Bad press from avoiding Obamacare hurt Olive Garden and Red Lobster's earnings
Papa John's isn't the only restaurant chain taking a hit because of its attempts to avoid providing health coverage to workers as Obamacare takes effect. Darden Restaurants—the parent company of Olive Garden, Red Lobster, Longhorn Steakhouse, and more—is announcing lower earnings expectations stemming in part from its anti-health care stance:
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Our outlook for the year also reflects the potential impact, though difficult to measure, of recent negative media coverage that focused on Darden within the full-service segment and how we might accommodate healthcare reform."
"Beyond promotional adjustments, we have been working more comprehensively within specific brands and across the Company to enhance our core menus, service delivery, building design and advertising and we are confident these improvements will enable us to respond successfully to important long-term consumer shifts," added Mr. Otis. "We are also committed to accommodating healthcare reform in ways that work for our employees and guests."
Darden engaged in less public posturing than some restaurant executives and owners, but had started testing a plan to keep workers below the 30 hours of work that would make them eligible for employer-provided health coverage. Not that many Darden workers get that many hours a week, anyway—75 percent of hourly workers were below 30 hours a week to begin with. Darden had been moving in other ways to sharply cut labor costs, slashing pay for bartenders and eliminating other jobs. Not all of Darden's cuts are legal, either—in recent years, the chain has paid nearly $14 million in fines and settlements for wage theft.
http://www.dailykos.com/story/2012/12/05/1167390/-Bad-press-from-avoiding-Obamacare-hurt-Olive-Garden-and-Red-Lobster-s-earnings
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