How New York’s Bagel Union Fought — and Beat — a Mafia Takeover

The mob saw an opportunity. Local 338 had other ideas.

A New York bagel baker in the 1940s. Photo: Weegee(Arthur Fellig)/International Center of Photography/Getty Images
A New York bagel baker in the 1940s. Photo: Weegee(Arthur Fellig)/International Center of Photography/Getty Images
A New York bagel baker in the 1940s. Photo: Weegee(Arthur Fellig)/International Center of Photography/Getty Images

This article was featured in One Great StoryNew York’s reading recommendation newsletter. Sign up here to get it nightly.

In 1944, on the Lower East Side of Manhattan, some enterprising thief stole a truckload of more than 1,500 bagels slated for delivery from Fisher’s Bakery on Norfolk Street. It was a newsworthy event, and local papers covered it duly — especially the primary mystery confronting policemen on the scene. At question, reported the Associated Press: “They wanted to know what a bagel was.”

Even into the modern era, the presence of bagels in America was largely confined to Jewish enclaves, predominantly in New York City, the old-world bread still sufficiently exotic that every mention of it in the New York Times (usually brief items concerning labor issues) assumed no previous knowledge on the part of readers. “A bagel,” the newspaper of record explained in 1960, “is an unsweetened doughnut with rigor mortis.”

Despite a decidedly limited reach through the first half of last century, demand kept dozens of bakeries in business throughout Manhattan and the eastern boroughs. They were miserable places to work, located in the basements of apartment houses and other large buildings with coal-fired furnaces that could be converted into ovens. Ambient temperatures in those rooms reached 120 degrees, with bakers frequently stripping down to their underwear, even in the dead of winter, while furiously sidestepping infestations of roaches and rats. “There appears to be no other industry, not even the making of clothes in sweatshops, which is carried on amid so much dirt and filth,” reported the state of New York in one of several scathing industry safety reviews. It was not uncommon for poor tradesmen to ply temporary homes in the corners of these rooms, sleeping on empty flour sacks in the handful of hours between shifts. So dire were conditions that they even inspired a Yiddish curse: Lig in der erd un bak beygl. “Lay in the ground and bake bagels.” (Alternatively translated: “Go to hell and bake bagels.”)

The excessive hours mandated in such environments were so brutal that in the late 1920s, bagel bakers, primarily immigrants from Eastern Europe, banded together in protest. The result — Union Local 338, under the umbrella of the Bakery and Confectionery Workers (B&C) International — offered a measure of professional leverage. Beginning in the 1930s, if one wanted to run a bagel shop in Manhattan, one had no choice but to employ union bakers. They were, after all, virtually the only men in town capable of making a proper bagel, not to mention exceedingly judicious when it came to imparting their wisdom. So comprehensive was this mandate that bakery owners were prohibited from manning their own ovens at the risk of costly and relentless picket lines outside their shops. (Picketing was the official response to virtually all major labor disputes. The union prevailed every time.)

Union Local 338 never grew much past 300 bakers, but the power it held was enduring. Membership was intentionally exclusive, based on the lineage-driven, old-world tradition of passing down a generationally honed craft from father to son. On this basis, acceptance was limited to the sons of existing 338 members (with the rare son-in-law and occasional nephew sliding quietly under the rope), a structure that retained an exclusively Jewish identity. Until American-born offspring began to turn over No. 338’s roster in the 1950s, the local communicated primarily in Yiddish, its correspondence and record-keeping entirely indecipherable to outsiders. The newspaper of record, the one read by bakers during their breaks, was the Yiddish-language daily Forverts — the Forward — which today publishes online in both English and Yiddish.

Under the union, bakers’ hours were soon strictly controlled, with wages rising to match those of high-end plumbers and electricians, plus paid vacations, life insurance, and pension plans. With a direct line between union members and their fathers who worked the benches before them, it was impossible to take such gains for granted. It also made concessions nearly impossible when it came to negotiating contracts.

Ultimately, it barely mattered to shop owners. In a thriving industry that by the mid-1960s was pumping out more than 2 million bagels per week to a market only just beginning to reach beyond New York City, they could afford it. With their industry grossing some $20 million per year, these men purchased homes on Long Island, drove fancy cars, and sent their children to prestigious colleges. It was a copacetic ecosystem, working out favorably for all involved.

