Fox News misrepresented how Darden Restaurants and Denny's are responding to the Affordable Care Act in order to suggest that the Affordable Care Act is harming workers and driving up prices.
An owner of a number of Wendy's restaurants in Omaha, Nebraska announced that the franchise would cut employees' hours to avoid providing health care for many of its workers. Fox Business host Stuart Varney dishonestly argued that the decision by this one Wendy's franchise owner was part of larger trend, citing moves by Darden Restaurants and Denny's to bolster his claim.
But Varney's reference to Darden Restaurants and Denny's is wrong. Darden, the owner of the Olive Garden, announced in October that the company would scale back employee hours to avoid having to provide health insurance. Darden subsequently backed off and confirmed it would not move full-time employees to part-time status.
In the case of Denny's, John Metz, the owner of dozens of Denny's restaurants, announced a plan to institute a five percent surcharge to all his customers' checks but later did not go through with his plan. After Metz announced his plan, Denny's chief executive John Miller contacted him to express that the surcharge was "inconsistent with our values." Miller told the Huffington Post in an email that he was disappointed "that [Metz's] comments have been interpreted as the company's position." Miller added:
"Unfortunately, the comments of this franchisee, who represents less than 1 percent of our system and who owns restaurants in other concepts, has been portrayed as reflective of the entire Denny's brand," Miller said. "I am confident his perspective is not shared by the company or hundreds of franchisees/small business owners who make up the majority of the Denny's community. Specifically, his comments suggesting that guests might reduce the customary tip provided to their server as an offset to his proposed surcharge are inconsistent with our values and approach to business throughout our brand."
Metz did not go through with the 5 percent surcharge.
These fast food restaurants have rescinded their plans to cut hours or increase prices, in part as a result of strong negative public reaction. In addition, a study conducted by the Urban Institute found that the health care law would have a "negligible impact" on most business' costs and could save money for small businesses employing 100 or fewer workers.