How Co-Op Restaurants, a More Ethical Business Model, Put Workers First

The only ethical restaurant I have ever heard of is on Star Trek: Deep Space Nine. I have never watched the show, but my partner has excitedly explained this particular vision of utopia to me at least three times. The restaurant is named Sisko’s Creole Kitchen and exists in New Orleans in the 24th century, on an Earth that has abolished prejudice, money, and hunger. Though you could press a button and conjure any ingredient, the aforementioned Sisko still finds a desire to provide hospitality, so every night he cooks gumbo and jambalaya and presumably gives it away for free, just because he wants to.

We have not figured out how to replicate matter, nor have we abolished money, so even in our most progressive and sustainable restaurants, the food has to come from somewhere and must be paid for by someone. But we all know the restaurant world has more immediate problems than the lack of a Star Trek society. Building an equitable restaurant, a place where all workers are paid fairly, have benefits, and can work in an anti-discriminatory environment, is going to take a near-undoing of the way most restaurants are run.

Currently, most restaurants, whether they are high-end or hole-in-the-wall, family-owned or corporate-run, operate in much the same way. There is an owner, or owners, who either own the property the restaurant is on or lease it from a landlord. Sometimes the chef is also the owner, or sometimes they are hired by the owner. In the kitchen, there is a hierarchy. It may not always look like the traditional French brigade system, with its focus on militaristic efficiency, but the chef manages, and makes more money than, the line cooks. In the back of the house, dishwashers, bussers, and cooks are often paid the minimum wage, while in the front of the house, in most U.S. states, servers and bartenders are paid lower wages with the expectation that customers will make up the difference in tips. Many states permit employees to be fired at will. And the lower down the line you are, the less likely it is you’ll be making decisions about how your workplace functions.

It’s not glib to say that eradicating capitalism is the surest way to build equitable restaurants. Living in a country that provided universal health care, federally mandated paid child leave and sick leave, and a living minimum wage, as well as incentivized sustainable farming, encouraged unions, and got rid of at-will employment, would go a long way toward creating environments within restaurants (and all businesses) where workers had power over their own livelihood.

But that is a tall order for restaurants to take on alone, so barring revolution (though fingers crossed), upending everything we assume about how restaurants are run is the necessary step toward an actually ethical restaurant industry. Other options already exist — nonprofits, workers collectives, unions, volunteer-run restaurants — that create models for a fairer and more just workplace. But what does it even mean to be an equitable restaurant? And can simply changing the ownership structure provide that?


Kirk Vartan, co-owner of A Slice of New York pizzerias in the Bay Area, understands that phrases like “collectively owned” or “workers cooperative” can inspire panic and confusion. It’s like, what, everyone has to vote every time you place a produce order? Is it going to lead to the drama of the Park Slope Food Coop deciding whether or not to carry Israeli products? “People think that it’s hippies, and everyone’s going to smoke weed, and sit around in a circle and just love and peace, and whatever,” he tells Eater. “And the reality is, this is a very real business model.”

Vartan actually took inspiration from, of all places, the corporate world. While working for NBC, he was given stock options. “It’s not a lot of stock. It’s like this little itty-bitty micro-bit of the company. But it changes your attitude when you actually own part of it,” he says. After leaving to start a New York-style pizza shop in San Jose, he was determined to create a similar business structure. He says his employee-owned model was at first discouraged by a corporate attorney, who said it wouldn’t work for a restaurant. But Vartan continued to bring it up with employees, and eventually worked with Project Equity, an organization that advocates for and consults with companies to pivot to employee-owned models, to become a worker cooperative.

