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Applebee's, Papa John’s & Darden Restaurants threaten staff cuts under Obamacare

Applebees, Papa John’s and Darden Restaurants lash out at employees over Obamacare
Applebees, Papa John’s and Darden Restaurants lash out at employees over Obamacare
Scott Olson/Getty Images

We've all heard the old adage, “All publicity is good publicity.” However, recent events have taken bad public relations to a whole other level. Applebee's and Papa John’s restaurants threatened to freeze and reduce worker's hours in response to the Affordable Care Act (Obamacare). These are not the only two restaurants coming out publicly, Darden Restaurants is now joining the mix.

Papa John’s

John Schnatter, CEO at Papa John’s stated that in the result of President Obama’s reelection, he would most likely begin reducing employees’ hours. Back in August, we saw Schnatter make headlines telling shareholders about increasing prices by $0.11 and $0.14 per pizza because of Obamacare. Schnatter said to Politico, “We're not supportive of Obamacare, like most businesses in our industry.”

Even with Papa John’s strong sales in the last quarter, and the potential for 1,500 new retail locations, Schnatter still intends to pass any costs to his customers and employees, while blaming Obamacare for these decisions.

Applebee’s

On Thursday, Zane Tankel, chairperson and CEO of Apple-Metro (a New York area franchisee) told Fox Business that it would cost millions of dollars across their system. Therefore, they won’t build more restaurants or hire more people. Tankel did not officially say he would lay off any current employees, however, he did imply these were distinct possibilities.

In addition to these two chains, Darden Restaurants said they would begin to increase part-time workers in order to go around this law. Darden owns the following restaurants:

  • Red Lobster
  • Olive Garden
  • LongHorn Steakhouse
  • Bahama Breeze
  • Seasons 52
  • The Capital Grille
  • Eddie V's
  • Yard House

It is unclear if these two high-powered CEOs and major restaurant chains have made their statements public to either express a financial fear or tarnish the reputation of Obamacare. However, at this point the law is the law. The election is over, and if there is a political motive, this is not going to change anything but create hardships on their employees. John Arensmeyer, CEO and founder of Small Business Majority, a national small business advocacy organization stated most small businesses with 50 or more full-time employees offer health insurance already.

However, most restaurant chains do not. Arensmeyer went onto say it best, “We think it's time for all businesses to come together and figure out how to make this work.” As for public relations, this is already causing a major backlash. Yesterday, we saw Twitter users responding negative to the news. Back in August, Rachel Caine spoke out on Twitter saying,

“You know what, @PapaJohns ... I'd LOVE to pay 20 cents more for pizza so that someone else could get decent health insurance.”

Today, there was a petition that was created on Change.org called Papa Johns, Applebees, Red Lobster and Olive Garden: Stop firing employees, raising prices & cutting hours.

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