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Lawsuit says living wage discriminates

By Judith Scherr Daily Planet Staff
Friday October 27, 2000

Attorneys for Skates by the Bay have sued the city, saying the amended Living Wage Ordinance that covers Marina properties unfairly discriminates against them and will cause them and their employees irreparable harm. 

In June, the city passed a Living Wage Ordinance that requires employers doing business with the city or leasing property from the city to pay their employees a “living wage,” determined to be $9.75 per hour plus $1.62 if benefits are not paid. 

Advocates for workers at the Marina lobbied for an amendment to the ordinance to cover low-paid hotel and restaurant workers at the Marina. All Marina property is owned by the city and leased by various corporations, the largest of which are restaurants and a hotel-restaurant. 

Without the amended ordinance, Marina businesses which have more than six employees and generate more than $350,000 annually, would be covered by the ordinance only after their leases are renegotiated with the city. In some cases, that would be in 20 years. 

The City Council amended the ordinance in September, stating that the use of the Marina by a private enterprise is a privilege and should not “exacerbate the problems associated with inadequate compensation of workers.” 

The Marina lands, as Public Trust tidelands, “are for the use and benefit of the public,” according to the ordinance. “The public interest is best served by ensuring that the public is not deterred from visiting the Public Trust tidelands because they do not wish to patronize businesses (that) do not pay their employees a living wage or provide them with health care benefits.” 

Zachary Wasserman, attorney with Wendel Rosen, Black & Dean of Oakland, filed a lawsuit in U.S. District Court earlier this month. Wasserman said by enacting the amendment, the city “unilaterally” altered the leases of the four affected businesses at the Marina. 

The lawsuit explains that Skates employs about 170 people. “The estimated cost of implementing the provisions of the amendment, not including administrative fees, is a minimum of $175,000 per year,” the lawsuit states, noting that the administrative fees would be considerable, given the various ways different employees’ health benefits are calculated. 

The consequences of paying out that sum of money could include “increased prices, consolidation of jobs, elimination or reduction of part-time employment, elimination of non-mandated benefits, reduced hours of operation or potentially closing the restaurant depending on the total impact,” according to the suit. 

If prices were raised at the Marina restaurants to compensate for increased costs, other restaurants in the city which do not suffer the same requirement to pay a living wage, would have an unfair advantage, Wasserman said. 

He further points out that “the city puts more money into downtown than it does at the Marina,” yet the downtown businesses, which benefit from that support, are not subject to the provisions of the Living Wage Ordinance. 

The new ordinance would not affect many of Skates’ workers, Wasserman said. “Many waiters, many employees at Skates earn more than the Living Wage,” he said. Others are students who opt to work part time, and there are others for whom the Skates’ job is a second part-time job.  

One of the problems is the mandated 12 paid days off per year, which includes paid holidays. “The restaurant industry typically does not give paid vacations until the employees have been there a significant amount of time,” Wasserman said. 

Amaha Kassa of the East Bay Alliance for a Sustainable Economy, one of the organizations which has supported the unionization of workers at the Berkeley Marina Radisson Hotel, argued that the RUI Corp. would have no problem paying its workers more money. He points to the June, 1998 Puget Sound Business Journal which says that each of RUI Corp’s restaurants were expected, after some time, to bring in about $5 million. A June 23, 2000 article said the corporation had taken in $105 million in 1998 and $117 million in 1999. 

In a written statement, City Attorney Manuela Albuquerque said her office had looked closely at the ordinance and its amendment and believes it is defensible.  

“Because the city has severely restricted development in this special zone, businesses such as Skates located there enjoy a monopoly position and hefty profits,” she wrote. “By applying the Living Wage to businesses in this zone, the Berkeley City Council has said that a tiny amount of those profits need to be shared with those invisible hard-working men and women in these businesses who do not get a living wage, yet who make it possible for the rest of us to dine, cruise and vacation in stunning surrounding, financed by public funds.”