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BLOG: UFCW 401 members keep Red Lobster franchise running through bankruptcy uncertainty

If you’re in west Edmonton, and have a craving for affordable seafood, you might hop in the car and head to 171 Street, where a Red Lobster franchise sits. While this building might look like every other location the chain restaurant offers, this one is different: the staff are members of the United Food and Commercial Workers (UFCW) Local 401 union.

These workers voted to join the union in 2018 and won their first contract in 2021. Another location in Burlington, Ontario joined a different UFCW local in the same year.

They are part of the Red Lobster chain of restaurants that began in Florida, U.S.A. in 1968. They started opening locations in Canada in the 1980’s. Today, it’s famed for its cheddar bay biscuits and affordable shellfish.

The chain has fallen on well-publicized hard times in recent years. Mismanagement, ill-advised promotions, and a purchase by the Thai Union corporation made the culture toxic and put Red Lobster into the U.S. bankruptcy court.

This recent ineptitude from ownership has resulted in dozens of U.S. franchises closing. Thousands of workers have lost their jobs. The remaining workers are left unsure of their future as a consequence of greed and bad decisions they had no part in.

In comparison, Canadian franchises have performed better. As a result, they haven’t been impacted by closures as much as their American counterparts.

Workers now have a new owner of the chain, Fortress Credit Corp. Among other operations, the lender frequently buys faltering companies and their assets, either reviving them or finding other ways to profit off of them. This includes several restaurant chains in the United States.

They will likely take control before the end of September 2024. At that point, they will decide the fate of the remaining franchises. They’ve said they want to operate 544 franchises, which is 34 less than the former owners said they had last May 2023.

The west Edmonton location is dutifully maintained by UFCW 401 union members. Very little has changed inside the restaurant regardless of the turmoil in their parent company.

The workers have even won gains in a new collective bargaining agreement earlier this year. Bereavement pay, wage gains for back-of-house employees, and an improved tip-pooling process were some of the wins that came with the new agreement.

However, it’s currently hard to file grievances on the members’ behalf because they have no human resource manager to meet with. The current chain owners can’t engage with UFCW 401 while they are in bankruptcy court. Nevertheless, the union still tries to resolve issues and their Labour Relations Officer (LRO) is still working with these members.

The employees do have legal representation that attends hearings and has intervenor status at the bankruptcy court through UFCW. The sole company that has made a serious offer for the chain will likely be handed the proverbial keys before the month is out.

In about a month, the fate of these Alberta workers will likely be decided. However successful they’ve been in maintaining their franchise, the malpractice of foreign owners means that they’ll be left at the mercy of a U.S. lending institution.

In the meantime, shrimp, crab, and other seafood culinary delights are still being cooked and the drinks are being poured by hard working UFCW 401 union members. There aren’t a lot of places where union members can get lunch and support their fellow unionized workers at the same time. This west Edmonton Red Lobster is a great place to do just that.