An email urging lower wages for new employees due to higher gas prices sparks walkout at Lawrence Applebee’s

photo by: Chad Lawhorn/Journal-World

The Applebees at 2520 Iowa St. in Lawrence is pictured on March 23, 2022.

Rising gasoline prices are causing all types of problems for businesses, but Lawrence’s lone Applebee’s restaurant faced a new one this week.

The restaurant on south Iowa Street was closed for large parts of Tuesday because of high gasoline prices, but perhaps not for the reasons you would think. Multiple employees of the chain quit after seeing an email from a regional manager urging the restaurant to begin hiring employees at lower wages, under the theory that people are becoming more desperate to take a job as fuel prices increase.

“Everyone has heard that gas prices continue to rise,” read an email that came from the account of Wayne Pankratz, executive director of operations for Applebee’s franchisee Apple Central LLC. “The advantage this has for us is that it will increase application flow and has the potential to lower our average wage. How you ask?

“Most of our employee base and potential employee base live paycheck to paycheck. Any increase in gas price cuts into their disposable income. As inflation continues to climb and gas prices continue to go up, that means more hours employees will need to work to maintain their current level of living.”

When Jake Holcomb, one of several managers at the Lawrence restaurant, ended up seeing the email on Monday, it upset him enough that he made copies of the email and distributed them to several employees of the restaurant.

When opening time arrived on Tuesday, the manager who was scheduled to open the restaurant at 2520 Iowa St. declined to open the restaurant after reading the emails. She has since quit over the email. Holcomb has too. In total, Holcomb said three of the six managers at the restaurant quit in protest of the email.

“I was just stunned and disgusted,” said Holcomb, who had worked at Applebee’s in Lawrence and elsewhere since 2020.

By Wednesday, the Lawrence restaurant had reopened. A spokesman for Apple Central LLC confirmed the Lawrence location was closed for a time on Tuesday, but he couldn’t confirm how many employees had quit or what role a lack of employees played in Tuesday’s closing.

But the spokesman said he agreed that the email was stunning.

“It is embarrassing. It really is,” said Scott Fischer, director of communications for Apple Central, which is based in Kansas City and has 47 Applebee’s restaurants in the Midwest.

He said Apple Central doesn’t have any policy about trying to use higher gas prices as leverage to lower the wages it pays new employees. Fischer said the idea hasn’t been discussed as a potential idea among the company’s top management either, in part, because it doesn’t make much sense.

“I know this probably sounds crazy, but I have no idea what this gentleman was even talking about,” Fischer said. “We are still scratching our head about what this gentleman was thinking.”

At one point, though, Pankratz’s email was straightforward. He urged managers to hire “employees in at a lower wage” to decrease labor costs “when able.” In that same paragraph he also urged managers to “have a pulse on the morale of your employees.” He said managers should be conscious that employees may need to get a second job during these times of high inflation and that managers should do scheduling work far in advance to accommodate those dual job holders.

“Do things to make sure you are the employer of choice,” the email read. “Get schedules completed early so they can plan their other jobs around yours. Most importantly, have the culture and environment that will attract people.”

Fischer said he understood some of the comments about needing to accommodate schedules and keep a close eye on morale. But he said if that was the message the email was trying to convey, it failed.

“Our team is our backbone,” Fischer said. “We are nothing without the people who work for us and that are on our team. Even the thought that anything would be communicated that does anything other than put them on a pedestal and let them know they are the single most important component of our business is disheartening and frustrating.”

But Holcomb, the now former manager who circulated the email to employees and also posted it on some internet message boards, said the sentiments of the email were a “blatant” example of what the company thinks of its employees.

He said many employees at the restaurant, many managers included, did survive paycheck to paycheck. Fischer told the Journal-World he didn’t have information readily available about wage rates the company pays in Lawrence. But he said the company pays at or above market rates, although that varies widely from market to market.

Holcomb, though, said the entire incident showed a lack of respect for employees.

“The fact that people are going to be forced to take a second job, and since they basically have no choice we should go ahead and pay them lower wages really bothered me,” Holcomb said.

Holcomb said he’s heard from several employees at the Lawrence Applebee’s who plan to quit once they find another job.

Pankratz, however, is still employed with Apple Central, although that could change as the company finds out more information, Fischer said.

“We are doing an investigation, as we always do,” Fischer said. “We are very fair in understanding that people make mistakes. But I can’t comment until we better understand why he wrote it.”

The Journal-World attempted to reach Pankratz via phone for comment, but was unsuccessful.


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