A Slice of New York allows employees to become co-owners after they’ve spent at least a year at the company; as of now, about 45 percent of the employees are co-owners. Operationally, the model doesn’t change much. There are shift managers who make the immediate calls about who does what day-to-day, and Vartan remains the general manager. The restaurant’s governance is what’s really affected: Every co-owner has an equal share of the business and a vote on a board. Board members all have an equal say in decisions about benefits, safety procedures, menu changes, and issues dealing with the general financial wellbeing of the company. “In a traditional ownership model, whatever is not spent on people goes to an individual,” Vartan says. Instead, in a cooperative, members decide how to spend, save, or split profits, “so there’s no incentive to try and not take care of the people immediately.”

Vartan credits the co-op model with helping A Slice of New York both stay in business and keep employees safe during the COVID-19 pandemic. The worker-owners voted to mandate masks and social distancing policies weeks before the state did, and to do away with slices, even though they were a huge part of the business, because they’d be harder to serve safely. “We did that not because we were trying to maximize our profit. We did that because we were trying to maximize the safety of our team,” says Vartan. “People are seeing and making decisions, not just [thinking] ‘I want this.’ It’s, ‘How are we taking care of each other? How are we taking care of the business?’ And that mindset is why this is the right model going forward.”

There is no one way to be a co-op. Owners can decide how long employees must be at the company before they’re eligible to become a co-owner, how much it costs to buy in, how much of the profits to split, and how much to save for a rainy day. But the ability for those questions to be a conversation, and not a top-down mandate, is enticing. The model “increases the likelihood that the business will stay locally owned and operated, gives workers a greater equity and turns what might otherwise be a low-paying blue-collar job into a more rewarding career,” writes Melissa Lang in the San Francisco Chronicle.

Cara Dudzic, co-owner of the cooperational Charmington’s cafe in Baltimore, says the restaurant’s worker-owned setup means employees often stay for years in an industry where the standard is months, and they have the opportunity to buy into health care benefits, something most restaurant jobs don’t offer. “What we can’t do in wages, we try to make up for in being a basically decent and respectful place to work.”

No matter how kindly run and community-focused a restaurant’s structure is, wages are often the sticking point. After all, it’s a job; getting paid is the goal. And as much as co-op or nonprofit structures help with the overall work culture, they do not solve the problem so many restaurants face: It costs money to pay people a living wage. The industry typically relies on tipped wages for servers, which allows restaurant owners to pass the burden of ensuring servers make a living wage onto customers. Everyone admits it’s a bad (and racist) system. But doing away with tipping has proven to be a hard sell for customers and workers alike. Danny Meyer, whose Union Square Hospitality Group restaurants famously ended tipping, initially faced customer sticker shock, and staff leaving because they could make more with tips than on an hourly wage. The group reinstated tipping this June.

Vartan says employees at A Slice of New York start at $16.50 an hour, $4.50 above California’s minimum wage (and almost a dollar over San Francisco’s), because, since no one owner is trying to make a profit above anyone else, wages can be lifted across the board. And employees there can still accept tips. But becoming a member of a cooperative does require buying into a long-term plan, in an industry that has by design courted short-term commitment; giving up a portion of one’s wages to be part of a worker-owned collective, or forgoing $300 a night in tips so everyone can make $15 an hour, is not as enticing if you’re not planning on being there long. Even for longer-term employees, given the relentless nature of the work, it’s hard to give up the “every man for himself” mentality, especially during an unprecedented recession.

Charmington’s began with 11 partners in 2010, and is now down to just three. “Some people hired as regular staff did want buy-in, and did by accepting a few hours of compensation as shares rather than wages every pay period,” Dudzic says. But other staff didn’t want to forgo wages, didn’t plan on staying in food service that long, or just didn’t have the time or energy for the “fairly stressful early meetings and email chains” that being a co-owner of a restaurant entail. “The main thing that gets in the way of providing everything we want is income,” she says, noting that the opening of a food hall a few blocks away in 2016 has continued to cut into their lunch business. Sales being what they are, Charmington’s base wage is the Maryland minimum wage of $11 an hour. The reality is, even though Charmington’s is paying as much as it can while ensuring it can stay afloat, workers could probably make more elsewhere.

