden. These cost increases will
be passed along to Pier visitors, exacerbating the economic pressures to raise prices.”
As successful as the Pier is, it is not immune to economic stressors. We are all already working to
accommodate the minimum wage increase. Many of us are changing up schedules and hours to remain
economically viable and maintain the Pier’s brand – wholesome fun, quality products and services and
exceptional security. The proposed LPA requirement would be especially difficult to absorb, while
simultaneously handling the increasing wages, and coupled further with rising costs in health care and
other elements of workers’ compensation.
All of us on the Pier operate on tight margins, and we do not have the flexibility to accommodate
significant changes in operational costs, as may be the case in other industries.
Maintaining our unique local identity should be especially important on iconic city property. Requiring
an LPA would lead to longer periods of vacancy and a greater likelihood of corporate/chain occupants on
locations that are significant, not only to city revenue, but also to the essential character of Santa
Monica.
It is hard to ignore the fact that the unintended consequences of unnecessary labor requirements have
already manifested themselves within steps of the famous Pier entry arch. A promising and attractive
restaurant space lies empty in the nearest hotel to the Pier because labor requirements associated with
its DA have discouraged potential restaurateurs from committing to the space. It is a shame that this has
happened in the wake of the auspicious opening of Expo and the Esplanade. It is disturbing to see this
along the approach to the Pier. We wonder if this is a harbinger of things to come, and fear it will be if
you vote to require LPAs for city tenants.
We all understand that this is a contentious issue. A study session is an ideal forum in which to air the
pros and cons on such a wide-ranging, impactful proposal. It is also an opportunity to bring a broader
group of stakeholders – including restaurant employees, restaurant patrons, and residents – into the
process. Like you, ultimately, we are accountable to them.
We urge you to consider the negative ramifications of the Labor Peace Agreement proposal in your
discussions on Tuesday night and ultimately reject this needless and overreaching pro-union proposal.
Sincerely,
Santa Monica Pier Lessees Association
Cc: Pier Corporation Board, Jim Harris
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1
Vernice Hankins
From:Denise Anderson-Warren
Sent:Tuesday, October 24, 2017 1:48 PM
To:Vernice Hankins
Cc:councilmtgitems
Subject:FW: LPA
Please process as an Add‐to for 8.A.
‐‐‐‐‐Original Message‐‐‐‐‐
From: David Houston [mailto:david@dhhouston.com]
Sent: Tuesday, October 24, 2017 12:18 PM
To: Andy Agle <Andy.Agle@SMGOV.NET>
Subject: LPA
Hello
My name is David Houston and I own Barneys Beanery on the 3rd Street Promenade. I'm writing you to voice our
opposition to the LPA that is being considered by the city.
Our restaurant is currently struggling to remain profitable with the tremendous increase in labor costs. We would not be
able to shoulder the burdens imposed through forced unionization. Our only choice would be to surrender our patio
which is often the most desirable seats in the restaurant. This would diminish our ability to remain competitive and
would impact both the business's revenue as well as the staffs.
Who asked for this? Our staff is happy. They are protected by state and local labor laws and they do quite well for
themselves. This seems like a solution in search of a problem. I'd be happy to talk to you about this further if you'd like.
David Houston.
310‐570‐5199
Sent from my iPhone
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Chair
West Hooker-Poletti
Locanda del Lago
Past Chair
Yesenia Monsour
Kaiser Permanente
Chief Financial Officer
Dave Nelson
Tegner-Miller Insurance
Brokers
Vice Chairman
Richard Chacker
Perry’s at the Beach
Vice Chairman
Michael Gruning
Pence Hawthorn
Vice Chairman
Ellis O’Connor
MSD Hospitality Fairmont
Miramar Hotel &
Bungalows
Vice Chairman
Peter Trinh
Avery/The Craftsman Bar
and Kitchen
Board Members
Daniel Abramson
RAND Corporation
Matthew Allnatt
Jonathan Club
Alisha Auringer
LAcarGuy
Judy Barker
Barker Hanger
Barbara Bishop
BBPR, Inc.
