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Borders between business, politics blur for operators

Borders between business, politics blur for operators

Restaurateurs looking to attract the nation’s growing number of Hispanics as customers and employees are finding themselves caught in the mounting tensions of the shifting demographic landscape.

As more operators introduce menus, training tools and advertising in Spanish, they increasingly are encountering incidents where sentiments about immigration clash, especially in communities where emotions about the issue run high.

“Our industry is a huge employer of Hispanics and Latinos,” says Gerald A. Fernandez, president of the Multicultural Foodservice and Hospitality Alliance. “We are just one black eye from us being on the front page in a negative way.

“We are one major conflict from a major altercation with gunfire or something, where management didn’t recognize it or didn’t know what to do about it. Our industry will be stuck in the middle because we rely disproportionately on the immigrant communities.”

The owners of a Hampton Bays, N.Y., diner claimed in mid-July that they had found themselves in just such a position. Frank and Maria Vlahadamis filed a $55 million lawsuit against the town of Southampton, N.Y., alleging that the town’s police department attempted to shut the diner down because it had launched a “Latino Night” to appeal to the area’s burgeoning Hispanic population.

The couple, which has owned the Hampton Bays Diner for 25 years, filed the lawsuit July 18, claiming the town government and police officials violated the couple’s constitutional rights to free association by blocking off access to the restaurant and bullying patrons.

“Based on the circumstances, there is little doubt in my mind that the attacks are racially motivated,” says Andrew Campanelli, the Mineola, N.Y., lawyer representing the diner’s owners.

He adds that restaurants are considered “public accommodation” and fall under civil-rights acts. The town has denied the charges.

“There are multiple restaurants in the town of Southampton that are doing exactly what my clients are doing,” Campanelli says. “It’s a seasonal community. In the summer they do very well; in the winter, it’s obviously slower. So in order to draw the maximum number of patrons during the season, many restaurants bring in DJs to play music to encourage patrons to come in. By choosing the type of music you play, you can target a certain type of customer.”

The Hispanic population in Hampton Bays has increased significantly in the past decade, Campanelli notes.

“My client is the first to actively cater to Hispanics,” Campanelli says. “They started with an Hispanic menu in addition to the ordinary menu. Once the ‘Latino Night’ on Saturday night started, that’s when the attacks started.”

Campanelli says the alleged “intimidation tactics” included local police cars blocking the entrance and exit to the restaurant for 45 minutes with the police never entering the restaurant. In addition, Campanelli says the community brought cases before administrative law judges to revoke the diner’s liquor license, but those were thrown out.

“This is a husband and wife who have owned the liquor license for 25 years, and they started hosting the Latino Night and the complaints began,” Campanelli says.

The diner has discontinued the Latino Nights.

Even as some restaurants grapple with frictions fostered by changing demographics, many operators, especially large corporations, are developing extensive programs to better deal with the growing number of Hispanics in the workforce.

The U.S. Hispanic population of more than 44.3 million is the nation’s biggest minority, and that total is expected to increase by more than a million each year. Technomic, the Chicago-based research group, reports that the purchasing power of Hispanics exceeded $868 billion in 2007, and the Census Bureau expects that buying power to exceed $1 trillion by 2011.

Latinos and Hispanics “play an integral role from the boardroom to the dining rooms of our 1,700 restaurants,” says Drew Madsen, president and chief operating officer of Orlando, Fla.-based Darden Restaurants Inc.

Darden owns Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52.

“We are proud to be an organization that has cultivated a diverse workforce that reflects our identity,” he says. “Darden sponsors a multiday Diversity Learning Experience for all of our general managers and directors of operations to help them better lead our diverse teams, including Hispanics.

“We also have long-standing relationships with the Latino and Hispanic community and support organizations across the country that strive to create opportunities for Hispanics, such as the Hispanic Chamber and the National Council of La Raza.”

Fernandez of the MFHA says restaurant operators’ local involvement helps mitigate any future problems.

“Restaurateurs need to get involved in their local communities, to get connected and to know what the issues are,” he says. “Know if the Hispanic leaders in the community are for or against your industry. You can’t talk about this if you don’t know.”

Madsen says Darden sees great opportunity for Hispanics in its operations.

“Latinos and Hispanics represent a significant growth segment for our workforce,” he says. “We have Latino and Hispanic directors of operations and general managers of our restaurants. We are focused on staffing our restaurant support organization with Latino and Hispanic leaders at all levels who understand the Latino and Hispanic culture to better serve our operations and field employees.”

