Inside A Slice of New York’s path to employee ownership.
Last fall, when restaurants were working desperately tokeep their doors open amid coronavirus restrictions, A Slice of New York pizza shops in Sunnyvale and San Jose voluntarily closed for an entire week to give employees a paid, mandatory break.
The decision came after one brutal Friday night shift — followingsix months of brutal shifts — during which co-owner Kirk Vartan watched employees physically and emotionally break down around him. The next day, he called a board meeting.
A Slice of New York is a worker cooperative, meaning the closure had to be approved by the employee-run board. Shutting down for a week would cost upwards of $25,000, not counting lost revenue, but would give the staff paid time off to rest and recharge. The board agreed.
“This is their profits, too. This is where people are taking time to think about the long term and that’s where I see people really understanding the weight of ownership,” Vartan said. “It’s not about today. It’s not about what you get. It’s how do you sustain and what does it take to sustain?”
A Slice of New York became a worker-owned cooperative in 2017, marking the birth of Silicon Valley’s first brick-and-mortar cooperative, Vartan said. There are several worker co-ops in the Bay Area — including the well-known Arizmendi bakeries, as well as landscaping and cleaning companies in the South Bay — but Vartan has become a co-op evangelist of sorts, sharing A Slice of New York’s story in the hope it helps more business owners recognize the benefits of a cooperative structure. Thanks to his advocacy, the City of Santa Clara invested $100,000 in a Worker Cooperative Initiative to support existing co-ops and encourage the development of new ones.
And in an industry where calls for better treatment of restaurant workers, fair pay and structural reform have become louder and louder, particularly during the pandemic, A Slice of New York offers one tangible, local example for how to foster a more inclusive, democratic restaurant environment.
East Coast origins
In the early 2000s, Vartan set out to bring a New York-style pizza shop to the Bay Area.
A New York City native, he grew up on Manhattan slice shops but didn’t come from the restaurant world. He worked at Cisco in San Jose for nearly nine years, where he eventually grew weary of the management hierarchy. But having a small fraction of Cisco stock always made him feel connected to the company. He and his wife Marguerite Lee knew when they opened their own business, they wanted to replicate that spirit and be employee-owned on some level.
But a corporate attorney discouraged them from doing so and as newcomers to the dining industry, they focused instead on getting their pizza shop off the ground. They opened their first location in 2006, serving super-thin-crust pizza on white paper plates, made-to-order strombolis and Devil Dogs from Drakes’ Cakes in New York.
Years later, at a company holiday party in 2015, Vartanoffered his staff a slice of the business.He told them that if they wanted to bring a proposal for employee ownership, he was willing to listen. About a dozen employees added their name to a sign-up sheet.
They started meeting weekly on Sunday mornings, before their shifts at the pizza shop started. They talked to Arizmendi co-founder Tim Huet and attorneys from the Democracy at Work Institute in Oakland, which supports worker cooperative development. They eventually joined Project Equity, an Oakland organization that supports companies that want to transition to employee ownership, and started the year-plus process of selling A Slice of New York to its employees.
Convening the cooperative
The pizza shop functions much like a self-contained city government. It has a board, like a city council, that’s elected annually by its members, has its own constitution (an operating agreement) and makes decisions on budget, governance and strategy. The board meets monthly (now via Zoom) with subcommittees focused on topics like innovation, culture and accountability. Vartan, as the general manager, compares himself to a city manager. He makes the day-to-day decisions for the business but reports to and takes direction from the board, which has the power to fire him. If he needs to spend anything that costs more than 10% of the budget, he has to go to the board for approval.
A Slice of New York employees who opt into membership become part-owners with the right to the profits that they earned for the business, based on hours worked. To become a member, employees must have worked full time for at least 1,200 hours, commit to work there for two years and pay $3,000, like buying a share in the company. Employees have a year to plan for an initial $750 deposit and can pay the rest of the money over two years. If they leave before their two-year commitment, their deposit stays with the company — an investment that’s meant to be affordable but would also sting to lose if they walk away, Vartan said.
A Slice of New York currently has a 13 cooperative members, three of whom are board members, including Vartan. The final step to approval for new members is a 75% supermajority vote by all current members.
Starting employees make about $21 an hour ($16.50 plus profits from a surcharge added to each order)as well as tips, bonuses, holiday pay and paid time off. Many employees earn closer to $23 to $25 per hour, Vartan said, with salary, the surcharge and cash tips. (By comparison, Sunnyvale’s minimum wage is now $16.30 per hour and San Jose’s, $15.45.) Their hourly rate is also tied to the pizza shops’ success: As the shops make more revenue, the employees profit from the surcharge increases.
