Come again? Even restaurant worker (and ROC board member) Woong Chang has admitted that he makes more than $20 per hour as a restaurant worker when tips are included. Replacing the tip system with a salary will only make Chang’s and other restaurant employees’ paychecks smaller, while forcing the restaurants that employ them to raise prices or provide the same service to customers with fewer employees. In fact, restauranteur and ROC supporter Tom Colicchio asserted that eliminating the tipped minimum wage would increase food prices by 25-30 percent.

Going to a European-style tipping system probably makes sense for ROC, a group formed by a labor union. Generally, unions are rarely in favor of merit pay, and the practice of tipping is a very direct form of merit pay. To see how a salary system works for customers, try getting attentive service at a French cafe.

If restaurant workers don’t want to eliminate tips, which results in worse service, it begs the question: Who is ROC really looking out for?

ROC’s mob-style shakedowns of employers are no less worthy of IRS scrutiny than another organization’s actions, but somehow ROC has gotten a pass. It’s high time the IRS, which ensures that nonprofits stay in compliance with federal law, investigate ROC—perhaps following the lead of Congress, which has launched a probe related to ROC’s “history of intimidation” toward restaurants.

The Restaurant Opportunities Center (ROC) is notorious for lashing out at restaurants and demanding better pay and benefits for their employees, but has itself consistently failed to extend those same requirements to some of its own employees. Put simply, ROC abides by the “do as I say, not as I do” mantra.

We’ve been diligent in exposing the group’s hypocrisy to the media and the public, and it seems ROC is finally willing to take a (small) step back from one of its many double standards: As evidenced by a recent job post, ROC has offered to pay its interns a small stipend for each completed survey.

Of course, it’s unlikely ROC would tolerate any restaurant paying its employees by the table. And ROC’s contract-interns still receive no paid leave benefits and apparently have no pathway to move up in the organization (both complaints that ROC levels at the restaurant industry). So it’s more of a side-step than a step back, but we’re still glad to see that ROC’s embarrassment on the issue has led it to own up to its hypocrisy.

To: Congressional Staff
From: ROC Exposed
RE: Left-Leaning Non-Profit Misleads IRS and Congress

Thank you for providing our Members of Congress with valuable support and knowledgeable advice throughout the current investigation of the Internal Revenue Service. While it’s stunning that the IRS targeted conservative groups for special scrutiny in the run-up to the 2012 election, it’s equally stunning who the IRS wasn’t watching: A federally-funded labor union front group that was boasting publicly of its lobbying activities while failing to report them to the IRS’s bookkeepers.

The Restaurant Opportunities Center (ROC) has a long history of lobbying at the local, state, and federal levels—yet ROC has consistently failed to fulfill its obligation to report such activities to the IRS. That’s why earlier this month, we submitted a formal complaint to the IRS, requesting that they investigate ROC’s non-compliance with federal law.

Lobbying, in particular, is an integral part of ROC’s strategy to “organize the 99 percent of the [restaurant] industry that doesn’t have a union.” Each year, for instance, ROC hosts and boasts about its “Counter Lobby Day” where its representatives meet with Congress and lobby for its favored policy goals. This past April, ROC lobbyists met with Reps. George Miller (D-CA) and Donna Edwards (D-MD), and Senator Tom Harkin (D-IA) to push for a higher minimum wage—a proven job killer for entry-level and low-skill employees.

ROC spokespersons have also previously lobbied the federal government on behalf of the WAGES Act, and “spearheaded” mandated paid leave and minimum wage legislation at all levels of government. In Illinois, ROC lobbyists met with no fewer than 23 state senators to push for a higher minimum wage. Meanwhile, during recent mandated paid leave battles in New York and Philadelphia, ROC lobbyists were near fixtures pressing its union position before City Council.

ROC, which is legally registered as a 501(c)(3) tax-exempt non-profit charity, has failed to report any of these lobbying activities to the IRS, as required by law. As you know, the government requires that non-profits like ROC report their lobbying activities for a very specific reason: It’s a cornerstone of democratic government that the general public be aware of who’s trying to influence their elected representatives.

ROC’s evasion of the rules is even more notable in light of ROC’s receipt of taxpayer money. Since 2005, ROC has received over a million dollars in federal funding via the Department of Labor’s “Harwood Grants” program and the Centers for Disease Control and Prevention’s “Racial and Ethnic Approaches to Community Health” program.

Targeting groups for IRS scrutiny because they included the words “tea party” or “patriot” in their filings is clearly wrong, and the Obama Administration must be held accountable for it.  But where, as here, there is a demonstrated and extensive paper trail of a group doing one thing while telling the IRS the opposite, government action is warranted. In the meantime, consumers, the media, and the lawmakers who listen to ROC should take this group’s claims with a grain of salt.

