There were 7,621 cases of human trafficking reported in the U.S. in 2016, the last year for which yearly totals are available. In the United States, human trafficking tends to occur around international travel-hubs with large immigrant populations, notably California, Texas, Florida, and Georgia. Illinois ranked 9th out of the 50 States with 296 reported cases of human trafficking during 2016.
The issue of human trafficking has gained national attention due to cases involving high profile individuals such as prominent investor Jeffrey Epstein and New England Patriots owner Robert Kraft.
Human trafficking is prevalent in the hospitality industry, particularly at hotels. Businesses in the hospitality industry are prime territory for sex traffickers, because they can take advantage of the privacy and anonymity offered to guests, according to the U.S. Department of Homeland Security. Hotels and motels are obvious examples, but sex trafficking also can occur at theme parks, cruise ships, resorts, and nightclubs. The Polaris Project has recorded 3,300 cases of sex trafficking in hotels over a ten-year period. For this reason, federal and state specific laws are law are being implemented, which are taking aim at curtailing sex trafficking in the hospitality industry.
Under the Trafficking Victims Protection Act (TVPA), hospitality business owners can be held civilly and criminally liable for allowing sex trafficking to occur on their property. The law allows the federal government or a survivor to bring a case against the trafficker, but also against any entity that financially benefited from his or her victimization and knew or should have known that the activity was a violation of human trafficking law. Notably, under federal law, buyers of sex are considered traffickers. Therefore, a hotel can be held liable to the victim if an employee rents a room to a trafficker or a buyer and the employee knew or should have known that the room would be used for a commercial sex act State laws, such as a newly passed law in Florida, also directly impact the hospitality industry. This new Florida law requires hotels and other lodging establishments to provide annual training on human trafficking awareness to housekeeping employees and those who work at a front desk or reception area where guests ordinarily check in or out.
A concerted effort must be made at your place of business to eliminate sexual trafficking and mitigate your company’s liability. The first step is to train your employee on identifying general indicators of sex trafficking which include:
Your employee must also be trained on how to act when they suspect a situation of human trafficking. Employees are recommended to: 1) Do not at any time attempt to confront a suspected trafficker directly or alert a victim to your suspicions, (2) Call 9-1-1 for emergency situations—threats of violence, physical assault, emergency medical needs, etc. (3) Follow your corporate protocol, such as by notifying management and security. (4) Call 1-866-DHS-2-ICE (1-866-347-2423) to report suspicious criminal activity to federal law enforcement. Highly trained specialists take reports from both the public and law enforcement agencies. (5) Submit a tip at www.ice.gov/tips or get help from the National Human Trafficking Resource Center (NHTRC), call 1-888-373-7888 or text HELP or INFO to BeFree (233733).
This article is part of our Conference Materials Library and has a PowerPoint counterpart that can be accessed in the Resource Libary.
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]]>Scenario: Jane Doe, a guest, checks into the hotel and is sexually assaulted by John Thug, a fellow guest. Through discovery, it is revealed that, due to a series of mishaps and internal breakdowns, staff inadvertently allowed J. Thug to discover the room number of Doe and gain access while Doe was asleep.
During check-in and while preparing Ms. Doe’s electronic key, the front desk clerk loudly announced the room number.Shortly after Ms. Doe checked in, and after hearing the clerk reveal her room number, J. Thug approached the same front desk clerk, and having no reservation, requested the room adjoining Doe’s room.
After checking into his room, Thug waited until he heard Doe leave her room. As he exited his room, he noticed a housekeeping cart was located at the end of the hall. He approached the housekeeper who was cleaning a room, indicated he just departed his room and forgot to take his key. The second mistake occurred when the housekeeper improperly granted Thug access to Doe’s room where he proceeded to disengage the lock on the door adjoining his room.
Before leaving Ms. Doe’s room, J. Thug noticed an open water bottle and spiked it with Rohypnol. After exiting Doe’s room, J. Thug patiently waited until she returned and believed her to be incapacitated. He then spent the next several hours repeatedly sexually assaulting her.
Jane Doe filed a negligence action against the hotel and has made a demand for $25,000,000 in compensatory damages and $100,000,000 in punitive damages.
Witnesses who were deposed:
What is the Reptile Theory?
We like to believe we are run by logic and emotion. Sometimes we are. But when something we do or don’t do can affect – even a little – our safety or the propagation and safety of our genes, the Reptile takes over. If your cognitive or emotional brain resists, the Reptile turns it to her will. The greater the perceived danger to you or your offspring, the more firmly the Reptile controls you. From Reptile, Chapter 1, The Science.
Major axiom: When the Reptile sees a survival danger, she protects her genes by impelling the juror to protect himself and the community.