Wage equity is part of a larger conversation among the industry as a whole about creating a better future for restaurants: Regardless of what the rest of the business model looks like, it’s something that, should the owners desire, can be solved almost immediately. “American society or business schools say it’s profits over everything, but we’re always saying that it’s community over profits,” says Yajaira Saavedra, co-owner of La Morada in the Bronx. To that end, every employee of the restaurant — regardless of their role — receives the same wage. For a long time, that wage was $17 an hour, but this summer, it was boosted to $20 with a grant from the city.

La Morada, it should be noted, is not a co-op — it’s owned by a family of undocumented people, and has made a name for itself as not just a restaurant, but a community center and haven for immigrants and other undocumented people. Saavedra says that prioritizing fair wages and treatment has led to high retention rates among workers and a loyal following in the community, which is more important to Saavedra than taking home a bigger cut of the profits. “Even if we [close], we want to make sure that the community is stable, and we have fought for the better,” she says. “And we left it in a better standing than when we were there.”


In his book The Third Plate: Field Notes on the Future of Food, Dan Barber, an owner of Blue Hill Farm and the longtime chef at its two associated restaurants, quotes naturalist John Muir: “When we try to pick out anything by itself, we find it hitched to everything else in the Universe.” Which is to say, when it comes to restaurants, it’s hard to change one thing unless you’re changing everything.

“The organic movement was about an organism, why everything is connected,” Barber says in an interview. “It got dumbed down into, do you use pesticides or not? But really, the origins of the organic movement were about the community which produced your food, the community that got the food to you, and the community that was cooking the food and enjoying it together.” It isn’t organic unless the humans involved aren’t being exploited. It doesn’t matter if your steak was grass-fed if the person who butchered it can’t afford rent.

The ethics of Blue Hill come at a price — a socially distanced picnic at the fine dining Blue Hill at Stone Barns currently costs $195 a person. In any restaurant, Barber explains, “it’s rent, food costs, employee/insurance costs,” and while there may be wiggle room, a lot of those costs are set. “When I talk about buying ingredients that are treating the environment right, rightfully so, a lot of chefs are like, ‘Well, I would love to do that, but I literally don’t have room in the budget to be doing that like Blue Hill does.’” (Weeks after we spoke, Barber announced that he plans to step away from chef duties, and pivot both Stone Barns and the NYC location of Blue Hill to a chef-in-residence program that he hopes will help combat “racial and gender inequities” in the industry, something he and Blue Hill have been criticized for perpetuating, most recently by chef Preeti Mistry).

Of course, not every meal can realistically be $195 per person. The cost of providing every employee with a living wage and benefits — not to mention paying rent and insurance, and serving a good product affordable enough for most people — is nearly impossible with the way restaurants, co-op or not, must run. Vartan says about 45 percent of A Slice of New York’s costs are labor costs, which he describes as one of a restaurant’s three knobs; the other two are quality of food and pricing. “We’re not changing our quality, and we’re not going to screw our people. So the only knob left to turn is pricing,” he says. Yet, he’s gotten complaints that his pizza is more expensive than a pie you could get at Pizza Hut. No matter how much better his product, or better-treated his employees, some customers aren’t willing to, or flat out can’t, afford it.

The problem of “good” food being prohibitively expensive can’t be completely solved by restaurateurs turning those knobs. Depressed wages and inflation are problems for everyone, not just restaurant workers. And if it isn’t going to be addressed by an increased minimum wage, it has to come from customers rethinking their own priorities where able. Which many of them are doing.

The COVID moment has perhaps opened some diners’ eyes to just how precarious things have been for food-service workers. In the short term, consumers are stepping up and filling gaps by donating to GoFundMes, buying gift cards, or just tipping well. Elsewhere, mutual aid efforts aimed to address the widespread hunger caused by the pandemic and the recession have inspired many to think critically about what role restaurants should play in that aid. During the pandemic, La Morada has served 1,000 free hot meals a day, and used its longstanding relationships with local farmers to help solve the problems of food waste and hunger. “Small farmers, organizations we have those relationships with … now trust us to actually do the mutual aid work and have volunteered either their time or their produce,” Saavedra says.

