Noe Valley Voice October 2003

Real Food Closes Amid Charges of Union-Busting

By Liz Highleyman

The abrupt late-August closure of the 24th Street branch of the Real Food Company, purchased last year by Utah-based Fresh Organics, Inc., has left many longtime Noe Valley customers scratching their heads, and a group of terminated employees crying foul.

"My jaw dropped and didn't go back up for an hour," said Duncan Street resident Georgia Schuttish, who has shopped at the store for nearly 20 years. "Real Food was part of Noe Valley, and we'd built up a relationship with the people who worked there."

According to a sign posted in the window of the now papered-over storefront, Fresh Organics--a subsidiary of vitamin and nutritional supplement manufacturer Nutraceutical Corporation--decided to "initiate a remodeling process" with the aim of "enhancing the shopping experience and improving the product mix."

But 30 employees fired en masse with no notice right before Labor Day tell a different story.

Workers Try to Unionize

"This was blatant union-busting," claimed Mission resident Lisa Fagundes, an ex-employee who helped spearhead an organizing effort at the 24th Street store.

According to Fagundes and another organizer, Adriel Ahern, workers at Real Food began meeting last May with a representative of the IWW (Industrial Workers of the World). Early this summer, union organizer Mitch Genlot was fired for being a "bad influence." Then in late July, Ahern, too, was dismissed--accused of "spreading negativity"--and Fagundes walked off the job in protest.

Aware that management had gotten wind of the organizing effort through an employee who accidentally leaked their plans, two other workers, Simon Knaphus and Jonathan Burkett, picked up the ball.

In early August, after most workers had signed union authorization cards, Knaphus and Burkett met with local store manager Conal Wilmot and two executives from the Fresh Organics parent office in Utah, Bruce Remund and marketing director Sergio Diaz.

According to Knaphus, she and Burkett "talked openly about union organizing" and presented a set of demands, among them a "living wage," more ergonomic equipment, a non-discrimination clause including gender identity, and more employee input into decisions affecting the store.

"We weren't asking for a $20-an-hour raise," said Ahern. "We were asking for respect, for consistent policies, and for a say in how the store is run. The cashiers know better what the community wants than a corporation in Utah."

The ex-employees said management agreed to meet with them in September to discuss their grievances. But instead, workers on duty Thursday, Aug. 28, were told that the store was closing, effective immediately. Other employees received phone calls that evening or the next day. Customers did not learn of the closure until they arrived to do their Labor Day weekend shopping and found the doors chained and padlocked.

Long Planned...Or Not?

Wilmot, a longtime employee who had worked at Real Food since before Fresh Organics took over, was reluctant to comment on the recent closure. "I don't know much about it myself," he said.

But Diaz denied that the shutdown had anything to do with union organizing. "I had no information about unionization plans," he said.

Diaz also said that the remodeling had been planned "for a long time." Remund did not return phone calls from the Voice.

At the request of the Voice, District 8 Supervisor Bevan Dufty asked the city's Department of Building Inspection (DBI) to do a search for outstanding permits on the property. According to William Wong, Deputy Director of Permit Services, as of mid-September, there were no active permits to do work inside the building.

In addition, claimed Fagundes, "They had done interviews to fill new grocery positions on Monday, and they had ordered extra milk and produce in anticipation of a busy three-day weekend."

"It seems like a bad way for a store to do business," Dufty commented. "If they want to make improvements, they should talk to the customers. That's only good business sense."

Store Says It Will Be Organic

According to Diaz, that's just what Fresh Organics has in mind. "It will be the same store, but we will try to add some things the community has been requesting for years, especially organic meats. It will still be a health food store, there will still be organic produce, the same selection of cheeses, and probably a better selection of bread."

Diaz added that the company would like to install an organic salad and soup bar, and possibly a back deck where customers could eat. But, he said, rumors that the 24th Street store would become a gourmet shop or a vitamin outlet are unfounded.

Asked whether closing without notice was standard practice for Fresh Organics, Diaz replied, "There is never a good way to do something like this. Whether we told customers a month, three weeks, or two weeks in advance, it would still be an inconvenience."

As for the employees, Diaz said the company gave them two weeks of severance pay in lieu of advance notice. Employees were told they could reapply for jobs when the store reopens, but were not given any guarantees they would have seniority over new hires.

Diaz declined to speculate on how long the renovations might take. "It will be a full remodeling, not a quick fix," he said. "We want to work as fast as we can, but the building is very old and full of surprises."

Other sources said they'd been told the store would be closed for a minimum of four to six months.

'That's Why People Don't Want Chains'

The promise of improvements--which many agree are sorely needed and long overdue--has not calmed the neighborhood's outrage about the way Fresh Organics handled the closure. In fact, for many Noe Valleyans, recent events have confirmed fears about large corporations taking over small businesses.

