By the 1960s, virtually all of the more than 300 bakers in New York City’s bagel shops belonged to Local 338 of the Bakery and Confectionary Workers, which maintained closed shops and contracts favorable to workers. But then a mobster named Giovanni Ignazio Dioguardi—known as Johnny Dio—who had spent the past few years enriching himself by meddling in the kosher hot-dog business, decided to take on bagels. Jason Turbow describes what followed:
In 1966, a man named Ben Willner started the W&S Baking Corporation in the Bronx. Not only was he determined to run a non-union bagel shop, but he was among the first to embrace what would, over time, become 338’s most pressing issue: automation. . . . With [a mechanical bagel roller], Willner began pumping out more bagels in a shorter time with one unskilled worker than a traditional shop using a union-approved team of four; this allowed Willner to undercut his competitors’ prices substantially. With his bakery location sufficiently north of Local 338’s area of operations, he mostly flew under the union’s radar.
Dio soon showed up at the bakery to bandy about his wholesaling leverage—namely, the ability to get supermarket buyers to bend to his whim under threat of labor unrest. Before long, W&S bagels were being stocked on shelves around the city, and the bakery prospered.
Except that Willner’s weren’t the only mobbed-up bagels in town. In 1964, a shop called Bagel Boys had opened in the center of Jewish New York, on King’s Highway in Brooklyn. Among its principals was Thomas Eboli, otherwise known as Tommy Ryan, a capo in the Genovese crime family and a direct counter to Dio. Eboli was so powerful, in fact, that when Vito Genovese died a few years later, Eboli reigned for a time as the family boss.
Dio may have been a capo [as well], but his Lucchese-family backing was no match for the Genoveses. . . . Inevitably, W&S went out of business, with Willner’s machines ending up at Bagel Boys in clear violation of the union mandate. This was a problem. Eboli, with the Manhattan mafia behind him, made the concerns about Dio seem puny by comparison. A fight was in the offing. The main question was whether—and how—to enjoin it.
Ultimately, the union handled the mafia the same way that it handled nearly all extreme issues with management: full public confrontation. Nearly as soon as Bagel Boys opened its doors, Local 338 members showed up en masse to picket, distributing leaflets headlined, “PLEASE DON’T BUY,” with warnings that non-union bagels “jeopardize the hard-won standards of labor and inspection which the New York City public now enjoy.” Their most effective tactic in such situations was handing out free product in quantities sufficient to devastate business. It worked.