Mercato Partners’ current labor dispute: What investors should know
Since 2022, Mercato Partners has been involved in an ongoing labor dispute with their workforce at a Texas restaurant housed under Mercato’s restaurant fund, Savory Restaurant Fund.
In 2022, employees at Via 313, a pizza chain then based in Austin, Texas filed for a union election due to a number of concerns about Savory’s business practices. These concerns were related to wages, as well as health and safety risks.
Workers have alleged risks including sewage leaks in food handling areas, elevated food storage temperatures, faulty equipment, and heat exhaustion among employees.
A union election was held in October 2022; however, election results were never certified due to a number of challenged ballots and Unfair Labor Practice charges pending a Board investigation.
In a March 2025 settlement, Savory paid a total of over $49,000 to employees who were terminated during the course of this dispute. In this settlement, Via 313 employees also agreed to a re-run of elections. On March 18, a wide majority of employees voted in favor of forming a union.
Rather than move forward with union certification and negotiations, Savory has now filed to oppose the favorable outcome of employees’ March 2025 union election.
Savory has also signed a renewed agreement with union-busting firm Labor Management Associates LLC, billed at $325/hour, despite widespread support for the union among employees.
This comes after paying LMA $101,201 for four months of contract work in 2022, according to Savory’s LM-10 Employer Report.
What do labor disputes mean for investors?
In 2024, AFT, a union representing 1.8 million workers in education, healthcare, and public services, published a report entitled Managing Labor Risks in Private Equity, created at the request of trustees from AFT members’ public pension plans. AFT notes that pension fund trustees nationwide have expressed a need to more thoroughly understand the specific investment risks related to labor management practices in private equity, as this information is often not shared with them.
In this comprehensive report, AFT examines labor disputes in 10 private equity firms across AFT member pension funds’ private equity allocations. AFT argues that protracted labor disputes can lead to long-term losses in value and contribute to wider economic damage, harming pension funds which “rely on a healthy economy and broad-based economic growth.”
The report calls for a clear labor standards policy that protects workers’ rights on the job, ensures security for their members’ pension funds, and contributes to overall economic stability. This comprehensive approach to labor policies is one that should include promoting unionization, negotiating union contracts, ensuring workplace safety, eliminating forced labor, and maintaining neutrality when workers unionize. This approach would ensure long-term gains through business strategies that “genuinely add value” rather than “increase short-term returns by increasing risk.”
Via 313 workers have demonstrated an eagerness to work with management to resolve the issues that have concerned themselves, the business, and Via 313's customer base.
However, Savory Management and Mercato Partners have yet to demonstrate any willingness to negotiate a union contract that respects the health and safety of their workforce and presents an economically sound vision for the future of their business. It is evident that a more serious and cooperative approach is needed to sustain the long-term health of Mercato’s business, their workers, and their investments.
“It shouldn’t require a fight to push private equity companies to follow the law and respect workers’ rights on the job. Poor workforce management practices in private equity harm American workers, harm our local economies, and expose investors to unnecessary risk—a colossal lose-lose for everyone except the private equity firms themselves.” -AFT
Sources and further reading
Managing Labor Risks in Private Equity, AFT, July 24, 2024
New AFT report on labor risk in private equity, Private Equity Stakeholder Project, August 6, 2024
Private equity's in the hot seat. Pension funds are turning up the heat. Arleen Jacobius, PI Online. April 15, 2025.
LM-10 Employer Report, Via 313, July 26, 2023.
LM-20 Agreement & Activities Report, OLMS, filed by Daniel W. Block, March 21, 2025.
Labor Unrest Ensues as Via 313 Fumbles Worker Appeal, Melanie Haupt, The Austin Chronicle, January 14, 2022.
Via 313 Union Effort Stymied by Busting Tactics, Lina Fisher, The Austin Chronicle, October 7, 2022.
Via 313 Pizza in Austin’s North Campus Neighborhood to Unionize After 3-Year Fight, Courtney E. Smith, Austin Eater. March 21, 2025.