Another hidden gift inside the Affordable Care Act: mandatory calorie labeling for many restaurant menus. Walter Olson comments on the complications and potential unintended consequences of such a mandate.
My new Cato podcast: the new FDA calorie labeling rules apply to not-so-big chains (20 +) of grocery stores and amusement facilities as well as restaurants, and make it less likely that servers and local managers will manage to vary from rigidly standardized recipes, menu listings and portion sizes based on knowledge of their local customers, temporary availability of attractive ingredients, and so forth. That won’t matter much for food servers who already design their offerings in a lab, but spells trouble for those whose offerings are more localized or unpredictable (earlier). Coverage by Ed Morrissey of what the scheme would mean for a 21-unit pizza chain is linked here.
In January, David Boaz commented on the parallel vending machine calorie label mandate:
In my experience, vending machines shuffle their offerings fairly frequently. If the machine operators have to change the calorie information displayed every time they swap potato chips for corn chips, then $2,200 [per operator per year] seems like a conservative estimate of costs. But then, as Hillary Clinton said when it was suggested that her own health care plan would bankrupt small businesses, “I can’t be responsible for every undercapitalized small business in America.”
More: Julie Gunlock recalls her own days working in a supermarket deli. Goodbye, making up prepared salads in single-serving containers from whatever produce happened to be in overstock at the time. Hello, food waste!
Under a potentially far-reaching ruling by a federal judge interpreting California state law, satellite and streaming music services like SiriusXM and Pandora — and maybe bars and restaurants too — could be liable for vast sums for having broadcast pre-1972 recordings without obtaining “public performance” permission under California state law. [Hollywood Reporter's THR Esq; plus a very informative take from Jesse Walker]
In this Cato podcast (7:01), I talk with Caleb Brown about the National Labor Relations Board’s groundbreaking attempt last week to tag McDonald’s with liability for labor violations found at its independently owned local operators. (Reportage: Steven Greenhouse, NYT; Jon Hyman; Diana Furchtgott-Roth/RCP) It’s a drastic departure from current law that would carry implications for outsourcing more generally: a food company that contracts with independent farmers to grow a particular crop, for example, might wind up being liable for the farmers’ treatment of farm workers, a company that outsources its cafeteria, vehicle maintenance, or janitorial services to outside vendors might become legally responsible for ensuring the labor-law compliance of those contractors, and so forth.
The McDonald’s case is the first of what is expected to be multiple cases filed by the NLRB’s general counsel (akin to a prosecutor), and the full Board has not ruled on the resulting complaints, although given the union-friendly role of the Obama NLRB that is likely to be little more than a formality. The initiative will inevitably land in the courts, which have not always been friendly toward Obama regulatory adventurism, and perhaps eventually the Supreme Court.
One consequence, successful or otherwise, if this ploy works: by treating legally distinct entities that contract with each other as if they were parts of a single vertically integrated enterprise, progressive labor law thinkers will create an incentive for giantism to become more real, by giving fast-food franchisers, for example, legal reason to move toward company-owned rather than independently-owned store arrangements. Not for the first time, the law would mow down the ranks of mid-sized businesses in favor of large or nothing. Commentary from others: Megan McArdle; Stephen Bainbridge; Catherine Fisk, On Labor (supporting the idea); Steve Caldeira, The Hill; Alex Bolt. And a relevant House hearing.
Nigel Sykes, currently serving a 15-year sentence, is suing employees of Seasons Pizza in Newport, Del. who allegedly tackled him as he was robbing the pizzeria at gunpoint. His suit, filed without a lawyer, asks in excess of $260,000, saying employees of the dining establishment beat him up and poured hot soup on him. “While U.S. District Judge Sue L. Robinson tossed out several of Sykes’ claims, she allowed the case to move forward against the pizza employees, two arresting officers and Seasons.” Sykes, whom police linked to a series of robberies at a bank and various retail establishments, had filed an earlier suit with different factual allegations which was dismissed on procedural grounds. He has also claimed that he should be allowed to take back his plea in the criminal case, arguing in a motion, “I’m not good at making good choices.” [Sean O'Sullivan, Wilmington News Journal]
California legislature does something sensible! [L.A. Times; earlier on this regulation, widely protested by bartenders, sushi chefs and other food and drink professionals] Next headlines to come: blue moon, month of Sundays, and the unexpected freezing over of Hell.
They’re being helped along by tech advances (also — shhhh! — by minimum wage hikes) [Ira Stoll, Future of Capitalism; Bloomberg BusinessWeek]
Music rights organization BMI has sued a Cleveland bar seeking up to $1.5 million over one night’s performance by a cover band that allegedly performed ten well-known songs without paying license fees, including “Bad Moon Rising,” “You Really Got Me,” and “Some Kind of Wonderful” [OnStage]
Safer to have the failed business go through total liquidation, it seems:
An employer that acquired the assets of a defunct bar and restaurant and continued to operate a restaurant on the same premises was liable for unpaid wages owed to the defunct restaurant’s former employees, the Oregon Supreme Court has ruled. Blachana LLC v. Bureau of Labor and Industries, No. S060789 (Ore. Jan. 16, 2014).
Reversing the Oregon Court of Appeals, the Court found that the Bureau of Labor and Industries (BOLI) did not err in deciding the employer was a successor for state wage liability purposes because it conducted “essentially the same business as conducted by the predecessor,” even though it did not employ any of the predecessor’s employees. [emphasis added]
The parents of a man killed in a 3 a.m. altercation outside the Original Hot Dog Shop in Pittsburgh’s Oakland neighborhood have sued the shop’s owners, saying the failure to provide security personnel “was an outrageous, reckless and callous act, in disregard for the safety of its patrons.” [Paula Reed Ward, Pittsburgh Post-Gazette]
New 96-page paperback available from the Independent Institute. I wrote a blurb:
In clear and non-lawyerly language, Patent Trolls spells out why patent trollery is so loathed and so lucrative: its rapid rise (with lawsuits quintupling in the past three years), the havoc it’s wreaking from Silicon Valley down to your local restaurant and hotel; and the reasons it can be so hard to distinguish trolls from legitimate patent claimants. He lays out remedies worth considering.
— Walter K. Olson, Senior Fellow, Cato Institute; author, The Litigation Explosion and The Rule of Lawyers; editor, Overlawyered.com
Speaking of restaurants, the latest business to speak out about its bad experience with patent trolls is the venerable hamburger chain White Castle.