As the old adage goes, nothing—except for taxes—visits us with more predictability and certainty than death. However, deaths that affect foodservice businesses often don’t have the same finality that’s generally associated with the extinguishment of a human flame.
Indeed, lasting inspiration and other kinds of positive, long-term consequences—sometimes for the profound betterment of survivors—can result from the deaths of foodservice companies’ founders, leaders, customers and restaurant workers.
Of course, inspiration after the passing of exemplary executives only comes after grieving gives way to corporate heirs’ reflections on departed comrades’ principles and common-sense ways with business relationships.
Just ask folks in the Wendy’s organization who worked with its late founder Dave Thomas or the two company leaders who preceded him in death. Or the executives now heading the Ruth’s Chris Steak House chain, who inherited the entrepreneurial legacy of the late Ruth Fertel. Or ask the current chieftain at McDonald’s, who took command only after his two immediate predecessors died in rapid succession.
Consider, also, the deceased chain leader who left behind more than inspiring memories, by dint of the practical preparations he had made for his own potential passing. Just as he had intended, that planning paid off in the form of a posthumous windfall for the company that put millions of dollars on its bottom line.
But deaths under very different circumstances can take far more troubling tolls on restaurant companies than even the loss of a valued leader.
Long after prolonged wrongful-death lawsuits are adjudicated or settled, the liability aversions that are triggered by the tragic passings of patrons or employees can exert the most far-reaching influences on accident prevention initiatives and health catastrophe avoidance measures.
Consider the sweeping reforms that have nearly obliterated the risks of lethal E. coli bacterial infections through tainted meat, a remedial turnaround inspired largely by the deaths of four children 15 years ago. Those fatalities—of kids from San Diego to Seattle in a five-state outbreak that sickened some 700 people and was blamed on under-cooked hamburgers from Jack in the Box—were compelling factors in the mass movement to adopt hazard analysis and control protocols and conduct more rigorous inspections of meat facilities.
A senior partner at Marler Clark, the prominent Seattle law firm that has been a frequent nemesis of businesses defending themselves against wrongful-death complaints linked to foodborne illnesses, attests to the power that such fatalities can have.
“I struggle to think of the last time I had an E. coli case tied to a restaurant outbreak” involving hamburgers, attorney William Marler says. Though 95 percent of his firm’s still-burgeoning caseload once involved E. coli hamburger cases, “that has gone to zero,” he says.
For “companies whose brand is everything, being tied to death or severe illness obviously is not something that’s good for sales,” he says in assessing the reasons for such remediation.
“The reforms that Jack in the Box started requiring of their vendors, in addition to governmental reforms that Jack in the Box was supportive of, over time changed the whole complexion of E. coli and the restaurant industry,” Marler says.
Similarly, Marler says, the deaths of three consumers last year from their consumption of E. coli-tainted spinach appear to be provoking a groundswell of produce safety reforms that ultimately could spare restaurateurs from recurrent hardships and save countless lives.
And deaths of customers from food allergies have prompted a growing vigilance on the part of restaurant operators. Informed disclosures to guests who inquire about food ingredients are being done with greater regularity and thoroughness as a result of cooks and servers who are better trained to know the contents of a restaurant’s dishes.
“I’m encouraged for the first time in 15 years that the restaurant industry is finally embracing food allergies training. This is a sea change,” says Anne Muñoz-Furlong, founder and chief executive of the Fairfax, Va.-based Food Allergy & Anaphylaxis Network. Restaurants, she says, “are asking the question, what changes in training should I do?”
Unfortunately, the driving factors in those training enhancements are the sudden deaths of unwitting diners. In an analysis of 32 fatal reactions to food that occurred in the five years from 1994 to 1999, 47 percent were caused by restaurant meals, Muñoz-Furlong says. Nearly the same ratio of deaths, 46 percent, was related to restaurant meals from among 31 lethal allergic food reactions monitored from 2001 to 2006, she adds.
But those two studies only suggest the proportionality of restaurant connections to deadly food reactions, whose actual numbers could be far higher, she points out. “We estimate there are about 150 deaths per year from food allergies,” she says.