Report: U.S. to see Hispanic population boom

The U.S. Hispanic population, already the nation’s largest minority group, will triple in size by 2050 and will account for most of the nation’s population growth in that period, according to the Pew Hispanic Center, a nonpartisan research organization based in Washington, D.C.

In a report released in February, the center said the non-Hispanic white population will increase more slowly than other racial and ethnic groups; whites will become a minority, at 47 percent, by 2050.

Hispanics will make up 29 percent of the U.S. population in 2050, compared with 14 percent in 2005, the Pew report said.

The research center said if current trends continue, the population of the United States will rise to 438 million in 2050, from 296 million in 2005, and 82 percent of the increase is expected to come from immigrants arriving between 2005 to 2050 and their U.S.-born descendants.

Of the 117 million people added to the population during this period, 67 million will be the immigrants themselves and 50 million will be their U.S.-born children or grandchildren.

The Pew Hispanic Center, in its projections, said nearly one in five Americans, or 19 percent, will be an immigrant in 2050, compared with one in eight, or 12 percent, in 2005. By 2025, the immigrant, or foreign-born, share of the population will surpass the peak reached during the last great wave of immigration a century ago.— Ron Ruggless

Darden’s Hispanic Employee Network recently held a daylong session to gain greater insight into better ways to recruit and retain Hispanics, Madsen says. In addition, he notes, a number of Hispanics hold senior leadership positions at Darden, including Valerie Insignares, executive vice president of operations for Olive Garden; Rick Cardenas, senior vice president of finance for LongHorn Steakhouse; Rob Viveros, senior vice president of operations for Olive Garden’s Dallas division; Mark Gonzalez, vice president of consumer insights for Olive Garden; and Ana Hooper, vice president of total quality for Darden Restaurants.

To better connect with Hispanic employees, Darden offers educational and informational materials in Spanish.

“At Darden, we ensure our employees of diverse backgrounds understand company policies and procedures, and we translate written communications into Spanish, including health benefits, tax forms, training materials and recipe cards,” Madsen says. “We also strive to place Spanish-speaking employees in various areas of human resources, including employee relations, benefits and recruiting.”

But efforts by operators to reach a broader audience are not always widely welcomed, especially when it comes to Spanish versions of menus.

Bennigan’s Grill & Tavern, the 310-unit casual-dining division of Metromedia Restaurant Group of Plano, Texas, in June rolled out a Spanish-language menu nationwide. Each restaurant now has copies available to offer Spanish-speaking guests.

“The U.S. Hispanic community is our country’s fastest-growing segment, and this new menu is just one more way we can welcome those customers,” says Jennifer Gamble, director of marketing for Bennigan’s. “Hispanics purchase a meal outside of their home as many as four times a week, and we don’t want language to be a barrier. This Spanish menu gives our servers that option when they need it.”

But locals were divided on the need for Spanish menus. On the comments blog for The Dallas Morning News, Buzz Priestley, a teacher in Frisco, Texas, wrote: “If any business believes it can better serve customers with Spanish, Urdu, Ebonics or Pig Latin promotional materials, good for them; they are simply taking advantage of marketing opportunities.”

Richard Buchanan of Allen, Texas, countered, saying that if he placed an order at a fast-food restaurant, “it’s no better than a 50/50 chance that your order will be correct, due to the language barrier. I graduated from high school and college and never took a foreign language because I live in a country where English is spoken, and I didn’t see the need to. Still feel the same way.”

Given the money to be made from tapping into the Hispanic market, however, many restaurants, including the brands owned by Darden, are undertaking increasingly targeted initiatives.

“Hispanics represent the fastest-growing segment of the population and possess tremendous buying power,” Madsen says. “LongHorn Steakhouse, for example, is currently developing dishes to appeal to Hispanic taste preferences, and Olive Garden, which began marketing to Hispanics two years ago in key markets, just rolled its Hispanic marketing program out nationwide this month. The program includes Spanish commercials that feature promotional menu items and convey Olive Garden’s brand promise of ‘When you’re here, you’re family’ in a slightly different way–“Aqui estas en casa”–that translates, ‘When you’re here, you’re home.’ Olive Garden is the first casual-dining chain to advertise nationally in Spanish. The current campaign is also a great source of pride for Hispanic team members.”