When Fresh Organics bought the 24th Street Real Food branch in March 2002--from Kimball and Jane Allen, the couple who opened the store in 1970--then-manager David Kloski attempted to allay concerns that the sale might have negative repercussions. Nutraceutical CEO Bill Gay was a champion of small businesses and did not want to change anything about the store or its involvement with the community, Kloski told the Voice. "It's an ethical company. Large, but ethical," Kloski said.

In light of the precipitous shuttering of the store, some beg to differ. "It's incomprehensible that they could be that callous," exclaimed Schuttish. "That's why people don't want chains."

Said Fagundes, "It makes me angry the way health food stores are acting. They pose themselves as different, as progressive. But they're just like Wal-Mart."

(Fresh Organics owns two other Real Food outlets, on Stanyan Street and in Sausalito, as well as Thom's Natural Foods on Geary Boulevard, but it does not own the Fillmore or Polk Street Real Food stores.)

Customers Threaten Boycott

Ex-employees and customers alike have vowed not to accept the closure and terminations without a fight.

The sacked workers have filed complaints with the National Labor Relations Board (NLRB), charging that Fresh Organics illegally fired its workers in retaliation for union organizing. "The termination of all employees with no notice, under trumped-up pretenses of remodeling, is the final step in squelching a new unionized work environment," read a hastily prepared Aug. 29 press release. Fresh Organics "would rather have a staff composed of inexperienced and low paid twenty-somethings and a high turnover rate than knowledgeable long-term employees with a living wage and a positive and empowering working environment."

And some people are talking about a boycott.

"I've been shopping there absolutely forever, but they're not going to see me again," said Clipper Street lawyer Julie Traun. "If this company thinks the neighborhood can support what they did, I think they're wrong."

"The shoddy treatment of their workers shows a real lack of integrity in my book," concurred Sanchez Street resident Stephanie Levin. "I'd rather drive across town to Rainbow instead of patronizing a store that shows so little regard for its workforce."

Pressure from Board of Supervisors

Supervisor Dufty, too, has gotten in on the act. At the Sept. 16 meeting of the San Francisco Board of Supervisors, he introduced a resolution requesting that the NLRB, DBI, and other appropriate agencies "investigate thoroughly any alleged violations that have occurred as a result of Nutraceutical's actions."

Dufty's resolution was discussed at a public hearing of the City Services Committee on Sept. 25, attended by some 20 ex-employees and neighborhood residents. One speaker, Jerry Burt, an ex-manager of the Sausalito Real Food store, went on record saying that a Fresh Organics executive told him in no uncertain terms that "anyone caught unionizing will be terminated." The company, Burt continued, had "a cowboy mentality about obeying the law."

Fresh Organics did not send a representative to the hearing, but Diaz submitted a letter in response to the resolution. The letter stated that the company did not fire "long-term" employees, and had offered six employees, with tenures ranging from two to 15 years, positions at other locations. (The company declined to respond to allegations about union-related firings, since the NLRB investigation was under way.) "[I]n our judgment, an extended, publicly announced closure process would adversely affect employee and customer morale during the closure period, thereby increasing operational risks to an unacceptable level," wrote Diaz. "[W]e feel that we handled this store closure in the best way we could."

Dufty's resolution was considered by the full Board of Supervisors on Sept. 30, after the Voice went to press.

Residents Hold a Town Hall Meeting

Meanwhile, Elizabeth Street resident Peter Gabel, a New College law professor who spearheaded this summer's campaign to save Cover to Cover bookstore, is calling on the neighborhood to mobilize against the Real Food closure.

"The conduct of Fresh Organics was disrespectful not only to the workers, but also to the community," said Gabel. "It's an out-of-state corporation making strategic judgments that do not reflect the progressive principles of this neighborhood. Noe Valley should not be at the mercy of out-of-state decision-makers acting for the sake of their own profit."

Gabel has scheduled a neighborhood Town Hall meeting for Oct. 2 at 6 p.m., at the Noe Valley Ministry on Sanchez Street, to devise a plan to engage in "constructive dialogue" with the company. At this point, Gabel wants to treat the company as if it were still "capable of redemption." "Ideally, I hope it will result in a turnaround in the way they relate to the community," he said.

Should dialogue and mediation fail, neighbors have some other ideas up their sleeves--including suggesting that a worker-owned co-op or the recently closed Mikeytom Market move into the 24th Street building, which is still owned by the Allens.

Terminated employees are working with both the IWW and the local chapter of the United Food and Commercial Workers Union (UFCW) to plan their next steps.

"We're waiting for the ex-employees to say how they want to move forward," said IWW representative Steve Ongerth. "The ideal outcome would be to get the company to rehire the workers, recognize the union, and accept workers' demands."

Bert Lysen, director of operations for the UFCW, said his group would keep a close eye on the situation as well. "The company hopes that when they reopen, people will forget about this, but I can assure you we will remind them in six months," he said. "People will vote with their dollars. It's in the best interests of the community and of the employer to hire these people back."

Noe Valley has not heard the last of the Real Food saga. "There will be flyers in the neighborhood soon," promised ex-employee Knaphus. h