Irony watch: Center advocating for higher wages sued for not paying workers

by Eric Boehm | Watchdog.org

A workers’ center based in New York City that uses protests and other union-organizing tactics to push for an increase in the minimum wage was sued by some of its own employees.

The reason: failing to pay them.

In a lawsuit filed in U.S. District Court in New York, eight former employees of the Restaurant Opportunity Centers United alleged they were abused and exploited by the organization. The 2007 lawsuit, though ultimately unsuccessful, sought back pay and other compensation from the organization.

The lawsuit was dismissed in 2007 because a federal judge ruled the plaintiffs didn’t meet the legal definition of being employees.

“The allegations here are the same ones they throw at restaurants all the time — poor treatment of employees and low pay,” said Mike Paranzino, spokesman for ROC Exposed, a group critical of the workers’ center.

Calls and emails to ROC were not returned Wednesday. The group’s website indicates their mission as “to raise the wages and conditions of the nation’s 10 million restaurant workers.”

In an interview with Z Magazine earlier this year, ROC United founder and co-director Saru Jayaraman said the group’s “big fight right now is to raise that absurdly low minimum wage of $2.13 an hour.”

In the same interview, she identified ROC as “part of the labor movement.”

“If you look at the number of workers who are in unions, yes, that’s obviously been in decline,” Jayaraman said. “But there is tremendous growth in worker organization and worker associations like ROC all around the country.”

WHAT THEY WANT: Saru Jayaraman, founder of Restaurant Opportunities Center, says the group’s “big fight right now is to raise that absurdly low minimum wage of $2.13 an hour.” The group was sued for failing to pay some of its own workers.

Indeed there has.

As we previously outlined, ROC has garnered national attention for their disruptive protests and Occupy Wall Street-style tactics.  Though the group began in New York, it has branched out considerably in recent years, launching more than 20 affiliates in other major cities.

Lawsuit alleged ROC United turned the tables

The eight plaintiffs had worked at the Windows on the World restaurant atop one of the two towers of the World Trade Center in downtown Manhattan. When the restaurant was destroyed in the Sept. 11, 2001, terrorist attacks, ROC was formed to help former employees find work.

One of the first initiatives undertaken by ROC after its formation was the launch of a cafe, named Colors. The restaurant was supposed to provide a work place for some of the displaced Windows on the World workers.

The plaintiffs argued they were promised a share of ownership of the restaurant in exchange for “sweat equity” — 100 hours of unpaid labor to help get Colors off the ground — if they joined the restaurant’s “Cooperative Committee.”

Over the next two years, plaintiffs served on the committee and worked at the restaurant. They also staffed fundraising events for ROC, but all pay and tips were directed to the organization.

After they put in the designated 100 hours, they were denied their rightful stake in the company, according to court documents.

In October 2004, workers were presented with a contract and told they must sign it or lose their stake in the company, according to court documents. That contract required more unpaid labor, so the eight individuals left the organization and launched the lawsuit against the very same organization that was founded to help their cause after 9/11.

Instead of settling with the disgruntled employees or offering to pay them, ROC fought the lawsuit and eventually got it dismissed from federal court in 2007.

Since the individual plaintiffs were working “for and together with a not-for-profit corporation towards the co-ownership of a business,” Judge Deborah Batts concluded the arrangement didn’t fit the employer-employee model and dismissed the plaintiffs’ on the grounds that ROC did not violate federal labor law.

ROC United, the parent organization still based in New York, had a budget of more than $2.65 million in 2011 and has received at least $240,000 in government grants, according to tax filings.

The group is a nonprofit registered with the IRS as a 501(c)3, but it has attracted plenty of support from labor unions, including praise from the national head of the AFL-CIOlast year.

Eric Boehm is a reporter for Watchdog.org and can be reached at[email protected].  Follow him on Twitter at @EricBoehm87.

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