Restaurateurs Cry Foul Over Lockdown Restrictions 'Slamming' Eateries

When Gov. Gavin Newsom made 41 of California's 58 counties subject to new, tighter coronavirus-related restrictions on Nov. 16, many businesses scrambled to figure out what it would mean for them. 

With 70% of the state now facing more strict rules for retail and restaurants, the effects of the newly applied restrictions were felt up and down California. Golden Gate Restaurant Association Executive Director Laurie Thomas said that while she fully believes in taking precautions to safeguard public health, she is worried that all the back-and-forth and severe restrictions could push Californians into a different public health crisis: the kind that results from people losing jobs, losing healthcare and not having money to meet their basic needs. 

“We need to look at the greater public health costs of making some of these decisions,” Thomas said, whose organization represents San Francisco restaurant owners.

An August survey by the California Restaurant Association found that before the pandemic, 1.4M Californians worked in restaurants. Between March and August, between 900K and 1M of those workers were either furloughed or laid off. Fully 30% of responding restaurant owners said they planned to either close their restaurant permanently or close some locations.

LA County bartender Karen Fu had just returned to work in October, but now that outdoor dining is not allowed, her last day will be Wednesday. Whether that amounts to a temporary layoff or a full termination of employment likely depends on how long these conditions last, Fu said. 

"There's a constant recalibrating" to adjust to the changing rules for restaurants, rearranging dining areas, measuring table distance, rejiggering staffing numbers to meet ever-changing needs, and "there's a huge trickle-down effect to all the workers when those changes are made," often because it means cutting worker positions. 

"Part of the draw of me working in the industry has been being surrounded by people who can adapt well and quickly," Fu said. "But this has definitely been a difficult time to do so."

Fu agrees that an end to outdoor dining, even if only for three weeks, will likely be the end of some restaurants. 

Other parts of the state are in tiers with less severe restrictions, but even there the industry has sustained a huge hit. A survey by San Francisco’s Office of the Controller found that after the initial lockdown orders in March, San Francisco’s restaurant and food service industry was the hardest hit, with nearly 60,000 jobs either partially or completely eliminated. Thomas said only about half of those have come back. 

Federal funding is needed now in order to keep businesses alive, Thomas said. She received Paycheck Protection Program funding in June and is still using that now. She owns two full-service, sit-down restaurants in San Francisco. Sales are down 55% year-to-date at one of them. “PPP funding is the reason why I’m still in business,” Thomas said. 

Business interruption insurance traditionally kicks in when a company loses money during an insurable event that is covered by their policy, but many policyholders across the country are finding that coverage does not usually apply to pandemics. 

Some retailers have filed lawsuits over the denial of coverage. Between March and September, bars, restaurants, retailers and other businesses across the U.S. have filed more than 1,000 lawsuits, and the majority of them have not been decided in favor of the policyholders. 

Without widespread federal money helping restaurants, Thomas said she isn't optimistic about how many SF restaurants can survive the pandemic much longer, adding that the sector cannot survive on takeout alone. 

“Businesses will close permanently. Those jobs won’t come back,” Thomas, adding that she fears she may have to start sharing suicide prevention hotline numbers with her association members in addition to information about available financial and health resources. 

The picture isn’t much better in Beverly Hills, Beverly Hills Chamber of Commerce President and CEO Todd Johnson said.

Los Angeles County is one of the 41 counties in the state that’s working with the most severe restrictions. COVID-19 transmission is “alarmingly high” in the county, and hospitalizations are hitting levels not seen since August, a release from the Los Angeles County Department of Public Health said.

Beverly Hills is usually associated with luxury, and its most famous shopping spot, Rodeo Drive, has actually fared well throughout pandemic restrictions, Johnson said. But restaurants are another story.  

A late-night, statewide curfew mandates that restaurants, breweries, wineries, bars and other nonessential retailers have to close to customer service between 10 p.m. and 6 a.m. That means those businesses can still deliver and do takeout and pickup, but they can’t serve people after 10 p.m. This went into effect in LA County on Thursday night. 

Then on Sunday, LA County's Department of Public Health announced that as a response to still-surging case numbers and increasing hospitalizations restaurants, breweries, wineries and bars will only be able to offer take-out, drive-thru and delivery, effective Nov. 25. In-person dining "will not be allowed, at minimum, for the next three weeks," the release said. 

The curfew doesn’t likely affect any retailers in Beverly Hills, Johnson said, “but people in food and beverage are getting slammed with this.” From the outset of these restrictions and the initial lockdown in March, there were lawsuits challenging the legality of the businesses that were deemed essential and the general restrictions that were imposed by the state on its residents.

According to a tracker developed by the publication CalMatters, there are currently 29 pending lawsuits against the state relating to coronavirus restrictions. That total does not include eight that were filed but have since been dropped and four that the state has won.

“A lot of the restaurants I talk to, it’s money in and money out. They’re paying their bills and paying their staff, but they’re not making anything,” Johnson said. “If we take a step back and go to takeout only, it’s going to be devastating."