The undisclosed or unknown presence of peanuts is the most common cause, accounting for 60 percent of such deaths, followed by tree nuts, 28 percent, and milk and shrimp, 12 percent.
At a National Restaurant Association board meeting she visited last month that was attended mostly by chain operators, “almost every one of them expressed interest in training” in food allergenicity, Muñoz-Furlong says.
“It’s on the radar for these people,” she says, “and that’s because we know these food-allergic individuals are going to restaurants and asking questions.”
Most lawsuits involving restaurant-related food allergies are settled out of court and most are sealed agreements, but a typical cost to an affected operator could be “in the hundreds of thousands of dollars, if not in the millions,” Muñoz-Furlong says. “But the other side of it is the negative publicity, and it can be avoided.”
Though more indirectly related to potential deaths, the sweeping push by restaurants to shed trans fats appears to reflect operators’ concerns about the public’s attitude toward dire pronouncements by medical authorities about the dangers of hydrogenated oils. For example, Dr. Walter Willett, head of the nutrition department of Harvard University’s medical school, has stated that the deaths each year of as many as 100,000 Americans from heart disease, and 40 percent of all cases of type 2 diabetes, can be linked to the consumption of foods containing artificial trans fats.
Without question, estimates by epidemiologists that second-hand tobacco smoke hastens the demise of nonsmokers have factored into the nationwide movement among lawmakers and proactive restaurateurs to prohibit smoking in foodservice establishments and other enclosed workplaces. Again, one impetus for the acceptance or even promotion of no-smoking laws by some restaurateurs has been their concern that juries might one day support liability lawsuits by career food servers who worked in establishments that permitted smoking.
More immediate and pressing risks for operators who serve alcoholic beverages are the potential multimillion-dollar damage verdicts that can result from the strict laws that assign wrongful-death liability to restaurants for drunken-driving fatalities caused by customers who were served drinks after they would have shown signs of intoxication.
Though accidental and crime-related deaths of foodservice employees still pose worries for operators, those risks have been declining for a decade, according to the most recent data on such deaths from the federal Bureau of Labor Statistics. BLS figures for “food services and drinking places” show a 9-percent drop in fatal mishaps and homicides affecting restaurant workers in 2005, with 107 such incidents occurring, compared with 118 in 2004.
Still, BLS statisticians indicate that the majority of workers’ on-the-job deaths continue to result from violent encounters with fellow co-workers or ex-staffers, armed robberies, rampage killings, and domestic disputes, with 73 such killings in 2005, compared with 77 in 2004.
WHEN LIFE GIVES YOU LEMONS… Investigate the cost of “key-man” life insurance policies that name the company as the beneficiary in the event of the death of a senior executive. Routinely audit the thoroughness of hazard analysis and control protocols that enable the continuous monitoring of critical food safety factors. Press lawmakers, regulators and produce vendors to develop and implement more consistent and systemic safety reforms to help prevent and more rapidly trace the sources of potentially lethal illness outbreaks linked to fruits and vegetables. Review the comprehensiveness of your company’s food ingredient database and staff training to ensure that cooks, servers and managers can properly respond to questions from customers with food allergies. Re-examine your methods for ensuring compliance with training of bartenders, servers and managers about the liability risks of alcohol sales to guests who appear intoxicated. Be sure that violent-crime-related crisis management plans include active efforts to ensure that workers understand and comply with training routines.
Transportation accidents were the No. 2 cause of restaurant employee fatalities—19 in 2005, versus 20 in 2004. In both years, six workers were killed from falling. However, one type of worker fatality was on the increase in 2005, with seven employees perishing from “exposure to substances or environmental conditions.” None died from those causes in 2004.
Violent crimes that could take the lives of restaurant workers keep chains’ risk management officials watchful about prevention measures. There again, litigation has been an impetus, such as one case some years ago involving a Taco Bell restaurant that was held responsible because it had merely posted safety rules about unlocking a back door at night to dispose of trash. That was held to be an insufficient defense against liability for bodily harm, absent evidence of active training and monitoring by management to ensure compliance with the rules.
