Employees from the Circleville, Ohio, Sonic quit--as a group. They were fed up with new management, and walked out together, leaving this sign behind:

What happened here, and how can you prevent it from happening in your own business?

People are saying one of the key problems is that the new management cut wages from $9 an hour to $4 per hour, forcing employees to make up the rest in tips. However, fast food workers don't typically rely on tips as do sit-down restaurant wait staff, and customers don't expect to leave them. Some may tip, especially for drive-in service, but that's still a huge pay cut. (Legally, the company would be responsible to bring up pay to the local minimum wage of $8.55 if tips were not enough to reach that amount.) 

You can see why employees would be upset. Sonic released the following statement:

Effective Monday, February 25, eight SONIC Drive-Ins in the Columbus, Ohio market will be under new ownership and management. SRI Operating Company, an affiliate of the SONIC franchisor and operator of SONIC Drive-Ins across the nation, is in the process of purchasing these drive-ins from a franchisee.
Under new management, guests and the community can look forward to improved service and the famous food, beverages and treats for which SONIC is known. Employees working for the local drive-in can look forward to fun, fast-paced work on which they can build a career, if they choose. Most current employees will have the opportunity to continue to work at the drive-in under the new ownership.
The Circleville and Lancaster SONIC Drive-Ins along with others in the market will re-open on Monday morning under new management. We recognize that changes like this can be difficult for employees to understand, but are pleased that most current employees will have the opportunity to continue working at the drive-in.
We look forward to being a part of the community for decades to come and appreciate the opportunity to serve our guests every day.

How you can avoid an employee rebellion

Well, first, don't cut pay. Someone may have thought tips would make up the difference, the restaurant would save a bundle in hourly wages, and employees wouldn't care. Except the employees do care.

Sometimes companies assume they can treat entry-level employees poorly because there is always someone else out there who can do the job. But replacing one person is very different from staffing an entire restaurant from scratch.

Additionally, the claims go beyond just pay cuts. Employees at the Lancaster, Ohio, Sonic left a letter that accuses Sonic management of under-the-table work, racism, and generally treating employees poorly

The key to avoiding this type of dramatic action by employees is simply "don't be a jerk and follow the law." Racism at work is illegal. Under-the-table work is illegal. Being a jerk isn't illegal (as long as you are an equal opportunity jerk), but it makes employees not feel any loyalty.

The solution can be quite simple: Treat your employees well. You're not going to save money with high turnover and employees who hate you. So, don't be a jerk and you'll likely prevent the same thing from happening at your company.

Update:

Christi Woodworth, Vice President of Public Relations for Sonic sent me the following statement:

Thanks for the opportunity to send you some information about what happened in Ohio as our operating subsidiary purchased a number of drive-ins from a franchise group in Ohio.  The employee reaction in two drive-ins is now well documented. While some staffing changes were made, the vast majority of general managers and leadership were retained.  General managers are now eligible for short term bonuses and absolutely no wages were reduced. Employees were happy to learn that they will now be paid through direct deposit and pay cards.

We were disappointed in the incidents last week and know they occurred in only two of the locations. Our team is looking forward to becoming part of the communities and delivering outstanding guest service and delicious food. The only way to achieve those goals is to attract and retain top talent and offer them a great work experience, training and career development for those team members who find they love this fast-paced, fun and challenging business.

Published on: Feb 27, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.