I encourage you to visit my organization’s website, ROCExposed.com, to learn more about ROC’s hypocrisy, flawed research, and hidden agenda. I am available to discuss this further and to answer any questions you may have. Thank you for your time and consideration on this matter.

Sincerely,

Mike Paranzino
Communications Director
ROC Exposed
1220 L Street, Suite 100-232
Washington, DC 20005

Now ROC has another black eye: Claudia Munoz, formerly the Lead Coordinator for ROC’s Houston chapter, was recently arrested in Michigan as an undocumented immigrant.

Munoz’s story as an immigrant restaurant worker is a frequent talking point for Jayaraman, who also wrote extensively about Munoz in her recent book Behind the Kitchen Door. Jayaraman indicated that she “offered [Munoz] the job almost immediately…” upon interviewing her.

It remains unclear whether Jayaraman knew that she was hiring an immigrant who was here illegally. Either way, it’s a matter of both common sense and federal law that all employers, let alone taxpayer-funded organizations like ROC should steer clear of illegally hiring undocumented workers. This leaves the onus with ROC to clarify whether Jayaraman or others in the organization knew of Munoz’s illegal status during her employment.

Such law-breaking hypocrisy stands in stark contrast to ROC’s claims that it’s the restaurant industry that routinely breaks the law. Perhaps the U.S. House Congressional Committee, which is already investigating ROC for its “management problems” and “history of intimidation towards opponents,” should add “questionable hiring practices” to the laundry list of ROC’s legal issues.

It’s a peculiar stance for ROC to take, considering ROC co-founder Saru Jayaraman’s recent vocal opposition to the federal government’s e-Verify immigration system due to—wait for it—the high costs and burden it can cause for small business.

Unfortunately, this type of hypocrisy and deceit is par for the course for ROC. Memo to ROC and Saru: Business mandates don’t become any easier for small business to swallow just because they happen to line up with your ideological agenda.

Read more about ROC’s misrepresentation here.

The Ford Foundation would be the second foundation to sour on ROC, following the Surdna Foundation’s decision to terminate its funding of the organization after expressing a “level of disappointment” with its actions.

Jayaraman trotted out her typical false talking points about how restaurant workers “earn poverty wages.” Lacking any restaurant work experience herself, Jayaraman brought along actual restaurant worker (and ROC board member) Woong Chang to help provide some anecdotal support for her cause.

But on this interview, Chang—like ROC supporter Tom Colicchio before him—wasn’t able to stay on Saru’s faulty script.

During a discussion on the wage earned by restaurant employees, the host asked Chang how much he makes per hour. Chang replied that he earns tips on top of an $8.20 per hour wage, and the host followed up to ask how much he makes including tips. Chang, after trying to dodge the question and fumbling over his answer, reluctantly admitted that he actually earns more than $20 per hour.

Of course, contrary to ROC’s claims about “poverty wages,” it’s not uncommon in the restaurant industry for tipped workers to earn an hourly wage of this magnitude. So it’s a treat to hear a bit of honesty from a member of ROC—a group that’s infamous for its hypocrisy and tall tales—even if the honesty is unintentional.

Does this hypocrisy sound familiar? It should: The Restaurant Opportunities Center (ROC) does the same thing, demanding that businesses provide paid leave and unreasonable entry wages while relying on unpaid interns to do their bidding.

The hypocrisy at IWPR and ROC is not without precedent: The infamous (and now-defunct) Association of Community Organizers for Reform Now (ACORN) lobbied for a “living wage” but sued the state of California because the group believed it should be exempted from paying its own employees the minimum wage.

ROC Exposed has also sent a formal complaint to the IRS requesting that it investigate ROC’s lobbying activities and failure to report them.

ROC is a labor union front group disguised as a restaurant industry employment center and watchdog. ROC’s tactics include mob-style shakedowns, often employing intimidation and harassment in an effort to force restaurants into submission.

The information in this new report from ROC Exposed is particularly relevant in light of ROC’s receipt of federal grant money from the Department of Labor and the Centers for Disease Control and Prevention, as well as an investigation by the House of Representatives of ROC for its “history of intimidation” towards opponents.

Mike Paranzino, communications director for ROC Exposed, released the following statement:

“The Restaurant Opportunities Center has blatantly violated federal reporting requirements for lobbying activities in its pursuit of more and more anti-business mandates.”

“Each year, ROC hosts a ‘Counter Lobby Day’ in D.C., where ROC staffers and members fly in from around the country to meet with Congress and lobby for the group’s preferred policies. ROC spokespersons have also previously lobbied the federal government on behalf of the WAGES Act, and ‘spearheaded’ paid sick leave and minimum wage legislation at all levels of government.”

“They have done all of this while reporting to the IRS that they do not lobby. This means that the organization is in violation of IRS reporting rules as a nonprofit ‘Public Charity.’ For a group that regularly lectures small business owners on compliance with federal laws, ROC’s decision to ignore federal reporting requirements is nothing short of hypocrisy.”