Kimbal Musk defends employee support fund, pushes back on HuffPo story

BOULDER — The Kitchen and Next Door Eatery founder Kimbal Musk defended his company’s employee support fund after the recent publication of a controversial Huffington Post article  that accuses the Boulder-born restaurant chain of failing to distribute emergency funds to employees affected by the COVID-19 outbreak.

Emily Peck’s HuffPo piece claimed Next Door employees were not given access to the company’s “Family Fund,” which collects voluntary donations from workers’ paychecks to be used in times of crisis.

An unidentified former Next Door manager was quoted in the HuffPo story calling the fund “just a hoax.”  

The fund began in April 2018 as a way to support a Boulder employee who lost a child in a car accident. Over the years it evolved into a more structured program overseen by the Emergency Assistance Foundation, Musk told BizWest. 

“This is not a slush fund; this a very modest fund,” he said. 

At the start of the COVID-19 crisis, the Family Fund —  administered by Emergency Assistance Foundation Inc., a nonprofit organization approved by the U.S. Internal Revenue Service to manage Employee Hardship and Disaster Relief Funds —  had a balance of roughly $11,000, according to Musk.

The fund wasn’t built to serve as a safety net during a pandemic or as an alternative to unemployment insurance, he said, suggesting that the HuffPo piece implied that the fund was compulsory and meant to support large numbers of workers during a crisis. 

“The Huffington Post article, unfortunately, is an example for why the media isn’t a thriving industry anymore,” Musk said. “… Journalists should do their fact checking and [the Huffington Post] should be embarrassed.” 

Musk, an entrepreneur and younger brother of Tesla Inc.’s Elon Musk, founded The Kitchen Restaurant group, which includes Next Door Eatery locations and the upscale The Kitchen restaurant chain. The Kitchen has locations in Boulder, Denver and Chicago. There are Next Door restaurants in Fort Collins, Longmont, Boulder and the Denver metro area, as well as out-of-state operations in Indiana, Illinois, Tennessee and Ohio. 

In mid-March, the company announced that all eateries would temporarily close or shift to a takeout-only model.

“A nuclear bomb went off in our industry,” Musk said.

The Family Fund was previously available only to current team members and not to those who have been laid off as a result of the closures — one of the major criticisms of Musk and his company raised by sources in the Huffington Post story. 

In March, President Donald Trump declared a national state of emergency, which allowed the Family Fund to be converted into an Immediate Response Program, which relaxed IRS regulations and made the fund more flexible. Last week The Kitchen moved to expand the pool to include former employees and is awaiting implementation of this change by the Emergency Assistance Foundation.

Since the coronavirus crisis disrupted normal operations at Next Door Eatery locations, donations to the Family Fund are now being provided by customers and ownership, rather than employees, Musk said. Tips from carry-out deliveries are being rerouted to the fund and matched by the owners.

Between the start of the COVID-19 outbreak in March and April 10, the Family Fund has approved $27,600 in grants to 69 workers, according to data supplied by The Kitchen.

The fund “still won’t be able support everyone, but going forward there will be no difference between a furloughed worker and a laid off worker,” Musk said.

© 2020 BizWest Media LLC

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