Employees have a direct hand in evolving the business, from creating A Slice of New York’s first paid-time-off plan to a health care plan that allots money for doctor’s office checkups and massage therapy. In September, a Zoom meeting of the board’s culture and accountability committee included discussions about face shields, increased compensation for shift leads taking on added responsibility during the pandemic and legislative advocacy for workers cooperatives. After noticing weaknesses in the company’s training processes, that committee developed detailed onboarding quizzes for new employees.
“I think that’s where the power lies. You can challenge things,” said Rendell Boguiren, a founding member of the A Slice of New York cooperative who now serves on the board. “It allows for a democratic dialogue about processes, about where money should be going, how we should be functioning collectively.”
Life of pie
Boguiren started working at A Slice of New York in 2010, when he was a San Jose State University sophomore in need of a job. He had never worked in restaurants before; most of his work experience was in retail or unionized jobs at grocery stores.
Boguiren, who later helped the pizza shop transition into a cooperative, said he’s never experienced a work culture like at A Slice of New York. He was given a business card and told to write his own title and any quote he wanted. He said he felt like the face of the company as much as Vartan and Lee, empowered to speak up about the business as both an employee and part-owner.
Decisions at A Slice of New York are made democratically. When the local shelter-in-place order took effect last spring, the company held an all-hands-on-deck meeting and asked its employees, both members and non-members: Should the 18% surcharge for employees be temporarily directed to the business to help keep it afloat?
“It was very enlightening to see how candid people were, honestly, about how they would like it to go back into the pockets of the business,” Boguiren said. “Their reasoning was that the shop was giving them their jobs, their money in their pockets and providing food and things that they needed at the time. When your business treats everybody well, the people come back and want to do the same thing back to the business.”
Colin Webster, a shift lead at the Sunnyvale pizza shop, jokes that A Slice of New York has ruined all other jobs for him. He’s worked there on and off for a decade, since he was 18 years old. He said he doesn’t feel like a number at A Slice of New York, and he even calls Vartan and Lee his second parents. (When he moved to the East Bay and temporarily stopped working at the shops, he’d get regular texts from Lee checking in on him.)
“Everything about this job has always been very different than other jobs I’ve had,” Webster said. “The amount of care everyone has for the company and for each other has always built a very strong foundation and a very strong team, almost like a family dynamic.”
It’s also a job defined by freedom and trust rather than top-down hierarchy, Webster said. Although he’s a shift lead, responsible for counting cash at the end of the night and giving Vartan a rundown of how service went, Webster said it’s more like being a team captain than a manager.
Webster isn’t a cooperative member because until recently he was working part time but he’s now seriously considering it.
“The ability to really dictate and help decide what’s going to happen in the future of the company and how we progress is really appealing to me,” he said. “It’s not just a job anymore. It’s something that I can help cultivate in a more real sense.”
It’s rare that someone’s work experience is so meaningful that they want to permanently memorialize it on their body. But Boguiren, Webster and several employees did just that. On Boguiren’s left bicep and Webster’s right calf is a tattoo of what they call the A Slice of New York “family crest,” the Manhattan skyline inside the outline of a slice of pizza.
“I get a sense of belonging here that I don’t get in other jobs,” Webster said. “It feels like a company that cares about you. It’s not about the bottom line. It’s about you and making sure you’re OK and that you can afford to live and make it a career.”
‘It’s all about your people’
A Slice of New York’s response to the pandemic illustrates the radical benefits of a worker-owned cooperative. No employees have been laid off, though the pizza shops stopped hiring for six months, reduced operating hours and have had to close several times due to staffing shortages. Employees who didn’t feel safe working received sick time, and those working were allowed to eat for free at the pizza shops. (And when one employee’s wife visited her family outside of the area, A Slice of New York split the cost of a hotel where she quarantined until she tested negative.)
Ownership took early, proactive steps to protect employees’ health. A Slice of New York shifted to takeout only on March 8, before the shelter-in-place order, and started limiting the number of people who could come inside the shops. Vartan also made a difficult — but in his eyes necessary — decision to stop selling pizza by the slice, which typically accounts for 40% of revenue.
When some new employees resigned in mid-March, unwilling to risk their health to serve pizza, Vartan talked to them about their concerns, which informed how to help the remaining employees feel more comfortable. He required everyone to wear masks before it was mandated by Santa Clara County and started checking employees’ temperatures. The pizza shop is also unusually transparent, posting detailed updates about COVID-19 precautions and internal business decisions on its website.
At A Slice of New York in Sunnyvale, only five customers are allowed inside at a time, and there are two doors designated for entry and exit to minimize contact. They’ve jury rigged a contactless notification system for when orders are ready — a walkie talkie fastened with velcro to the front window — and added a touchless thermometer to check customers’ temperatures. They recently separated the Sunnyvale and San Jose employees into two pods to further prevent any potential exposure.
“The one thing I walked away from Cisco with … is it’s all about your people. No matter how good your product is, if you don’t take care of your people it doesn’t matter,” Vartan said. “You take care of the people; the people take care of the business; the profits work themselves out.”
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