Fernandez says many “companies have figured out how to talk to the customer, but sometimes talking with the workers in the back-of-the-house hasn’t been as effective.”

Darden, however, says it has actively recruited Hispanics through involvement with organizations including the Hispanic National Society of Minorities in Hospitality and the National Society of Hispanic MBAs.

In addition, Darden offers seminars and workshops that foster the personal and professional growth of Hispanic employees, Madsen says.

“Darden has a focused effort on identifying Hispanic talent and providing development opportunities to enrich their experience,” he says. “Our leaders’ performance goals support the effort as well. Our talent recruiters also have a deep understanding of the business case for recruiting Hispanics and are held accountable for attracting diverse segments of the population.”

Noting that Hispanics make up between 18 percent and 23 percent of the restaurant industry’s workforce, Fernandez says operators need to be more proactive in attracting and retaining Hispanics.

Operators call for national immigration reform

In the absence of federal immigration reform, which failed in Congress last year, a number of states are cracking down on the hiring of illegal immigrants by enacting laws to require businesses to check a federal database on worker eligibility.

In July, Mississippi began requiring businesses to check their workers’ legal status by using E-Verify, the federal database that verifies whether new hires are eligible to work in the United States. A new state law in Georgia requires the state’s public employers, contractors and subcontractors with at least 100 employees to use E-Verify as well. A new law in Oklahoma requires companies that do business with the state to use E-Verify or risk losing government contracts. However, in June a federal judge temporarily blocked the law in the wake of a lawsuit brought by Oklahoma businesses that claims the federal law preempts parts of the state law.

The state use of E-Verify began in Arizona when a new law went into effect Jan. 1, requiring businesses to clear workers through the database. Those businesses found to have violated the law more than once faced a sudden-death loss of their business license.

“The events in Arizona have begun to clarify the impact reform legislation will have on employers and to highlight why this issue needs to be addressed at the national level,” said Robert Meltzer, chief executive of VISANOW in Chicago, a company that helps corporations and their foreign-born employees with legal matters and the immigration process. “Following the introduction of the legislation, employers have had to take a step back and sincerely review their internal hiring and staffing processes. Once the risk of increased sanctions came into play, the new reform law really forced the issue for companies.”

The law is a problem for any company doing business in more than one state, Meltzer said.

“This problem is that this legislation addressed enforcement but, seeing as it only operates at the state level, cannot address the key issue,” he said. “Employers need federal comprehensive immigration reform to provide a pool of legal workers to staff their operations.”

It has also pitted some businesses against each other, Meltzer added.

“We’re also beginning to see a split between industries,” he says. “Some companies have welcomed the legislation, as it evens the playing field, and they don’t have to contend with competitors utilizing undocumented labor. On the other hand, those within industries that traditionally have relied on lower-skilled and foreign labor—hospitality and restaurants being a key segment—are struggling to fully staff and are really feeling the restraints of a limited labor work pool.”

Arizona has turned into something of a case study for other states, he said.

“Although most states have already implemented some level of legislation addressing immigration, whether regarding issuance of driver licenses or extending state benefit support programs to cover migrant workers, Arizona has really pushed the envelope and introduced perhaps the most comprehensive program to date.”

All the various state laws highlight the need for a national approach, Meltzer explained.

“The states can answer the enforcement issue to a degree, but the key component is the legalization of the currently undocumented workforce in the U.S.” he said. “Without a path to legalization for these workers, restaurants, construction firms, resorts, and others within the hospitality and service industries will all struggle to operate at capacity.”— Ron Ruggless

“It’s not news to anyone in our industry that in many parts of the country Hispanic-Latino workers are the dominant group in the back-of-the-house,” he says. “Our industry is largely not engaged in our future. We need to be engaged in schools, not only to build the image of our industry to show kids that you can go from dish-washing to the boardroom.

“If we don’t figure out how to engage on key issues and other retail [business] does, we are going to be getting the bottom-of-the-barrel workers. We can be part of the solution or sit back and watch what happens. We need to be proactive and be a part of the solution. We can do so bipartisanally. Our industry is being demonized.”

Yet while regional tension exists and states continue to wrestle with immigration issues, many operators say they are happy to see more opportunities than challenges in the shifting demographics.

“We believe by learning from individual differences, we can build stronger and more dynamic businesses and communities,” Darden’s Madsen says. “A diverse workforce enables us to draw upon a multitude of perspectives and enhances the experience of employees and guests alike.”

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