Gauri Brienda-Ramnath
A Day in LA Tours
Julia Cooksey
Frontier Communications
Kiersten Elliott
Santa Monica College
Colby Goff
Rustic Canyon Family
Jeff Klocke
Pacific Park on the Santa
Monica Pier
Mitchell Kraus
Capital Intelligence
Associates
Board Members, Cont.
Bob Kull
The Lobster Restaurant
Tim Kusserow
Carlthorp School
Leonard “Len” Lanzi
Los Angeles Venture Association
Richard Lawrence
National Bank of California
Paul Leclerc
Le Meridien Delfina
Gary Loeb
Chezgal Merchandising Creations
John Loyacono
Bank of America
Sara Mailloux
Hulu
Brian Mac Mahon
Expert Dojo
Jennifer McElyea
Watt Investment Partners
Pat McRoskey
The Water Garden
Greg Morena
The Albright Restaurant
Evan Pozarny
Muselli Commercial Realtors
Susan Gabriel Potter
Bob Gabriel Insurance
Dave Rand
Armbruster Goldsmith & Delvac
Scott Schonfeld
Linwood Ventures
Camille Strickland
Orthopaedic Institute for Children
Nat Trives
Coalition for Engaged Educations
Juan Viramontes
Georgian Hotel
John Warfel
Metropolitan Pacific Real Estate
David Woodbury
Arthur Murray Dance Studio.
October 9, 2017
Santa Monica City Council
1685 Main Street, Room 200
Santa Monica, CA 90401
Re: Proposed Labor Peace Agreement Requirement
Dear Mayor Winterer and City Councilmembers,
We are writing on behalf of the Board of Directors of the Santa
Monica Chamber of Commerce and our over fifty local restaurant
members, to strongly oppose the proposed labor peace agreement
requirement directed at restaurants on city property. We believe it is
unnecessary and would place an undue burden on local businesses,
jeopardizing their continued operation. These negative impacts would
be particularly difficult for our independent or family-operated
businesses.
Both federal law and the city’s existing leasing guidelines
provide strong protections for workers seeking to organize, and there is
no history in Santa Monica of labor disputes with these restaurants
disrupting city revenue streams. We ask that you do not move forward
with this requirement, and that you wait until our local businesses have
fully absorbed the impacts of the minimum wage increase before
exploring any additional requirements.
Competitive Disadvantage and Impacts on Community Character
One of our primary concerns with the proposal is the
competitive disadvantage that it would place on businesses on city
property, relative to those on private land not subject to the new rule.
Santa Monica residents, workers, and visitors cherish the unique
character of our community’s independent and family operated
businesses. Maintaining our local identity should be especially
important on city property. Requiring an LPA would lead to longer
periods of vacancy and a greater likelihood of corporate/chain
occupants on important city locations that are not only significant to city
revenue, but also to the fundamental character of Santa Monica.
We are already seeing this play out at the restaurant
space in one of the new hotels at 5th & Colorado, where labor
requirements connected with their development agreement have
scared away restaurateurs and have left the space empty.
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Local Businesses are Already Struggling with Implementing New Minimum Wage
Increases
The Chamber was supportive of the process the city took in developing the increase to
the minimum wage. We felt it was the right move for both our workers and employers, and it
showcased the thoughtful leadership of our councilmembers. Importantly, that increase was
citywide and part of a larger regional and statewide movement. It did not unfairly target a small
portion of businesses, forcing them to compete with neighboring businesses not subject to the
rule.
Even with its more competitively fair implementation, our local businesses are still
dealing with the challenge of handling the increases, and many independent restaurants have had
to readjust schedules and change hours of operation to accommodate the increase. The proposed
LPA requirement would be especially difficult to absorb, while simultaneously handling related
vendor price increases, coupled further with growing costs in health care and workers’
compensation.