Naturally, the Mafia wanted in.

By the time Johnny Dio — given name: Giovanni Ignazio Dioguardi — got involved with Manhattan’s bagel industry, he was 50 years old and, in the words of United States Attorney General Robert Kennedy, a “master labor racketeer.”

A capo in the Lucchese crime family, Dioguardi had already made a fortune skimming off the top (and frequently the middle) of fraudulent New York labor unions he’d formed for that very purpose. (Dio’s paper unions — bearing full voting rights despite no membership to speak of — were instrumental in electing his pal Jimmy Hoffa to the national presidency of the International Brotherhood of Teamsters in 1957.) In 1963, Dioguardi — having just served three years of a four-year mob-related prison sentence for tax evasion — proclaimed himself a changed man. He portrayed the work he’d lined up upon his release, for a company called Consumer Kosher Provisions, Inc., as legitimate. He was a hardworking frankfurter salesman, he said, who left his home in Point Lookout at 4 o’clock each morning and drove some three hours to Sullivan County to make sales calls.

The business was aboveboard, but Dio’s description omitted significant details. Consumer was one of two kosher-products companies vying for supremacy in New York. Its rival, American Kosher Provisions, Inc., had recently raised industry eyebrows by employing a gangster named Max Block, whose Mafia connections provided him extraordinary sway with supermarket buyers, who were subsequently strong-armed into favoring American’s products over Consumer’s. Consumer owner Herman Rose was baffled about how to respond.

Enter Dio, who convinced Rose that the path to profits involved fighting fire with fire, namely bringing his own mob muscle — Dio himself — onboard. There was something to this. With the Teamsters in his pocket, Dio’s threats of labor discord were all too real, and grocers paid ready attention. The kosher tide quickly turned.

Dio accelerated the process after Rose died unexpectedly in 1964. Utilizing a dormant corporation that Rose had set up in the Bronx called First National Kosher Provisions, he transferred all of Consumer’s assets into it, then listed himself as the company’s primary officer, boosting his own salary from $250 per week to $250,000 per year in the process. Dio leaned on supermarket buyers across New York with threats, getting them to sell what were frequently substandard First National products while writing into the contract a refusal to accept returns. (At about this point, reports of green, sweaty meat under Dio’s new label began cropping up with regularity.)

Pertinently, the mob now had significant say in (and the ability to skim from) Manhattan’s two top kosher-meat companies, resulting in a spike in consumer prices. New Yorkers whose diet relied on these products were beside themselves.

Not content with his newfound riches, Dio forced a merger with American Kosher and set about distributing the assets of both outfits into a host of smaller companies he created for just this purpose, which were themselves acquired by a larger sham company. (Newspapers of the time called the organization “the Kosher Nostra.”) Bills went unpaid while Dio and his cronies suctioned as much money as they could, as quickly as possible, content to let the business burn. It was enough to get Dioguardi indicted for bankruptcy fraud, for which he was sentenced to five more years in prison. His attorneys, however, delayed the proceedings for nearly four years, time enough for him to shift his parasitic sights to another local Jewish industry: bagels.

In 1966, a man named Ben Willner started the W&S Baking Corporation in the Bronx. Not only was he determined to run a nonunion bagel shop, but he was among the first to embrace what would, over time, become 338’s most pressing issue: automation. Mechanical bagel rollers had come onto the scene in the 1950s, but early iterations were bulky and slow, and the bagels they produced were frequently ill-formed. The dough was too thick to extrude properly, and constantly clogged the gears. Daniel Thompson, a Canadian son and grandson of bagel bakers, fixed these flaws. With one of Thompson’s machines in his shop, Willner began pumping out more bagels in a shorter time with one unskilled worker than a traditional shop using a union-approved team of four, which allowed Willner to substantially undercut his competitors’ prices. With his bakery location sufficiently north of Local 338’s area of operations, he mostly flew under the union’s radar.

Willner’s product happened to be distributed by the same trucking company that serviced John Dioguardi’s Consumer Kosher Provisions. Knowing a good thing when he saw it, Dio soon showed up at the bakery to bandy about his wholesaling leverage — namely, the ability to get supermarket buyers to bend to his whim under threat of labor unrest. Before long, W&S bagels were being stocked on shelves around the city, and the nascent bakery prospered.