Manipulation at its best: as demonstrated in the deposition clips, witnesses who are unprepared, disinterested, or both, can be utilized by the Plaintiff’s attorneys to make all sorts of inflammatory admissions:
Faced with the above admissions, the Reptile asks jurors the following:
In a nutshell, the Reptile Theory is a way to inject punitive type testimony into the compensatory phase of the trial.
This article is part of our Conference Materials Library and has a PowerPoint counterpart that can be accessed in the Resource Libary.
HospitalityLawyer.com® provides numerous resources to all sponsors and attendees of The Hospitality Law Conference: Series 2.0 (Houston and Washington D.C.). If you have attended one of our conferences in the last 12 months you can access our Travel Risk Library, Conference Materials Library, ADA Risk Library, Electronic Journal, Rooms Chronicle and more, by creating an account. Our libraries are filled with white papers and presentations by industry leaders, hotel and restaurant experts, and hotel and restaurant lawyers. Click here to create an account or, if you already have an account, click here to login.
]]>II. What are Your Responsibilities as an Employer?
The law does not require that you meet the specific demands of the employee, only that you make “reasonable” accommodation when called to do so. We will explore numerous examples from various courts and the EEOC of what constitutes a “reasonable” accommodation under various circumstances. However, the trend is clear that courts will require employers to at least attempt to accommodate objectively reasonable requests that do not endanger coworkers or severely impact business operations. We will also explore some of the unfortunate extremes to which some cases have ventured when requiring accommodation.
The law does not require that you meet the specific demands of the employee, only that you make a “reasonable” accommodation when called to do so. We will explore numerous examples from various courts and the EEOC of what constitutes a “reasonable” accommodation under various circumstances. However, the trend is clear that courts will require employers to at least attempt to accommodate objectively reasonable requests that do not endanger coworkers or severely impact business operations. We will also explore some of the unfortunate extremes to which some cases have ventured when requiring an accommodation.
III. What Are Your Rights as an Employer?
The courts and the EEOC have recognized various legitimate limitations on an employee’s right to demand workplace accommodations. We will explore a few well-recognized legal exceptions to the accommodation requirement including safety concerns and undue hardship to the employer. We will also provide some of the “go-to” defenses when an employee makes objectively unreasonable accommodation requests.
IV. Striking a Balance between Your Rights and Responsibilities in a Politically Correct World
Social and news media often shape the public’s view of the world—and of employers. Often, employers feel the pressure to make accommodations to demanding employees when not legally required to do so. What are the ramifications of making such accommodations? If you give the employee an inch will he take a mile? We will explore the practical and legal effects of both enforcing your rights and the failure to take a consistent stand on certain demands for accommodation.
Authors
Barry Montgomery – Partner, KPM Law
Barry, a partner with KPM LAW, began his career in litigation before he graduated law school by working as an intern at the United States Attorney’s office where he had the opportunity to prosecute federal criminal cases. In his first case, Barry successfully prosecuted a business owner for manufacturing counterfeit currency and bank checks. It was at this point that he decided that he would spend his career in commercial litigation. Barry then began representing insurance companies in fraud and coverage cases as well as personal injury defense.
While Barry still represents insurers and their insureds in commercial litigation, he now focuses his practice on labor and employment law and litigation, as well as professional liability litigation. Barry believes that labor is the force that drives our economy and that an organization’s greatest resource is its employees. Barry believes that management and professional decisions can be vigorously defended in and out of court without compromising an organization’s brand or relationship with its workforce.
Brian A. Cafritz – Partner, KPM Law
Brian has been an invaluable member of the KPM LAW team since 1994, his commitment having helped solidify and expand the foundation of KPM LAW’s regional defense network. Brian primarily focuses his practice on the defense of Fortune 500 companies that operate under large self-insured retentions. With bar licenses in four jurisdictions, he has built a dedicated team and developed an efficient system that allows him to aggressively defend all matters in a regional practice that covers the entire mid-Atlantic region.
As Brian’s practice became more focused on Retail and Restaurant litigation, it became evident to him that the Plaintiff’s bar was more organized in sharing its resources, and so in 2006 – 2007, Brian co-founded the National Retail and Restaurant Defense Association (NRRDA) to promote the education and communication channels of industry leaders and counsel. Brian was elected to serve two terms as the association’s first president. Under Brian’s leadership, NRRDA continued to grow. Today, NRRDA boasts over 600 members and is seen as a leader in the Retail and Restaurant sector.
This article is part of our Conference Materials Library and has a PowerPoint counterpart that can be accessed in the Resource Libary.
HospitalityLawyer.com® provides numerous resources to all sponsors and attendees of The Hospitality Law Conference: Series 2.0 (Houston and Washington D.C.). If you have attended one of our conferences in the last 12 months you can access our Travel Risk Library, Conference Materials Library, ADA Risk Library, Electronic Journal, Rooms Chronicle and more, by creating an account. Our libraries are filled with white papers and presentations by industry leaders, hotel and restaurant experts, and hotel and restaurant lawyers. Click here to create an account or, if you already have an account, click here to login.