It is also worth noting that restaurants operate on incredibly tight margins, and do not
have the flexibility to accommodate significant changes in operations costs, in the way other
industries can where labor requirements are more common.
Unintended Consequences: Discourages Business Improvements and Outdoor Dining
There are two further potential unintended consequences that we would also like to call to
your attention. First, while some businesses on city property may have years before they will
need to renew their lease, if modifications of their existing lease will trigger the LPA
requirement, we believe this will discourage local businesses from investing and from making
significant improvements that would subject them to the LPA requirement.
Second, from our conversations with local restaurant operators, we’ve heard that if
outdoor dining on city sidewalks were to require an LPA, most restaurants would simply remove
their outdoor seating. This would hurt city revenue and damage the pedestrian oriented
environment and vibrant streets our community has prioritized in its recently adopted planning
documents.
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Conclusion
We urge you to reject the proposed LPA requirement and protect the unique character
that our local and family-operated businesses provide to our community.
Sincerely,
Laurel Rosen
President/CEO
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Hon. Ted Winterer Mayor City of Santa Monica 1685 Main Street Santa Monica, CA 90401
I’ve been a member of this community for 68 years, having been a member of six unions, and served as Vice President of California’s largest police union. I strongly believe in supporting workers’ right to organize themselves, and as a former Mayor of this City understand your desire to keep the peace on City property. What deeply
concerns me about the issue before you, is that it’s not being driven by local restaurant workers looking to organize against bad employers, it is instead coming from an outside organization that is seeking to force workers to waive their right to a private vote to unionize, and instead make that public, through the “card check” requirement in the
LPA. This will open the process to coercion, intimidation, and deception. While it may
be a necessary evil when looking to break some large industry employer with a history of bad employment practices, this is completely unnecessary with our local restaurants, who’s owners, I’m sure many of you know, are progressive leaders in the business community, who understood and supported the city in its recent minimum wage
increase.
During my tenure on city council, we laid the way for many of the character defining elements of our community like the Pier and the Promenade. This requirement would greatly harm the independent businesses and our uniquely Santa Monica
Character. I’ve attached an article I found in the Daily Press today, outlining the
picketing at Spitfire Grill, which shows clearly how this proposal is generating protest (not preventing it). And again, not of employees seeking to organize, but of the union seeking to force your hand on this item. We should not let longstanding, good employers who have dedicated their careers to Santa Monica to be bullied by a union
that does not represent their employees. I hope you will reject the LPA requirement
tonight, and stick with the strong protections for workers in the National Labor Relations Act and the cities current leasing guidelines. Sincerely,
Nathaniel Trives Former Mayor
Cc: City Council Members, City Manager, and Staff
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LABOR PEACE
STUDY SESSION
October 24, 2017
Jason Harris –Housing and Economic Development Dept.
Background
•27 City food service tenants
•Downtown
•Pier
•Beach
•Airport
•Majority of City food service tenants considered small
businesses and are local, independent, non-formula
operators.
City Properties Lease Revenues
City’s Proprietary Role
•Leasing and Licensing Guidelines
•Santa Monica Pier –March 2003
•Downtown –July 2003
•City’s Preference for Small Non-Formula Independent
Businesses
•Airport Leasing Policy –March 2015
•Council Directive –August 2016
Labor Peace Agreements
•Labor Peace Agreements (LPAs) come in many forms
•Los Angeles World Airports Labor Peace Policy
•Executed LPA required
•LPA prohibits picketing, work stoppages, boycotts for the
duration of the LPA
•Policy includes a mediation process
Community Input
•Uncertainty
•Legal expense
•Increased operating costs
•Thresholds
•LPA Template
•Business protections
Alternatives
1.Enact LAX Requirement
2.LPA with Guidelines
3.LPA with Threshold Exemptions
4.LPA with No Strike Pledge
5.Keep As-Is
6.Good Faith Negotiations
7.Remove all Requirements
LABOR PEACE
STUDY SESSION