Except that Willner’s weren’t the only mobbed-up bagels in town. In 1964, a shop called Bagel Boys had opened in the center of Jewish New York, on King’s Highway in Brooklyn. Among its principals was Thomas Eboli, otherwise known as Tommy Ryan, a capo in the Genovese crime family and a direct counter to Dio. Eboli was so powerful, in fact, that when Vito Genovese died a few years later, Eboli reigned for a time as the family boss.

Dio may have been a capo, but his Lucchese-family backing was no match for the Genoveses. The industry inroads crafted by Willner’s bagel machine made W&S a nuisance to Bagel Boys, and Eboli wanted the shop gone. A sit-down was arranged between the mobsters, and Dio — savvy enough to avoid an unwinnable war with a more powerful rival family — submitted, ditching W&S altogether and using his grocery connections to assist Eboli. Inevitably, W&S went out of business, with Willner’s machines ending up at the Bagel Boys shop in clear violation of the union mandate. This was a problem. Eboli, with the Manhattan Mafia behind him, made the concerns about Dio seem puny by comparison. A fight was in the offing. The main question was whether — and how — to enjoin it.

Ultimately, the union handled the Mafia the same way that it handled nearly all extreme issues with management: full public confrontation. Nearly as soon as Bagel Boys opened its doors, Local 338 members showed up en masse to picket, distributing leaflets headlined, “PLEASE DON’T BUY,” with warnings that nonunion bagels “jeopardize the hard won standards of labor and inspection which the New York City public now enjoy.” Their most effective tactic in such situations was handing out free product in quantities sufficient to devastate business.

It worked. About a week later a member of the local’s executive board received a phone call from one of Eboli’s associates in Bagel Boys, a mobster named Sal Mauro (real name: Salvatore Passalaqua), in which imminent physical harm was intimated for not only the board member, but his wife and children as well. It was concerning enough that a meeting was arranged between union representatives and various Bagel Boys principals, including Mauro and a mobster named Harold Glantz.

Mauro’s group asked the union what kind of contracts might be available in order to get the picketing to stop. When they were told that Local 338 worked with a single, uniform contract, the mobsters recoiled. They were “special people,” they insisted, and merited special treatment. Glantz and Mauro made several propositions over the coming days, including one in which they’d sign the union’s contract with the stipulation that it never be enforced, and another that offered $10,000 to buy the union’s cooperation. It was all rejected. Local 338 wanted union bakers inside the Bagel Boys shop, and nothing less.

With that, Bagel Boys pivoted again. Soon, a sign appeared in the bakery window indicating that a labor contract had been signed … not with Local 338, but with District 5 — an outfit run by Benjamin Krakofsky (a.k.a. Benjamin “Benny the Bug” Ross), a labor racketeer with an extensive criminal record. When picketing continued unabated, another sign appeared, this one saying that the shop had signed with Local 348’s Bagel Bakers Division. The problem with that was that Local 348 was actually a dental mechanics’ union — with mob ties, of course — affiliated with the Jewelry Workers International. The sham affiliation did nothing to deter the sidewalk protests.

In the end, the mob-owned bakery proved no more resilient to union avoidance than its predecessors, finally recognizing that the only way to stop No. 338 picketers was to use No. 338 bakers. It would mean no gradual incursion into the industry, no slow takeover of management or distribution and, importantly, no labor grift.

Finally, Eboli did the only thing he could do. When the union presented him a contract, he signed it.

The author’s great-grandfather, Louis Friedman, is in the third row. Photo: courtesy of Jason Turbow

The showdown with Bagel Boys served to obscure another issue on the union’s docket — one with far more lasting repercussions. Lender’s bagels had been in operation since 1927 in New Haven, Connecticut. It was outside the purview of Local 338, so when, only months before Bagel Boys opened its doors, Lender’s leased a Thompson’s bagel machine of its own, the union paid it little mind. This was a mistake.

While the Bagel Boys wanted their machine to help circumvent the union and undercut prices, Lender’s had bigger plans. The company had only just initiated the frozen-bagel distribution chain that would come to define it, and sought more effective means of mass production. The product was not the same, of course — the dough was thinner, the flavor a pale reflection of the handmade version just down the turnpike — but the product resonated.