]]>The tied house and commercial bribery provisions are those most frequently cited by regulators reviewing an advertisement or marketing campaign.
It shall be unlawful for any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler, of distilled spirits, wine, or malt beverages, or as a bottler, or warehouseman and bottler, of distilled spirits, directly or indirectly or through an affiliate…
(b) “Tied house”
To induce through any of the following means, any retailer, engaged in the sale of distilled spirits, wine, or malt beverages, to purchase any such products from such person to the exclusion in whole or in part of distilled spirits, wine, or malt beverages sold or offered for sale by other persons in interstate or foreign commerce, if such inducement is made in the course of interstate or foreign commerce, or if such person engages in the practice of using such means, or any of them, to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products, or if the direct effect of such inducement is to prevent, deter, hinder, or restrict other persons from selling or offering for sale any such products to such retailer in interstate or foreign commerce: (1) By acquiring or holding (after the expiration of any existing license) any interest in any license with respect to the premises of the retailer; or (2) by acquiring any interest in real or personal property owned, occupied, or used by the retailer in the conduct of his business; or (3) by furnishing, giving, renting, lending, or selling to the retailer, any equipment, fixtures, signs, supplies, money, services, or other thing of value, subject to such exceptions as the Secretary of the Treasury shall by regulation prescribe, having due regard for public health, the quantity and value of articles involved, established trade customs not contrary to the public interest and the purposes of this subsection; or (4) by paying or crediting the retailer for any advertising, display, or distribution service; or (5) by guaranteeing any loan or the repayment of any financial obligation of the retailer; or (6) by extending to the retailer credit for a period in excess of the credit period usual and customary to the industry for the particular class of transactions, as ascertained by the Secretary of the Treasury and prescribed by regulations by him; or (7) by requiring the retailer to take and dispose of a certain quota of any of such products; or
(c) Commercial bribery
To induce through any of the following means, any trade buyer engaged in the sale of distilled spirits, wine, or malt beverages, to purchase any such products from such person to the exclusion in whole or in part of distilled spirits, wine, or malt beverages sold or offered for sale by other persons in interstate or foreign commerce, if such inducement is made in the course of interstate or foreign commerce, or if such person engages in the practice of using such means, or any of them, to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products, or if the direct effect of such inducement is to prevent, deter, hinder, or restrict other persons from selling or offering for sale any products to such trade buyer in interstate or foreign commerce: (1) By commercial bribery; or (2) by offering or giving any bonus, premium, or compensation to any officer, or employee, or representative of the trade buyer; …
TTB, with the cooperation in some states of state alcohol agencies, is conducting a widespread investigation of supplier and retailer activities involving one or more of the following activities: “pay to play” tied house violations, exclusive outlet, commercial bribery consignment sales, slotting fees, illegal sponsorship arrangements, and improper use of third parties, to name a few. TTB is conducting widespread industry interviews and is serving both formal and informal document requests directed at identifying these activities. TTB may prosecute a violation of the Act if the agency can prove an illegal inducement or requirement which resulted in exclusion; put another way, in order to meet its burden of proof, TTB needs to show that the inducement or requirement of the retailer resulted in the retailer purchasing the offending supplier’s products to the exclusion of other brands.
This article is part of our Conference Materials Library and has a PowerPoint counterpart that can be accessed in the Resource Libary.
HospitalityLawyer.com® provides numerous resources to all sponsors and attendees of The Hospitality Law Conference: Series 2.0 (Houston and Washington D.C.). If you have attended one of our conferences in the last 12 months you can access our Travel Risk Library, Conference Materials Library, ADA Risk Library, Electronic Journal, Rooms Chronicle and more, by creating an account. Our libraries are filled with white papers and presentations by industry leaders, hotel and restaurant experts, and hotel and restaurant lawyers. Click here to create an account or, if you already have an account, click here to login.
]]>Similarly to the United States, Canada has pre-sale franchise disclosure laws in six of the 10 provinces in the country, each of which require that a “franchise disclosure document” or “FDD” be provided to a prospective franchisee at least 14 days before a franchise agreement is signed or any consideration is paid in respect of the franchise. Due to the broad application of franchise laws, certain relationships, including licensed or managed hotel arrangements, may be considered “franchises” under Canadian law, even if not so intended as such or characterised under American law. Consequences for failures or errors of disclosure include statutory misrepresentation and rescission, including the right to sue for losses. Canadian franchise laws are historically strictly construed against franchisors, with case law supporting large damage awards against hotel franchisors because of technical errors in disclosure. While the substance of disclosure is relatively similar in both countries, Canadian disclosure obligations include an overriding “materiality” concept which can require a FDD to be modified on a deal-by-deal basis to account for deal-specific facts, including, in some instances, the content of a PIP, as well as an ongoing disclosure obligations in respect of “material changes” between the provision of the FDD and the execution of a franchise agreement. Certain exemptions exist from the obligation to make disclosure, including in Ontario and British Columbia, where the acquisition of the franchise exceeds $5M.