For many diners, the value of eating out is now not just about the immediate experience, but everything, including the people, that make it what it is. It’s always been that way to a certain extent — the way that $195 Blue Hill meal is worth it not just because the food tastes good, but the knowledge that it was grown thoughtfully, cooked by experts, and served to you in a perfect pastoral setting. Now, “value” can include not just customer experience, but the knowledge that employee well-being is part of the plan.

What the pandemic has strengthened, and what anyone who has ever felt the comfort of having a local knows, is the idea of a restaurant as a community. The risk of losing the coffee shop where you read the paper every Saturday, or your favorite date spot, or the bar where the bartenders always give you a shot for the road, has galvanized people within the restaurant industry to think through what a better future looks like, and those outside of it to care as much about the people working at the restaurant as the restaurant itself. “Once you are attuned and aware of it, it becomes part of the fabric of the culture,” says Barber. “It doesn’t go back.”

It is with that momentum that models like workers collectives, mutual aid, and legislation advocacy can thrive. As food-service businesses have been struggling through the pandemic, “worker co-op models are being pitched to municipalities, on the basis of maintaining wealth and equity for oppressed communities,” says Jeff Noven, executive director of the nonprofit grocery store Berkeley Student Food Collective. The student food collective is a cooperative success story, but its unique place within the university community means many of its methods are not replicable. Most obviously it operates without the burden of labor costs: Noven is the only full-time employee, with his and four part-time employees’ salaries subsidized by grants. Most of the labor comes from 150 volunteers, who elect the board from within that membership. That can’t be the path forward for the vast majority of restaurants.

There’s also the issue that many groups doing the work might not be eligible for government aid or alternative business models. For La Morada, applying to be a co-op or a nonprofit requires citizenship paperwork they don’t have, and while according to Harvard Law School, federal law doesn’t “expressly prohibit undocumented immigrants from working for a business that they own,” the laws are also pretty unsettled. Saavedra says they also had issues converting to a soup kitchen, as they couldn’t apply for 501(c)(3) status. But that hasn’t stopped La Morada from its commitment to mutual aid. “We still have all the same values,” says Saavedra. “You don’t necessarily need [to be] a co-op or a not-for-profit tax. You carry ethical work.”

Instead, there are other ways for businesses to adopt parts of the co-op model, or other equitable models, that work for them, and those actions are already in progress. The unionization push throughout restaurants and grocery stores continues to advocate for better working conditions, especially as many were deemed “essential workers” as lockdowns began in March. Restaurants continue to do away with tipping, and to incorporate mutual aid into their business models. But everything restaurants can do on their own is a few drops in a bucket compared to what government support in the form of things like universal health care, or real aid for small businesses, could achieve. Vartan is working with local legislators to incentivize businesses to organize as workers collectives, and noted the 2018 Main Street Employees Ownership Act as a step toward federal support. And restaurant workers continue to push and protest for things like a fair minimum wage, federally mandated sick leave, and support for independent restaurants struggling during the pandemic.

Prioritizing community over capitalism has always been an option. But now, more people than ever have a desire to seek out food made in equitable spaces, to learn about the inner workings of their favorite restaurants and see how they can best support them, or just leave a 30 percent tip because they know times are tough. That won’t go away once we have a vaccine.

Sustained change will take a greater understanding of what “equity” means, and what it will require from both restaurants and customers. As bad as the pandemic has been, it has put us in a great position to do that sort of reevaluation, and reimagine a restaurant as a place where success doesn’t mean profit, but rather that the whole community, farm-to-table, is cared for. And to maybe even fight for a day when it won’t be the responsibility of restaurants to solve these problems at all.

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