Soon, Lender’s moved into a 12,000-foot factory and immediately became the largest bagel producer in the world. Its new markets stretched far beyond the Jewish enclaves to which bagels were previously constrained, and served to further squeeze the bakeries where Local 338 bakers earned their livings. The development meshed precisely with the trend of families moving to the suburbs, where weekly visits to the supermarket replaced daily visits to the specialty shops of the old neighborhood.

Up and down New Jersey and throughout Connecticut, bakeries using Thompson’s machine began pumping out bagels at an astounding rate. Even for those that did not freeze their product, the advent of preservatives allowed for a massive increase in production. Once, bagels had a shelf life of only a few hours. Now it was days. In addition to baking their own bagels, bakeries shipped raw dough all over the country to be baked on-site by shops that otherwise had no hand in the process — including within No. 338’s own territory, New York City.

The incoming bagels were not only more accessible than the locally sourced version, but were 40 percent less expensive. At about this point, Sal Mauro showed up with another mob-backed proposition for the union: He could end dough deliveries into the city, he said, at a cost of $50,000, using the muscle of Joe Genovese, cousin of the former boss of all bosses, Vito Genovese. When union leaders inquired about the details therein, Mauro told them that the less they knew, the better off they’d be. They politely declined.

Instead, they focused on Lender’s, which, while only 80 miles north of Brooklyn, was effectively a world away. Lender’s was technically a union shop, but its union was Local 171, a division of the offshoot American Bakery and Confectionery Workers, with protections derided by No. 338 as substandard, and wages “below poverty level.” As the most prominent source of bagel incursions into New York City, Lender’s was a vital target for 338 leaders, who figured that their best bet to stem an unmistakable tide was direct influence. They wanted to represent Lender’s bakers.

The National Labor Relations Board handed No. 338 a victory by enforcing its right to woo the rival workforce, but despite an earnest effort, the plan to flip Lender’s employees fell apart when — possibly through strong-arming from management, which wanted nothing less than to open its doors to stout union positions — Lenders’ bakers voted to retain the status quo. No. 338’s expansion hopes were stifled, its ability to stymie the flow of bagel dough into Manhattan all but erased.

With no easy answers — become further entrenched? Accept the inevitability of machine-produced bagels? — Local 338 began to splinter. Muddling progress were the old-timers, whose long-lauded sweat and sacrifice in achieving the gains now appreciated by all union members served to steel them against any concession to management, even at the cost of 338’s viability. Union meetings became cauldrons of tension, with no consensus about how best to proceed.

The final strike waged by Local 338 came in 1967, in response to across-the-board contract cuts proposed by the 21 union bakeries remaining in New York. This time, though, the pickets that had worked so capably in the past came up short. Supermarkets’ stock remained strong thanks to frozen product, and with bagel dough flying in from outside the state, shops remained open. After months of ineffective picketing, many of No. 338’s bakers quietly went back to work. No longer constrained by the need to hire union labor, and with the advent of the stainless-steel rotating oven allowing storefront operations to flourish in neighborhoods across the city, the number of New York bagel bakeries soon exploded into the hundreds — nearly all of them nonunion shops.

By 1971, Local 338 had only 152 members, mostly as a hedge against the lingering unreliability of Thompson’s machines. Forget contact concessions; the union was by that point simply trying to retain as much of the status quo as possible. As it turned out, even that was a bridge too far.

Amid widespread contention among the ranks, it was decided that the best path to survival was a merger with the more prominent Local 3, a general bakers’ union. Bagels were more popular than ever — never mind that the supermarket version was softer than it should have been, in tone and texture both — found in far-flung locations that only a decade earlier would have been beyond imagination.

Most of the bakers who had carried the industry to that point were never afforded a chance to participate in the newfound riches. On July 1, 1971, by mutual agreement, Local 3 initiated a bagel division, and Local 338 was no longer.

Jason Turbow is the author, most recently, of They Bled Blue: Fernandomania, Strike-Season Mayhem, and the Weirdest Championship Baseball Had Ever Seen: The 1981 Los Angeles Dodgers, from Houghton Mifflin Harcourt. His grandfather was a member of Local 338, and his great-grandfather was one of the union’s founders. He tweets at @baseballcodes.

How New York’s Bagel Union Fought — and Beat — the Mafia