NO “AT-WILL” EMPLOYMENT IN CANADA
There is no “at-will” employment in Canada. No Canadian employer has the ability to terminate a Canadian employee’s employment at any time without cause and without notice, except within the first three months of an employee’s employment (provided the employer has reserved that right, in writing, when it offers employment to be able to exercise it).
Employers have an implied duty of good faith and fair dealing with their employees. Consistent with this is the implied obligation to provide an employee with “reasonable notice” of termination of employment where there exists no “cause”. This entitlement can trigger substantial severance payments and is one of the key reasons that Canadian employers typically enter into formal written employment agreements with their employees.
While employers are permitted to terminate employees’ employment without notice for cause, cause has a very high threshold under a Canadian law. Under employment standards legislation in every Canadian jurisdiction, written notice of termination or pay in lieu of notice is required for the termination without cause of any employee with three months’ service or more. The statutory requirements vary across the country, but generally equal roughly a week of notice or pay in lieu for each year of service to a maximum of eight weeks.
Employment standards legislation cannot be contracted out of; attempts to do so are deemed void. The Supreme Court of Canada has set aside an employment agreement where the employee agreed no notice of termination was required. In that case, the Court required the employer to pay an amount consistent with the common law obligation to provide reasonable notice (which is typically much greater than the minimum imposed by employment standards legislation).
The common law obligation to provide reasonable notice is based on a number of factors such as age, length of service, position performed, and prospects for securing alternate, comparable employment. While there is no “rule of thumb”, awards of one month per year of service, and more, are commonplace in Canada.
Reasonable notice generally includes not just pay, but benefits, commissions, most incentives or bonus, pension, deferred payments, car allowances, continued stock option vesting, etc. The employer is required to keep the employee “whole” for the period of reasonable notice and, if paying in lieu, is required to maintain all of the compensation and benefits associated with the employment relationship, unless there is very careful drafting in the applicable plan to prevent this.
CANNABIS LAW
As of October 17, 2018, it has been legal to cultivate, posses, acquire and consume cannabis and cannabis products across Canada. Permitted products include cannabis and cannabis accessories, but excluded, until October 17, 2019, “edibles” and other cannabis-infused products, such beverages and vaporizers. The legal framework which regulates cannabis consists of federal, provincial and municipal laws and regulations. Federal legislation focuses on public health and safety, with jurisdiction over such things as production licensing, packaging, labelling and promotion and taxation. Provincial legislation focuses on distribution, retail, as well as setting rules regarding where individuals may smoke cannabis. The decentralization of jurisdiction to the provinces has created a lack of uniformity across the country. For instance, consumption in public areas is prohibited in some provinces, while others, like Ontario, permit consumption anywhere tobacco smoking is permitted, with certain exemptions (such as vehicles or where children frequent). Certain provinces, like Alberta, have created rules to permit (at a later date) the regulation of consumption spaces (such as lounges or cafes), while others have not. In Ontario, British Columbia, and other provinces, cannabis can be smoked in designated guest rooms in hotels, motels and inns. Local or municipal governments may impose further restrictions which could limit provincial rules.
DESTINATION MARKETING FEE LITIGATION – KNUTH V. BEST WESTERN ET AL…
In Canada, destination marketing programs have been established by local tourism authorities, hotel associations or other bodies, for the purpose of promoting tourism in a particular city or region. These programs raise money for their promotional activities by soliciting hotels and other tourist service providers to remit a percentage or fixed amount of their revenues to the marketing program. These contributions may be funded by the hotels in whatever manner they see fit, but usually take the form of a percentage surcharge on the quoted room rate; surcharges, referred to as Destination Marketing Fees (“DMF”), are collected voluntarily by the hotels, and have no statutory basis.
DMFs are distinguished from lodging or accommodation taxes which are also levied in some provinces over and above applicable sales taxes. These are collected and remitted to provincial authorities. Generally, municipalities in Canada lack the authority to levy local taxes on hotel rooms.
In Canada, a consumer must be provided with clear, unambiguous notice of the DMF prior to the consumer entering into the agreement, particularly as the consumer will use the pricing information to determine if he or she will enter into the agreement. The DMF must be disclosed as a separate item/charge and must not be combined with applicable taxes or any other amounts payable by the consumer.
In the ongoing case of Knuth v. Best Western et al, the plaintiff made claims based on, among other things, the following:
In many instances the website/software platforms being used by certain hotels could not easily set out the DMF on a separate line at the point of booking. In some instances, it is claimed that the DMF was included with the tax giving the appearance of taxes being charged in excess of the applicable rate. Further many systems could not charge the correct tax on the full room rate such that the tax was on top of the DMF.
