Dive Brief:
- Following backlash incited by sexual misconduct allegations, celebrity chef Mario Batali has given up his stake in 20-year-old company Batali & Bastianich Hospitality Group, which managed 16 restaurants, The New York Times reports. The group did not own the restaurants, and all of the businesses will continue to operate independently.
- Nancy Silverton and the Bastianich family — both part of the original group — will form an as-yet-unnamed company that will operate the remaining restaurants. Batali “will no longer profit from the restaurants in any way, shape or form,” Tanya Bastianich Manuali told The Times.
- Batali will also sell his minority shares of Eataly, a global chain of specialty Italian supermarkets. The grocer is in the process of acquiring Batali's minority interest in the company, a spokesperson told The Times.
Dive Insight:
The #MeToo movement has had a dramatic impact on the restaurant industry following reports of sexual harassment and assault from different celebrity chefs around the country. Fifteen restaurants associated with men accused of harassment reported a 17% decline in foot traffic in 2018, according to Eater.
For Batali & Bastianich, which at its peak operated dozens of restaurants, reservations declined along with Batali's reputation. The company eventually had to close several restaurants, including six associated with the termination of a Sands casino contract, according to the New York Times.
Sexual harassment lawsuits have been costly for restaurant outside of the fine dining realm, as well. A group of IHOP franchises settled a lawsuit for $700,000 following sexual harassment claims. Just this week, an independent restaurant in Florida agreed to pay $80,000 to settle a sexual harassment and retaliation claim related to a bartender asked to dress "sexy" and "date-ready" at work.
The restaurant industry is no stranger to political and social controversy. Papa John's founder John Schnatter's yearlong falling out, sparked by his racist comments during a call with investors, led to his resignation as CEO and eventual agreement to leave the company’s board.
But not all controversies impact brands the same way. Chick-fil-A was hit with minor backlash in 2012 when its CEO said he was against same-sex marriage. But the brand's growth has exploded in recent years — with Technomic naming it number 5 in its Top 500 Chain rankings — and is still popular among millennial consumers, according to Morning Consult. Time will tell if customers continue to hold the chain's chicken and its politics in separate spheres.
The restaurant industry will likely see more claims of harassment as the ripple effects of the #MeToo movement continue to be felt. The industry has the most sexual harassment claims filed of any industry, with 90% of women and 70% of men in the restaurant industry experiencing sexual harassment in some form while on the job, according to the Harvard Business Review.
Protecting staff from harassment will be increasingly integral in employee retention in an industry struggling with high turnover. Ignoring claims of harassment can often lead to additional stress, anxiety, burnout and quitting for staff, and incite customer rejection of a brand.
