Author: Jay Gates


The National Labor Relations Board (NLRB) recently issued a new ruling that could significantly impact the restaurant industry. This article explores the multifaceted implications of this ruling on various aspects of the restaurant industry, including labor practices, employee rights, business operations and overall industry dynamics.

Enhanced employee protections

The new NLRB ruling is expected to strengthen employee protections within the restaurant industry. It may provide workers with greater rights to engage in protected concerted activities, such as discussing wages and working conditions, and organizing for collective action. This empowerment could lead to increased advocacy for fair treatment, improved working conditions and better wages among restaurant employees.

Unionization efforts

The ruling may have a substantial impact on unionization efforts within the restaurant industry. It could potentially make it easier for employees to organize and form unions, thereby increasing collective bargaining power. This increased bargaining power could result in increased wages, improved benefits and better working conditions for restaurant workers. However, it may also lead to increased labor costs for restaurant owners, particularly for smaller establishments with limited financial resources.

Increased compliance costs

The new NLRB ruling is likely to require restaurant owners to invest more resources in ensuring compliance with labor laws and regulations. This investment could involve implementing new policies and procedures, providing additional training to managers and supervisors and potentially facing increased legal costs. These compliance costs could pose challenges for smaller restaurants with limited financial resources, potentially leading to operational adjustments or increased prices for consumers.

Impact on business operations

The ruling may have implications for the day-to-day operations of restaurants. For instance, it could affect scheduling practices, as employees may have more rights to request flexible working hours or breaks.

Additionally, the ruling may impact disciplinary actions and terminations, as employers may need to demonstrate that such actions are not retaliatory in nature.

These changes could require restaurants to adapt their operational strategies and potentially increase administrative burdens.

Potential for litigation

The new NLRB ruling may lead to an increase in labor-related litigation within the restaurant industry. As employees become more aware of their rights and protections, they may be more inclined to file complaints or lawsuits against employers for unfair labor practices. These filings could result in additional legal costs and potential reputational damage for restaurants found in violation of labor laws.

It's crucial for restaurant owners to proactively ensure compliance and maintain open lines of communication with their employees to mitigate the risk of litigation.

This is an issue to keep an eye on in 2024. The NLRB decisions and rulings are always directly tied to the current presidential administration and with this being an election year it will be interesting to see how it all shakes out.
Jay Gates 2024

The new NLRB ruling has the potential to significantly impact the restaurant industry, affecting labor practices, employee rights, business operations and overall industry dynamics. While it may enhance employee protections and empower workers, it could also lead to increased compliance costs, potential labor unionization, operational adjustments, and potential litigation for restaurant owners. It is imperative for restaurant owners and managers to stay informed about the ruling, seek legal counsel if necessary, and proactively adapt their practices to ensure compliance with labor laws. By doing so, they can navigate the changing landscape and maintain a positive work environment for their employees while continuing to provide quality service to their customers.

Author Information


The information contained herein is offered as insurance Industry guidance and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client-specific risk management advice. Any description of insurance coverages is not meant to interpret specific coverages that your company may already have in place or that may be generally available. General insurance descriptions contained herein do not include complete Insurance policy definitions, terms, and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis. Insurance brokerage and related services provided by Arthur J. Gallagher Risk Management Services, LLC. (License Nos. 100292093 and/or 0D69293).

© 2024 Arthur J. Gallagher & Co. | GGBUS46011