By way of update, certain of the franchisors in the action brought a motion for summary judgement to have the action dismissed against them on the basis that they are not liable for the actions of their franchisees. In August 2019, the Court dismissed the summary judgement motion. It is expected that the next major step will be certification as a class action.
LOYALTY PROGRAM LAW UPDATE
There are recently-enacted laws in Ontario (January 2018) and Quebec (August 2019) regulating loyalty programs. Subject to prescribed exceptions, the new laws prohibit the expiry of reward points due to the passage of time alone.
The key exceptions include:
It is anticipated that other Canadian jurisdictions will adopt similar loyalty specific legislation in the coming years.
CANADA’S ANTI-SPAM LEGISLATION (“CASL”)
In Canada, there are disclosure and consent requirements for the sending of a commercial electronic message (“CEM”). The sender must obtain explicit opt-in consent unless implied consent or an exception applies. This differs from the US “opt-out” model. The key exception is where there is an existing business relationship within a 2-year period immediately preceding sending of the CEM.
There are requirements for every CEM delivered, including:
MERGERS & ACQUISITIONS
Acquisitions of US hotels are almost always completed as asset deals unless there is a specific reason that an entity deal must be utilized. While asset deals are common in Canada, entity deals are sometimes utilized to take advantage of the lifetimes capital gains exemption. The exemption allows a Canadian individual who holds shares of a qualified small business corporation to a lifetime capital gains exemption equal to approximately CAD $850,000. There are a number of requirements in order to take advantage of this exemption including that the shares were held for a minimum of 2 years, the corporation was a Canadian-controlled private corporation, and that the corporation had during such time “active” business income. Further, land transfer tax is not payable in connection with a transfer of shares of a corporation but is payable on a transfer of assets which is further incentive to structure as a share deal.
AUTHORS
Jason Arbuck
Partner and Co-chair, Hospitality Group Cassels Brock & Blackwell LLP
jarbuck@casselsbrock.com
Frank Robinson
Partner and Co-chair, Hospitality Group Cassels Brock & Blackwell LLP
frobinson@casselsbrock.com
This article is part of our Conference Materials Library and has a PowerPoint counterpart that can be accessed in the Resource Libary.
HospitalityLawyer.com® provides numerous resources to all sponsors and attendees of The Hospitality Law Conference: Series 2.0 (Houston and Washington D.C.). If you have attended one of our conferences in the last 12 months you can access our Travel Risk Library, Conference Materials Library, ADA Risk Library, Electronic Journal, Rooms Chronicle and more, by creating an account. Our libraries are filled with white papers and presentations by industry leaders, hotel and restaurant experts, and hotel and restaurant lawyers. Click here to create an account or, if you already have an account, click here to login.
]]>A former server filed an action under the California Labor Code Private Attorneys General Act of 2004 (PAGA), seeking civil penalties on behalf of herself and other “aggrieved employees” for California Labor Code violations, including the failure to reimburse the cost of slip-resistant shoes. Plaintiff alleged a violation of Labor Code section 2802, which requires an employer to reimburse employees for all necessary expenditures incurred by the employee in direct consequence of the discharge of their duties.
Plaintiff argued that, because the restaurant required employees to wear slip-resistant, black, closed-toes shoes for safety reasons, such shoes should be provided free of cost or employees should be reimbursed for their cost.
The Court of Appeal, persuaded by the reasoning in an unpublished Ninth Circuit Court of Appeals decision, Lemus v. Denny’s, Inc., and guidance from the California’s Division of Labor Standards Enforcement (DLSE), held that section 2802 did not require the restaurant employer to reimburse its employees for the cost of slip-resistant shoes. Specifically, the Court held that the cost of shoes does not qualify as a “necessary expenditure” under section 2802.
In reaching its decision, the Court followed the reasoning in Lemus, citing a DLSE opinion letter, “The definition and [DLSE] enforcement policy is sufficiently flexible to allow the employer to specify basic wardrobe items which are usual and generally usable in the occupation, such as white shirts, dark pants and black shoes and belts, all of unspecified design, without requiring the employer to furnish such items. If a required black or white uniform or accessory does not meet the test of being generally usable in the occupation the [employee] may not be required to pay for it.”
Here, the plaintiff did not argue that the slip-resistant shoes were part of a “uniform” or were not usual and generally usable in the restaurant occupation. The restaurant did not require employees to purchase a specific brand, style, or design of shoes and did not prohibit employees from wearing their shoes outside of work.
Under California law, a restaurant employer must pay for its employees’ work clothing if the clothing is a “uniform” or if the clothing qualifies as certain protective apparel regulated by OSHA or California’s Division of Occupational Safety and Health (Cal/OSHA). Labor Code and Industrial Welfare Commission Wage Order No. 5-2001, governs the public housekeeping industry, including restaurants. Under Wage Order No. 5, uniforms must be provided and maintained by the employer when the uniforms are required by the employer to be worn by the employee as a condition of employment. “Uniform” includes “wearing apparel and accessories of distinctive design or color.” This section of the wage order specifically does not apply to protective equipment and safety devices regulated by the Occupational Safety and Health Standards Board.
