Fireman Hospitality Group Fires Back at ROC-NY Activists

Lawsuit 'A Sad Shakedown Attempt'

ROC-NY 'In Clear Violation of Both Tax and Labor Laws'

Jun 08, 2006, 01:00 ET from Fireman Hospitality Group

    NEW YORK, June 8 /PRNewswire/ -- The Fireman Hospitality Group, owners
 of a half-dozen famed New York restaurants, including the Redeye Grill and
 Shelly's, today fired back at a group of activists who have targeted the
 chain with lawsuits and protests over the last several months.
     Fireman accused the Restaurant Opportunities Center (ROC-NY), who
 yesterday filed their second frivolous lawsuit against the company as
 reported in today's New York Times, of conducting activities in violation
 of U.S. tax and labor laws.
     "I have been, and remain shocked by the blatant disregard that these
 activists have shown for the law by engaging in this sad shakedown
 attempt," said President Shelly Fireman.
     "When the truth is on your side, you must fight back, and fight is what
 we will do. I am proud of my company, and I consider my employees like
 family -- so I will of course defend both."
     Fireman had previously asked for an investigation of ROC-NY and its
 activities by the National Labor Relations Board, and today released a
 letter sent this morning to the Internal Revenue Service. The letter
 accuses the group of using tax exempt funds designated for "charitable"
 purposes for non- tax exempt activity.
     These activities include: Operating a competing restaurant while
 protesting and hurting the business operations of other restaurants;
 Conducting advocacy campaigns which by law should be conducted with non-tax
 exempt funding; Acting as a front for a local union.
            (The Fireman's tax complaint is below in its entirety.)
                         The Fireman Hospitality Group
                   888 Seventh Avenue Suite 202 NYC, NY 10019
                        T 212.399.1325   F 212.581.5558
     Treasury Inspector General for Tax Administration
     P.O. Box 589
     Ben Franklin Station
     Washington, DC 20044-0589
     Dear Inspector General:
     I would like to call your attention to the serious abuses of the
 Restaurant Opportunities Center of New York (ROC-NY), a 501c(3) non-profit
 corporation operating in New York City.
     ROC-NY appears to be using tax-exempt funding for purposes outside the
 rules governing 501c(3) organizations.
     ROC-NY was created following September 11, 2001 in an effort to assist
 displaced restaurant workers in attaining new jobs in New York
 restaurants.(1) What started out as an effort to help people has evolved
 into an effort to harm New York restaurants by making false allegations
 against restaurants and picketing restaurants under the guise of assisting
 restaurant workers.
     ROC is even described in June 7, 2006 New York Times article as "an
 aggressive advocate, and has used street protests and legal action" in its
 campaigns. We submit that aggressive advocacy is a clear violation of rules
 governing 501c(3) charitable organizations.
     Additionally, we request that you investigate the specific allegations
 detailed below:
     * ROC-NY is a front for labor organizing.  Hotel Employee & Restaurant
       Employees (HERE) created and continues to back ROC-NY.(2)  The intention
       is to have an arm of HERE that can effectively act as a minority union,
       in other words conduct activities otherwise barred by federal labor
       laws.  This is not a 501c(3) charitable purpose.
     * ROC-NY provides illegal competition to New York restaurants.  ROC-NY
       owns 40 percent of one New York restaurant, Colors, and has the stated
       goal of opening more restaurants.(3)  ROC-NY's picketing and
       disparagement of other New York restaurants is unfair competition.  A
       501c(3) cannot wear two hats -- advocating for workers by picketing
       restaurants and then operating a restaurant for its own benefit.  In
       fact, three employee owners of Colors serve on the ROC-NY Board of
       Directors, including its President and Treasurer.
     * ROC-NY promotes political action.  According to the magazine Dollars and
       Sense, ROC-NY conducts a 10-week "political education" class for
       members.(4)  If ROC-NY is teaching political skills to members to
       direct their involvement in electoral politics, this is clearly in
       violation of its 501c(3) charitable status.
     * ROC-NY's "direct actions" exceed "educational" purposes.   ROC-NY's
       picketing of restaurants is well outside the guidelines set for 501c(3)
       organizations.   ROC-NY's actions:
         -- Hurt the income of workers at the restaurants they picket by
            interfering with the operations of the restaurants and scaring away
         -- Violate rules about distributing "propaganda" by making
            unsubstantiated and even outlandish claims about restaurants'
         -- Violate local laws as many of the protests or other actions are un-
         -- Rather than seeking its own permits for protests, ROC-NY often
            solicits help from the Union Theological Seminary to obtain the
            permits under the guise of a "worship service," which is obviously
            inaccurate.(5)  Apparently, these permits are obtained with the
            support of the administration at Columbia University.
     ROC-NY is funded by the following organizations:
        -- Foundation for the National Institutes of Health
        -- Robert Wood Johnson Foundation
        -- Nathan Cummings Foundation
        -- New York Foundation
        -- American Red Cross
        -- September 11th Fund
        -- The Policy Advocacy on Tobacco and Health Initiative
        -- North Star Fund
        -- Lower East Side People's FCU
        -- Discount Foundation
     As 501c(3) organizations, these foundations may be in violation of the
 501c(3) regulations as well if they are knowingly funding non-exempt
 activity. We thank you in advance for attention to this important matter.
     Sheldon Fireman
     President, The Fireman Hospitality Group
     (1) Labor Notes
     (2) Dollars and Sense Magazine
     (3) ROC-NY's Website
     (4) Dollars and Sense Magazine
     (5) Announcement of "worship service"

SOURCE Fireman Hospitality Group