Unpacking the controversy behind Detroit Street Filling Station's relaunch

In recent years the media have reported many stories of people who suffered significant professional consequences because of statements they made on social media platforms. But just after Thanksgiving in Ann Arbor, some laid-off workers took to social media to air grievances against their former employer – and what began as an internal business matter quickly became a community conversation.


Phillis Engelbert and Joel Panozzo had opened Detroit Street Filling Station as an upscale vegan eatery just three months before the November incident. Engelbert and Panozzo, who also own both locations of the Lunch Room, had determined by Turkey Day that DSFS wasn’t financially viable and that they needed to recalibrate the restaurant’s look, atmosphere, price point, menu, and staff in order to stay in business.


So on Saturday, November 25th, at around 9:30 p.m., as the night’s last customers lingered in the restaurant, DSFS’ owners reportedly gathered their on-duty managers outside and told them that the restaurant would be closing indefinitely, in hopes of reopening with a new concept.


Following this meeting, DSFS closed up for two days. Engelbert and Panozzo scrambled to make the space look and feel more casual, and worked with cooks to develop a new menu, recipe books, prep sheets, and produce shopping lists. Meanwhile, a press release about DSFS’ new vision was sent out.


Some former DSFS employees received an invitation via email to stay on at DSFS 2.0, while eight others (two managers, four cooks, and two servers) received a termination of employment message later shared on DSFS’ Facebook "reviews" page. The email stated that Engelbert and Panozzo were reconfiguring to "a smaller, more casual concept that will require far less staffing," informed employees that their health insurance would continue through December, and encouraged them to ask for a job reference.


The former DSFS employee who shared the email on social media was Jamie Seely, a server. "I didn’t know anything was wrong," Seely says. "I got the email that night, after I’d worked a busy Saturday night. … I’ve never been contacted (about a layoff) through email before. I’ve always been sat down and talked to."


"It was just a timing thing," Engelbert says of the email notifications. "It was a Saturday night at the end of a period of declining sales. It was also the end of a pay period, and it became clear that we would have to borrow money to make payroll. The decision had to be made and communicated quickly. … I’m afraid there was no great solution. And we regret the hurt that came out of it."


One reason for the online controversy is that a central tenet of Engelbert and Panozzo’s brand involves social justice and treating employees well. They offer their workers – 25 of whom are in recovery – paid sick days, a retirement plan, a wage higher than minimum, and most importantly, health and dental care benefits, which is highly unusual in the restaurant business.


Engelbert and Panozzo, who currently have 55 employees, pay an estimated $10,000 per month to cover health and dental insurance for workers who work 30 or more hours a week. They pay $2,000 per month for a simple IRA retirement plan.


"All of those benefits continue, even through our period of belt-tightening, and are benefits that we have worked hard to protect," Engelbert says. Plus, the owners founded the Youth Justice Fund, donating a portion of weekly sales to provide aid (and sometimes a job) to young people who are reintegrating into society after completing a prison sentence.


Some of the eight employees who got laid off, however, felt that the owners’ admirable idealism may have been on a collision course with the fiscal realities of the restaurant business.


"I don’t think the owners of the Lunch Room intended to be bad, but their actions were ill-informed and harmful to the people in marginalized positions that they claim to support," said another laid-off DSFS employee, who requested to remain anonymous due to an ongoing job search. "I left a great job to come join their team, because they’d made a lot of commitments to being ethical employers … and I thought I could live my ethics in the workplace. I took a pay cut to come work for them because that’s a priority to me."


Meanwhile, Seely wrote in DSFS’s Facebook reviews page, "I loved this place and the people who surrounded it. … As a company who talks about how much it strives to support and respect their employees, it's funny how it lets go of almost half its staff without the decency to tell us to look for new jobs in advance."


As things got heated online, Engelbert and Panozzo published an open letter on November 28, which began: "You may have noticed that our business has come under attack on social media and through word of mouth over the last few days, by a group of former employees and their associates. We have refrained from commenting until now, but it’s time our voice is heard."


After confirming that the employees were fired on Saturday night, which the owners called "excruciating" for everyone, they wrote, "this recent episode leaves us deeply saddened and spent. We are imperfect, but we have given our all. It is our hope that some of you love our business too. We could use some of that now."


Aut Bar co-owner Keith Orr was one of several local restaurant owners who voiced support for Engelbert and Panozzo. When he read their open letter, he says he immediately felt "a complete understanding of their situation."


"Nobody wants to lay anyone off," he says. "(Engelbert) has proven herself after so many years to be community-oriented. I was sure there was no maliciousness intended, and that they preserved as many jobs as they could while still preserving the business."


The owners’ open letter was shared on Facebook on Tuesday, November 28 – the same day that DSFS re-opened for business as a more casual vegan restaurant.


Some in the community, including regular customers and other local business owners, voiced their support and stopped in to bring flowers or wine and offer hugs. Others who stopped by were angry about what they’d read or heard, and Engelbert offered in each case to have a conversation about what happened. Engelbert says it's hard to gauge if the restaurant's changeup has been successful so far.


"When it’s so cold, it’s not a great time for restaurants generally," Engelbert says. "But in terms of the business, we have managed to right the ship through a combination of getting our expenses in check and achieving higher revenues. We started getting five-star Yelp reviews, and the food’s rock solid."


DSFS' new image also involves cultivating a space for events, meetups, and music. One of the restaurant's most popular regular programs is Bluegrass Night on Wednesdays – picking up the slack for the beloved event’s original host venue, Circus, which is currently closed for renovations. But "lesbo bingo," a string quartet, guitarist Jake Reichbart, and more are booked for future dates.


Generally, the new approach feels more in line with what Engelbert and Panozzo want in their restaurant. According to Engelbert, DSFS’ original upscale concept "was inspired by people we hired. We decided to give it a try. … There are restaurants in town that do fine dining – that’s their thing, and they’re good at it. But it’s a hard market to get into, and our clientele – they like a more affordable price point. The people who eat in our restaurants, many of them come once or twice a week. Some come every day. But here, people were looking at it as a special occasion restaurant, and there wasn’t enough traffic."


Did the social media dust-up have a negative impact on business? It’s impossible to say. But Engelbert remains optimistic about DSFS and its future.


"We took away from this experience that we have a wonderful staff and community, that the possibilities are endless, and that sometimes you have to roll up your sleeves and work hard, but the results are worth it," Engelbert says. "Running a business means making tough decisions, but if you love your business, you will do what it takes to succeed."


Jenn McKee is a freelance writer with a long history of covering arts and culture in the Ann Arbor area. She also has a pair of blogs: The Adequate Mom and A2 Arts Addict.

All photos by Doug Coombe.