On appeal, the plaintiff abandoned her alternative theory of liability that reimbursement was owed under provisions of Cal/OSHA, Labor Code sections 6401 and 6403, which require employers to furnish and provide safety equipment to employees.
The trial court had held that OSHA and Cal/OSHA provide than an employer is not required to reimburse employees for the cost of non-specialty shoes that offer slip-resistant characteristics, but are otherwise ordinary clothing in nature. However, the Court of Appeal ultimately did not decide the applicability of OSHA or Cal/OSHA. Likewise, the Ninth Circuit in Lemus v. Denny’s, Inc. did not address whether Cal/OSHA requires reimbursement of slip-resistant footwear.
After the decision in Townley, there remains a question of whether reimbursement for the cost of slip-resistant shoes could be required under Cal/OSHA for safety reasons. Under Federal OSHA regulations, employers must generally provide personal protective equipment at no cost to the employee. The regulation specifically includes an exemption for non-specialty safety-toe protective footwear, which the employer permits to be worn off the job-site. Employers are also not required to pay for everyday clothing, including street shoes and normal work boots. Under California law, if protective equipment is required by Cal/OSHA, the employer is responsible for paying for the safety equipment. There is no Cal/OSHA regulation equivalent to the Federal exemption for generic non-specialty shoes. While California employers have argued (and the trial court in Townley concluded) that the Federal exemption should control in California, the California Court of Appeal and Ninth Circuit have so far left that question unanswered.
Takeaways
Although we now have clarity that California Labor Code section 2802 does not require reimbursement of the cost of slip-resistant footwear, there remains the question of whether such footwear could constitute reimbursable protective equipment under Cal/OSHA safety standards. Although Townley and the Federal OSHA exemption provide some guidance for California employers, they are reminded that neither are necessarily binding or precedential. As such, it will be important for employers to track California caselaw in this area, as well as look out for Cal/OSHA guidance. In the meantime, employers are encouraged to periodically review their policies and practices for reimbursing employee business expenses to ensure compliance with California law, including Cal/OSHA regulations.
]]>While New Jersey is the first state to enact such a law, which will go into effect in January 2020, it follows a growing trend in cities throughout the country – particularly in Chicago, Miami, Sacramento, and Seattle – that have seen the passage of ordinances requiring panic devices for certain hotel employees, among other protections. Other cities, such as Las Vegas and New York City, have seen the introduction of panic devices in the wake of union negotiations. The introduction of panic devices will likely go beyond major metropolitan areas, however, as executives at some of the largest hotels have reportedly revealed their plans to provide panic buttons to their employees across the country by 2020.
If you have operations in New Jersey, you need to immediately familiarize yourself with this new law and take compliance steps. And if you don’t have operations in the state or one of the other areas with such a law, you should still be aware of this trend, as it not only presents some concepts for best practices in a hotel setting, but may soon arrive in your own area.
Coverage And Scope
The New Jersey Panic Device Law defines hotel to include not just hotels, but also inns, boarding houses, motels, and other similar establishments that offer and accept payment in exchange for rooms, sleeping accommodations, or board and lodging and that retain rights of access and control over their premises. Regardless of the type of “hotel,” the establishment must also have at least 100 guest rooms in order to be subject to the Panic Device Law. If your business has fewer than 100 guest rooms, compliance with the Panic Device Law is unnecessary.
The Panic Device Law defines an employee as one who performs housekeeping and room service functions on a full or part-time basis at a hotel for, or under the direction of, a hotel employer or any subcontractor of the hotel employer. The law therefore covers and protects hotel employees, contractors, and subcontractors, sweeping them together under an expansive definition of an employee.
The definition of an employer is as broad or broader and includes any person, including corporate officers and executives, who directly, through an agent, or another person (e.g., a staffing agency) employs or exercises control over a hotel employee’s wages, hours, or working conditions. Awareness of and compliance with the Panic Device Law is thus essential by directors, managers, supervisors, and anyone else who may exercise sufficient control over hotel employees.
Provision And Use Of Panic Devices
Employers of covered hotels must provide employees that work in a guest room by themselves with a panic device. Employers are prohibited from charging employees for the panic device and must purchase and furnish them at their expense. The Panic Device Law defines a panic device as a two-way radio or other electronic device that can be used by the employee to call for immediate assistance from a security officer, manager, supervisor, or other appropriate person.
Employees are permitted to use their panic device whenever they believe there is ongoing crime, an immediate threat of assault or harassment, or some other emergency in their presence warranting the use of their panic device. Once used, employees may stop their work and leave the area for safety and assistance.
