Pending legislation could unshackle central kitchens

Pending legislation could unshackle central kitchens

Ken Rankin

WASHINGTON–New Federal legislation broadening the restaurant industry’s current exemption from U.S.D.A. meat and poultry inspections could trigger a sharp increase in the use of central food preparation facilities by food-service chains.

The bill, unveiled last month by Sen. Walter Huddleston (D-Ky). would abolish what he described as the “onerous and unnecessary” requirement that central kitchens which prepare menu items for two or more restaurant outlets undergo regular inspections by the Agriculture Department’s Food Safety and Inspection Service.

Although restaurants themselves are exempt from these Federal inspections, central food-preparation facilities set up by multiunit food-service operators to supply several establishments are covered by the department’s current rules.

As a result, chains using central kitchens have little flexibility to change menu items, or even modify the recipes used to prepare these items, because any such adjustments must be approved in advance by U.S.D.A. bureaucrats in Washington.

According to officials at the National Restaurant Association–a longtime critic of the department’s inspection rules–“many more restaurants would use central kitchens if they were not inspect by U.S.D.A., since these kitchens must now meet the same stringent requirements for sanitation, equipment and facilities required of meat packing plants.”

Significantly, U.S.D.A. officials themselves share the industry’s misgivings over the current inspection policy.

In a study released last year, the Food Safety and Inspection Service concluded that Federal inspection of central restaurant kitchens “is probably burdensome” because it “may prevent some central kitchens from expanding their operations, which could result in decreasing competition,” Huddleston said.

Critics of the present policy also contend that such U.S.D.A. inspections are unnecessary (since these food-service facilities are already under scrutiny by state and local health agencies), and that Federal inspection of central restaurant kitchens is a waste of scarce Government tax revenue.

(Last year, U.S.D.A. estimated that it costs the taxpayers nearly $4,000 annually for every food-service central kitchen inspected by Federal officials.)

Under Huddleston’s new bill, “operations conducted at a restaurant central kitchen facility shall be considered as being conducted at a restaurant [and therefore exempt from U.S.D.A. inspection] if the restaurant central kitchen prepares food products that are ready to eat when they leave such facility and served only to customers at restaurants owned or operated by the” person or firm operating the central food preparation facility.

The United States Supreme Court handed down two recent rulings of more than passing interest to the restaurant industry–but the reaction to those decisions from food-service legal beagles has been mixed at best.

One of the cases (Lone Steer v. Labor Department) was expected to resolve the question of whether Federal wage and hour enforcement agents may demand on-premises access to a restaurant’s payroll records without first obtaining a alid court search warrant.

The Court ruled against Lone Steer, but dodged the broader question of warrantless entry to restaurants and other business establishments.

Attorneys at NRA, which had defended the restaurateur’s right to turn away warrantless Federal wage-hour agents, predict that the Court’s ruling will have “little effect on the way [the Department of Labor] will conduct future investigations.” In a separate decision of particular concern to the fast-food segment, the Supreme Court ruled that franchisees who agree to resolve disputes with their franchisors through arbitration are restricted by Federal law from litigating those disputes in state courts.

That case involved a suit filed by a group of West Coast 7-Eleven convenience food store franchisees who had charged the chain with fraud and breach of contract in violation of a California statute which invalidates contract provisions (such as arbitration agreements) which violate state law.

In ruling against the franchisees, the Supreme Court held that the Federal Arbitration Act (designed to protect contractual arbitration agreements) supercedes the California statute.

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