CARRYING ON WITHOUT DEPARTED LEADERS Big chains often are led by larger-than-life individuals who inspire dedication and diligence among their executive underlings and even in the ranks of far-flung restaurant workers and managers. Because of such talents, organizations can feel bereaved and rudderless when death takes ranking figures whose influence and reputations have grown in step with their career ascents to the top. How leadership heirs manage the transition of power after such a passing puts their executive skills to the test and requires a deft handling of human emotions, including the successor’s own feelings. “It was a tumultuous and somewhat traumatic time in 2004,” Jim Skinner, McDonald’s Corp. vice chairman and chief executive, said in the aftermath of his ascendency in November of that year to lead the world’s largest restaurant chain. Skinner’s two immediate predecessors as CEO had died in the span of less than a year—Charlie Bell from cancer, and Jim Cantalupo before that from a heart attack. After Bell’s passing, Skinner admitted that “on the personal side, it was difficult for McDonald’s, which lost two great friends and leaders.” Wendy’s also had to roll with the punches delivered by the deaths over a period of just a few years of three highly respected leaders. Founder and longtime TV pitchman Dave Thomas died in 2002 at age 69, only a few years after the death of chairman Jim Near and then of chairman and CEO Gordon Teeter. A few years after Thomas died, Wendy’s then-chief executive Jack Schuessler reflected on the men who had preceded him, and how they once had seemed such permanent fixtures in the company’s leadership firmament. “I never thought I would be CEO,” Schuessler said in a 2004 interview in which he told of having learned from the experience of helping a company and its employees cope with grief. “I try to take better care of myself,” said Schuessler, who explained that he worked out with weights and walked as an exercise regime. “I try to find stress relievers, and I delegate and pass along the responsibilities. I let people do their jobs.” But Schuessler also developed a succession plan at Wendy’s that encompassed replacement contingencies for 50 critical executive positions. Another kind of strategic defense against the potential loss of a leader is “key-man” insurance coverage. The board of directors of Cincinnati-based Frisch’s Restaurants Inc. made just such preparations under the chairmanship of former president and chief executive Jack C. Maier. After he died in February 2005, the operator of Big Boy and Golden Corral restaurants collected on several such policies covering his life. The $4.4 million nontaxable benefit, from aggregate proceeds of nearly $9.2 million, represented fully 30 percent of the company’s $14.7 million net profit that year, and 86 cents of its $2.86 earnings per share. Karen Maier, Frisch’s vice president of marketing and one of its directors, says a decision about purchasing the kind of insurance taken out on her father’s life “strategically is an overall board issue.” But a more lasting corporate legacy might be the examples that Jack Maier set for surviving colleagues. “My dad had a lot of long-term relationships with employees because he worked in the restaurants,” Karen Maier says. Though Frisch’s has some 8,000 employees, “we’re still a small company,” and Jack Maier’s passing “was a familial loss for a lot of people here,” she adds. “He rubbed shoulders, if you will, with a lot of people; they watched as his health went downhill and they felt very, very sad.” But his passing ultimately may have caused associates to re-examine Maier’s values and draw from them to the lasting benefit of the company. “My best guess is, yes, I believe it did,” Karen Maier says, “because one of the things he was best known for in the company was his fairness and honesty.” Even though Jack Maier is gone from the scene and the company his grandfather founded in 1907 now is run by Maier’s son Craig Maier, the departed leader’s lasting imprint on Frisch’s and its people could be seen as a kind of business immortality, a way in which he lives on at the company. “I would like to think so,” Karen Maier says. “I know he’s here for me.”— Richard Martin
In leading the industry’s No. 3 burger chain, former Wendy’s chief executive Jack Schuessler saw another side of the on-the-job-death equation after five New York City Wendy’s employees were shot to death in robbery seven years ago. First, however, Schuessler had to overrule legal advice that corporate condolences to survivors could be construed as admissions of responsibility.
“We gave a lot of thought from a legal standpoint,” he said in a 2004 interview, “but in the end we decided to do the right thing.”
Schuessler personally called the grieving families, and he or another top Wendy’s official attended each funeral.
“That was one of the hardest three or four days I have ever experienced,” he said.