Employers’ Duties When A Panic Device Is Used
Employers are forbidden from taking adverse action against an employee for using a panic device. After a panic device is used, aside from promptly responding to the call, employers must also:
Note an accusation against a guest to for “violence” – which is broadly defined to include sexual assault, sexual harassment, and other inappropriate conduct – toward an employee and put the guest’s name on a list and retain it for five years from the date of the reported incident, along with details of the accusation.
Report any alleged crime by a guest or other person to law enforcement and cooperate in any investigation by law enforcement.
Reassign the employee who activated the panic device to a different work area away from the accused guest’s room for the duration of the accused guest’s stay.
Notify employees assigned to a guest room where a reported incident has occurred of the presence and location of the accused guest named on the hotel’s list and provide them with the option of servicing the accused guest’s room with a partner or declining to serve the accused guest’s room for the duration of the accused guest’s stay.
If an employer later learns that the accused guest is convicted of a crime as a result of the activation of a panic button, the employer may prohibit the guest from staying at the hotel.
Programs For Employees
Employers must develop and maintain programs to educate employees about the use of panic devices and their rights in the event they use their panic devices. The programs should also encourage employees to use their panic devices. Written information may supplement, but not substitute, training programs for employees.
Information For Guests
Covered hotels must also inform their guests about panic devices in one of two ways. They may either require guests to acknowledge a panic device policy as part of the terms and conditions of checking into a hotel, or they may prominently place a sign on the interior side of guest room doors, in large font, detailing their panic device policy and the rights of their employees.
Collective Bargaining Agreements
The Panic Device Law provides a carveout for collective bargaining agreements. If a collective bargaining agreement addresses the issuance of panic devices to hotel employees or addresses employee safety in guest rooms and the procedures for reporting questionable conduct, the collective bargaining agreement controls and hotel employers are not required to provide panic devices to employees.
Penalties For Noncompliance
Hotel employers who fail to provide panic devices or respond as required when a panic device is activated are subject to fines of $5,000 for the first violation and $10,000 for each subsequent violation. The fines are recoverable by the Commissioner of the New Jersey Department of Labor and Workforce Development.
Next Steps For Employers
Covered hotel employers in New Jersey that are not governed by a collective bargaining agreement should begin taking steps to comply with the Panic Device Law and watch for regulations promulgated by the Commissioner, particularly since the Panic Device Law grants the Commissioner with the authority to develop regulations to facilitate its implementation.
Covered hotel employers should budget for panic devices and obtain a sufficient number of them, develop employee training programs, and update your terms and conditions or create signs for guest rooms regarding their panic device policies. Covered hotel employers should likewise review their handbooks and other policies to ensure cohesion with the Panic Device Law.
Hotel employers outside of New Jersey and cities with similar ordinances should be on the lookout for the adoption of similar panic device measures in their localities—or for their inclusion in collective bargaining agreements, if they are not there already. The more widespread introduction of panic devices seems all the more probable in the #MeToo era.
]]>What Are Predictive Scheduling Laws?
Predictive scheduling laws are generally straightforward. In short, they require employers to post employee work schedules a set number of days in advance of when the work is to be performed. Once posted, however, employers are penalized for making any scheduling changes.
In theory, these laws seek to balance respective interests between employers and employees—a balance that was recently addressed in the landmark California decision, Ward v. Tilly’s. In that case, the court assumed the role of the employee’s champion and explained that schedule predictability was an absolute necessity that allowed employees to plan around second jobs, make child-care arrangements, coordinate school schedules, or commit to social plans, among other things. Glaringly absent from this analysis, however, was the employer’s perspective and concurrent recognition that scheduling changes and fluctuating staffing needs are often caused by unforeseeable market realities such as inclement weather, employee call-outs, and unposted community events.
In practice, unfortunately, legislators have expressed wide disagreement over how to address this problem, causing many jurisdictions to take wildly different approaches. For example, in New York City, certain employers are only required to post schedules 72 hours in advance, with changes thereafter being completely prohibited. In contrast, San Francisco requires employers to post schedules not less than two weeks in advance. Once posted, however, any changes require the employer to pay the affected employee anywhere between one and four hours of additional “Predictability Pay,” depending on how last-minute the change actually was. As these examples demonstrate, legislators have yet to agree on any centralized model for predictive scheduling laws, creating a potential minefield for those employers that attempt to apply consistent scheduling practices throughout multiple jurisdictions.
What Industries And Jurisdictions Have Been Most Affected?
Since the first predictive scheduling law arose in San Francisco several years ago, other states and major U.S. cities have contributed to a precipitous rise in these laws. Places like Oregon, New York City, Chicago, Seattle, and Philadelphia have all since participated in this rising regulatory experiment by respectively proposing and implementing their own unique frameworks.
