A year ago this week, I was puzzling over why one of my favorite Louisville tourist traps, Lynn’s Paradise Cafe, had suddenly closed. I suggested it may have had something to do with the impending regulations that would be foisted upon businesses in 2014 by the Affordable Care Act (ObamaCare). I haven’t lived in Louisville for nearly nine years, so I’ll admit that I don’t understand all the dynamics that went into Lynn’s decision to shut down. I earned only one response I believe was ill-considered. Louisvillian Briana Morgan said that my suggestion was irresponsible. Here are her thoughts. More
Like many other current and former Louisvillians, I’ve spent much of this afternoon reading reactions to the surprise closure of Lynn’s Paradise Cafe, one of the Ville’s most popular breakfast/brunch spots for two decades. I lived two blocks from Lynn’s for several years and I’m certain I contributed enough cash to help buy Lynn a few more Lay-Z-Boys. For that, I feel perhaps a bit justified in admitting this much: On a few hungover mornings, I probably snagged a few free cups of coffee from the large outdoor coffee dispenser implicitly reserved for waiting customers. There was always a line to get a seat at Lynn’s at brunch, so my thievery was likely never noticed.
The circumstances of the closure are quite odd. I’m sure as facts begin to emerge, we’ll get a better sense of what happened. The early read-between-the-lines narratives of the conflict seem to go something like this:
- Kentucky Jobs with Justice: Lynn’s instituted a new policy regarding workers’ tips that angered and outraged her waitstaff. But rather than quit en masse and find other employment, the workers called us to lean on Lynn and make things right to get the wages and employment terms those people deserve.
- Lynn Winter: I only altered my policies because I didn’t know how ObamaCare would affect the profitability of my business. Thanks to these agitators, it’s probably time I just packed it in and called it a day.
Why might Lynn be totally correct? A few reasons, though I’ll happily admit that I could be misreading the evidence presented thus far.
First, under ObamaCare’s state-initiated health insurance exchanges, employers could have to pay the IRS thousands of dollars for every employee to whom the employer fails to offer health insurance. Ah, but that’s got nothing to do with how employees get tipped, I hear you cry. Maybe. Maybe not. After all, employees typically pay for a portion of their own health insurance. And in a food-service industry where paychecks often come out to $0.00, that might well be a critical factor.
Second, Lynn’s COO Patty Schnatter told WAVE3 news that a new policy of requiring waiters/waitresses to carry $100 in order to tip out the rest of the waitstaff at the end of the evening was driven by the desire to make it easier for employees to file taxes at the end of the year and buy into insurance.
All of what I’ve just said is subject to revision since this is a very fresh story, but there are at least a few reasons to believe that a popular Louisville landmark’s closure is attributable to the health care policies championed and signed into law by President Obama.
If you have thoughts, please leave them in the comments.
UPDATE (01/13/12 08:00AM): I was asked how many people worked at Lynn’s. It’s a relevant question because ObamaCare (the Affordable Care Act) has certain triggers for employers with 15 employees and 50 employees or full-time equivalents. According to Winter, she employed 85 people, though it’s not clear how many were full-time equivalents. The point here is that the ObamaCare “tax” on employers who do not succeed at providing health insurance was likely among the front-and-center issues driving this whole conflict.