There Are So Many Uncontrollables That Can Implode A Restaurant— This Isn’t One of Them

inappropriate behavior

Sexual harassment: it can cost you everything

Everyone is watching a paradigm shift in society where women are stepping forward after years of abuse and saying they have had enough.  Almost everyday another announcement is made that some powerful man has pushed unwanted advances or worse on women they believe they can dominate. The most visible claims involve famous celebrities, politicians and now even our industry’s own Chef Mario Batali. We shouldn’t be surprised as the foodservice industry is amongst the worst violators.

David Sederholt finance taxes restaurant
David Sederholt

The dirty truth is that inappropriate behavior has riddled the restaurant industry for many years. There have been many explanations but the roots may lie with the fact that most privately owned restaurants are unstructured, less than “corporate” in their management and because of it the inappropriate behavior has been allowed to continue unchecked.

I know that my column in Total Food Service is supposed to be focused on finance and it is. Let me make this easy for everyone – if you as an owner, manager, supervisor or chef allow inappropriate behavior or harassment to happen in the workplace, IT COULD COST YOU EVERYTHING! Wake up! If you don’t address the problem head on, you could lose your business, livelihood, your job, your family and much more.

In the 30+ years I spent in the restaurant business I realize that many establishments take on a rough and tumble personality. Anthony Bourdain, in his blistering memoir Kitchen Confidential, wrote a colorful and shocking account about the “underbelly” of the restaurant business complete with profiles of many of his dysfunctional crew.  We all know the story, people work long hard hours and often play hard as well. Bad behavior can start with sophomoric jokes and off color remarks then can degrade from there to a perverse hunting ground for sex and more.  Professionalism can go right out the door and because of the close confines of the work environment, many people will become uncomfortable or threatened while at work.

Sexual harassment is not limited to unwanted advances or inappropriate physical contact. Violations include off color remarks, dirty jokes, inconsiderate actions, violation of privacy and management inconsistency based upon the attractiveness of the employee.  Anything that is discriminatory or makes a person (women or men) feel uncomfortable or threatened in their workplace can be considered harassment or a hostile work environment. And a lot of that happens in our business.

Women’s Foodservice Forum February 2019 728×90

According to a 2014 study issued by the Restaurant Opportunity Center, a mind boggling 90% of women in the foodservice industry reported being subject to unwanted sexual advances at work! Do you realize how big that number is?  Approximately 10% of the entire U.S. workforce is employed in the restaurant industry and women outnumber men 2 to 1. So let that sink in for a moment.

The majority of these women are servers, bus persons, bartenders and hosts who regularly have to deal with comments and unwanted sexual advances from customers and co-workers alike.  These people rely heavily on tips from patrons who regularly hit on them and wield economic power over them by withholding tips if they don’t play along. That is despicable enough, but when these same servers are subjected to comments and sexually charged encounters with line cooks, dishwashers and worst of all from managers and owners – it makes me wonder how they come to work everyday. It is clear that many of these women tolerate it just to keep their jobs.

More than 15 years ago, as a restaurant owner I had to terminate a number of managers for inappropriate conduct.  A couple of these managers had affairs with servers, which was absolutely forbidden in our company policies. As expected the server in question received better schedules, better stations, lighter side work and other benefits. This didn’t go unnoticed by co-workers and we found out only when reported by these disgruntled employees.  Despite our zero tolerance policies there were a number of lawsuits filed against the company due to the actions of employees and managers.  Even though we had written policies and procedures, employee manuals and extensive training programs for our employees and management – it happened a number of times over 10 years and it cost us thousands of dollars in legal fees and settlements. Can you imagine what it will be like in today’s #MeToo environment?

How did the restaurant industry get this way?  It’s complicated, but when you have people working together 10 – 12 hours a day, sometimes 6 days a week and very often at night, these employees often formed relationships (good and bad) because they practically lived together.  The more contact and the greater familiarity coupled with a stress filled contained environment led to possible problems. It was not uncommon for employees to mouth off, joke, curse, squabble and make crude comments.  They worked hard and played even harder – very often together. We thought it was “kids behaving like kids” but didn’t see the seamier side. This could help explain why the EEOC has reported that 15% of ALL sexual harassment complaints come from employees in the restaurant industry.  Even the former President of the National Restaurant Association, Herman Cain fell to allegations from at least three women that he had abused and harassed them.

Our industry learned early on that “sex sells”. Back in 2009, Professor Michael Lynn of Cornell University, School of Hospitality Management published a formal study that confirmed an ugly truth about our society and how the restaurant industry became one of the top offenders for sexual harassment with its employees. Prof. Lynn’s study reported that waitresses with blonde hair, slim waists and larger breasts received higher tips than waitresses without those traits, regardless of experience.  Managers looking to drive sales and perhaps make excuses for creating their own “target rich environment” hired based on looks.  We’ve all seen it – women bartenders with push-up bras, low cut blouses or hostesses in revealing dresses and high heals greeting businessmen at upscale steak houses. Is there anything wrong with this? That’s for you to decide but be prepared to face reality -if management is requiring an employee to dress provocatively for their job – this could be considered sexual harassment.

So don’t be fooled into thinking that the only sexual predators to fall will be politicians and show biz moguls. No other industry rivals Hollywood in exploiting women’s attributes for profit more than the restaurant business. Harvey Weinstein and Mario Batali have a great deal in common as high profile powerful figures in their respective fields.  They abused their power and influence over women and the same is true in restaurants all over America. With the wave of fed up women building daily, you can expect thousands of accusations to surface in hundreds of restaurants nationwide. As an industry we need to commit to fix this.

The best place to start looking for possible problems is by scrutinizing yourself.  As an owner or manager you set the tone for your establishment. If you were insensitive or unaware enough to make sexist off color lewd remarks or make aggressive behavior part of your daily work life you better stop. This is not only unacceptable it’s just plain stupid. Even my dogs know that you don’t shit where you eat!

Unfortunately, as with any backlash, things can go too far. The possibility of false accusations being made to get back at managers or owners is a real possibility.  Someone who is absolutely innocent can find themselves on the wrong side of an accusation. The best defense for this is to insure your behavior is flawless and to be very cautious in what you say and do.  You need to show everyone that your character is beyond reproach and that you do not tolerate this inappropriate behavior. If you have conducted yourself and your business properly, you can muster character witnesses because you may have to defend yourself legally.

Regardless if you’ve had any reported incidents at your restaurant, you need to consider having mandatory organized training sessions on behavior in the workplace.  There are affordable online services that provide these courses and require employees to be tested and certified.  DO IT! You need to have WRITTEN policies and procedures that all employees must read and sign that they fully understand your zero tolerance policy for inappropriate behavior. Then most importantly you need to provide a clear system for employees to report violations without fear of retaliation or pressure and act on every single complaint.

If you have any questions or just want to discuss your business, please contact me at

David Sederholt
David Sederholt is a multi-discipline entrepreneur who has launched and built numerous companies in specialty finance, foodservice and commercial real estate over 40 years. After owning, financing and operating over a dozen restaurants in his career he found a niche in serving small businesses seeking financing and strategic advice. For 10 years he served as Chief Operating Office of Strategic Funding Source, Inc., (now called Kapitus). David has also been a Managing Partner at a boutique investment bank and a specialty commercial real estate firm. He is a regular guest lecturer and contributor to business and industry publications as well as serving as a Board member and advisor to numerous companies and non-profit organizations. He is currently owner of Ragnar Partners, LLC, a private investment and advisory firm.