Eataly’s Workers Say They Feel Betrayed by a New Payment Plan

“We got bamboozled into it.”

A shopper, inside one of the two New York Eataly stores. Photo: David Williams
A shopper, inside one of the two New York Eataly stores. Photo: David Williams

On April 23, Eataly North America executive vice-president Raffaele Piarulli sent an email to employees — “Eatalians,” as he calls them in the note — laying out some of the Italian grocery chain’s pandemic-related plans, since the company had secured loans from the federal government’s Paycheck Protection Program. For many staffers, the mere fact that the company had received any money in the first place was a point of contention. (As recently as January, Eataly was touting revenue numbers in the neighborhood of $750 million.) But for others, the letter itself was an inflection point, as employees who reached out to Grub Street say it was just the latest example of simmering tension between workers and management, pointing to policies that they feel increasingly emphasize the bottom line over employee welfare.

“I really enjoyed the atmosphere, I enjoyed the camaraderie, how good they were to us, the education, all of it,” says one New York-based Eataly staffer. “And then it just went completely the opposite … this is the nail in the coffin.”

In the email, Piarulli explains that the loans will allow Eataly to pay partial wages to its workers and offer employees, who had been eligible for unemployment benefits, a choice: “Of course, we understand that receiving a paycheck from Eataly will impact your eligibility for unemployment, and we would never want this initiative to turn into something that unintentionally penalizes you … We would appreciate you letting us know if you choose to enroll in/continue to remain on state unemployment and permanently resign from your position instead.”

The obvious problem, workers say, is that the choice only really allows for two bad options: Take the payment plan from Eataly (which it’s calling the Stay-at-Home Pay Program) and earn significantly less than they would under unemployment, or voluntarily resign and, in the process, likely forfeit any claims to unemployment benefits. When asked about the situation, an Eataly spokesperson responds, “Through the financial bridge provided by these loans, we have brought hundreds of employees back on payroll, and we feel we’re doing what is right for them.”

But even employees who had otherwise positive feelings about the company say that this choice, and the subsequent follow-up, didn’t sit well: “I was pretty much a big fan of the company up until recently,” says another Eataly worker based in New York, “so it’s been pretty disheartening what’s happened over the past couple days.”

As another employee told me at the time: “Just to even put in there that you have to resign is bullshit … If I resign or quit my job, I’m not eligible for unemployment. So you gave me ultimatums that screw me either way.”

For example, one New York employee says she was initially offered $650 a week by Eataly, before it was increased by a couple hundred dollars: “They’re going to tax that and take benefits out of that,” she explains. “I’m going from around $1,100 a week on unemployment to $300 a week. How am I supposed to live on that? We got bamboozled into it … Everyone I know lost money.”

Another New York employee says that Eataly’s payment plan, and the necessary reduction in wages compared to his unemployment benefits, meant he needed to find a second job to support himself and his family: “Now what’s happening is, I have to get this job doing delivery,” he says. “I have to expose myself in order to make sure everyone is okay.”

Their experiences illustrate problems with the PPP loans themselves, which have been roundly criticized by restaurateurs for not offering any meaningful assistance. “We’d much rather know we have some sort of safety net through unemployment versus a plan only set to last four weeks,” one Eataly employee based outside of New York says. “It’s very clear the company doesn’t have any idea of what they’re doing past June. It doesn’t make any sense.”

Employees also say that, since the email, which people have taken to calling the “resign letter,” the situation has only gotten murkier. Eligible employees were told they’d essentially be auto-enrolled in the Stay-at-Home Pay Program if they didn’t resign, and multiple people say the company’s HR department stopped responding to emails on the topic. “At this point, HR is refusing to respond to employees in writing and has instructed people to call them to discuss ‘case-by-case’ issues,” says the worker at an Eataly outside New York. “It’s an absolute nightmare.” (When asked about Eataly’s HR practices, a spokesperson for the company declined to answer.)

An employee based in New York says that, when she confronted the company about this practice, she was told it was “easier” to call people. “And I said, ‘It was easier for you to call over 500 employees? There are two of you calling.” This employee says the explanation didn’t add up: “They haven’t replied by email because they don’t want to leave a paper trail, it seems like to me.”

In all, employees say the company’s handling of the situation and lack of transparency has made them feel expendable, and they’re unsure if trust can be restored. As one New York employee put it to Grub Street, “I feel like I’ve been a little stabbed in the back.”

Eataly Workers Say They Feel Betrayed by a New Payment Plan