Supervisors press OLSE on SkyChefs investigation amid worker testimony alleging loss of health benefits

The Government Audit and Oversight Committee on May 20 heard testimony and an enforcement update about allegations that catering contractor LSG Sky Chefs (referred to in the hearing as SkyChefs) is failing to comply with San Francisco's Healthy Airport amendment to the Healthcare Accountability Ordinance.

Supervisor Rafael Mandelmann, sponsor of the hearing, told the committee his office had learned SkyChefs moved operations — he said as many as 300 food production positions — from SFO to a San Jose facility and argued the company was doing so to avoid the city's healthcare requirements. Mandelmann said the ordinance requires SFO employers to provide free, high-quality family health care to airport service employees.

Pat Mulligan, director of the Office of Labor Standards Enforcement (OLSE), said OLSE initiated an investigation and issued an investigative notice on April 16. "We have initiated the investigation," Mulligan said, adding that SkyChefs "have not fully cooperated with our investigation, and we have issued notice of violation for failure to cooperate with our investigation." Mulligan said OLSE has been denied access to the San Jose facility and has not received payroll documents for workers there; he said the office will proceed with audits and findings based on available evidence, worker interviews and public records.

Workers and union representatives told the committee they are losing access to affordable health care and, in some cases, seeing lower hourly pay after the move. Linda Fajardo, a SkyChefs production worker and member of Unite Here Local 2, testified about unaffordable insurance costs and said her coworkers — including parents and newborns — need the health benefits they fought for. Anand Singh of Unite Here Local 2 called SkyChefs' actions "unacceptable" and urged the committee to consider revoking the company's authorization to operate at SFO.

Supervisors including Haney and President Walton called the reported conduct "despicable" and urged continued enforcement. Committee Member Mandelmann moved to file the hearing so OLSE and the Board can continue follow-up; the committee voted to file the hearing unanimously.

What the committee heard: OLSE's investigation status, denial of access to the San Jose facility, worker testimony about benefit and wage loss, and calls from labor and supervisors for enforcement and potential contractual consequences with the airport.

Next steps: OLSE said it will continue its audit and may expand its timeline if it finds ongoing violations; the committee's filing of the hearing puts the matter on record for further Board consideration and follow-up.