Simultaneously, other states have actively sought to combat the rise of these practices. In the wake of San Francisco’s law, states like Georgia and Tennessee quickly implemented legislation that prohibited their own major cities from enacting similar predictive scheduling laws at the local level, seeking to stifle an already-emerging trend.
To date, however, the retail and hospitality industries have taken the brunt of the regulatory force, with the vast majority of predictive scheduling laws targeting these industries exclusively. As justification for this disparate treatment, legislators have pointed to the disproportionate number of low-wage workers present in these industries who they believe warrant greater protection. For these employees, securing a reliable schedule through traditional means, such as direct negotiation, is far less likely. Accordingly, in these industries, the employer-employee tension between scheduling flexibility and predictably is at its zenith.
So What Should You Do Now?
Unfortunately, compliance with predictive scheduling laws is far from easy. Larger employers with locations throughout multiple jurisdictions tend to be the most affected, although even smaller employers can find themselves in a position that requires a full overhaul of their current staffing model. Accordingly, it’s important to keep a few points in mind.
First, you should audit your locations. The piecemeal framework of predictive scheduling laws means that you may have multiple locations subject to different predictive scheduling requirements. As a result, a centralized staffing model can quickly become outdated, or even worse, a liability. Location-specific policy changes may need to be made, and managers may require retraining on how to handle staffing shortages.
Second, avoid the related pitfalls. No employment law exists in a vacuum, and predictive scheduling laws are no exception. Implementing predictive scheduling models will often impact other aspects of your business and, in some cases, could create unforeseen liability traps. For example, in San Francisco, forgetting to tell your payroll company to separately delineate the “Predictability Pay” scheduling change penalty on your employees’ wage statements could saddle you with a host of unexpected labor code violations and class action demand letters—all for a simple oversight.
Third, consider novel and creative approaches. To address the rise of these laws, some large companies have implemented the use of scheduling apps. In addition to viewing pre-posted schedules, employees can use the apps to swap shifts with coworkers or sign up for unfilled shifts in upcoming weeks. Although, even without apps, voluntary schedule swapping and sign-up policies are both phenomenal ways to reduce, and even eliminate, the need for last-minute scheduling changes—all while boosting employee morale.
Conclusion
Ultimately, when it comes to employment policies, there is rarely a “one size fits all” approach. What’s right for one company may not be right for another. As a result, it’s important to keep up to date on the newest changes in both law and compliance strategies. In the modern day, employment laws are changing at an ever-increasing pace; if the recent rise in predictive scheduling laws hasn’t hit your state or city just yet, it soon may.
For more information, contact the authors at CCook@fisherphillips.com (415.490.9032) or AGuzman@fisherphillips.com (415.490.9028).
]]>Under the D.C. Human Rights Act (DCHRA), personal appearance is one of 20 protected traits for people that live, visit or work in D.C. Personal appearance is defined as the outward appearance of any person, irrespective of sex, with regard to bodily condition or characteristics, manner or style of dress, and manner or style of personal grooming, including, but not limited to, hair style and beards. To flesh this out, the D.C. Office of Human Rights, which administers the DCHRA, issued enforcement guidance in September 2017 to provide an explanation of this less understood protected category. It clarified that a person may not be discriminated against based on the individual’s actual or perceived “personal appearance,” which means employers may not refuse to hire someone, for example, because the individual wears a head scarf or has dreadlocks. The guidance document even provides an illustrative example of this. It states that, if Michael has a beard and applies for a job as a receptionist of a business office, where the job announcement requires applicants to have 3-5 years of experience and Michael possesses 5-6 years of experience as a front desk receptionist, the business employer cannot refuse to hire or consider Michael, a qualified applicant, because of his beard.
But, there are some limits to this rule. As the enforcement guidance makes clear, an employer can establish requirements for cleanliness, uniforms or other standards as long as the established standard is for a reasonable business purpose (e.g., for maintaining the health and safety of all individuals) and applied uniformly to everyone. This is often referred to as the “prescribed standards” exception, and is successfully argued by showing the following three elements: (1) the existence of prescribed standards; (2) uniform application of the standards to a class of employees; and (3) a reasonable business purpose for the prescribed standards. So, in our example, if Michael is hired, in most cases, the business employer may require that Michael adhere to the company’s established grooming standards along with all other employees, unless Michael has a religious reason for his beard. Unfortunately, however, the enforcement guidance, while certainly helpful, may have oversimplified this exception.
In the real-life context, employers have asked some tricky questions. What qualifies as a “reasonable business purpose”? How specific or broad should prescribed dress and grooming standards be? And what if we do not enforce the standards all the time because we have a lax enforcement policy or inadvertently miss a case or two? While advice from legal counsel can provide tailored answers to the first two questions, what is nearly certain about the last is that, if an employer does not enforce its dress and grooming standards, it is opening itself up to major legal risk. This is because, as described above, uniform application is a required element for employers to claim the “prescribed standards” exception. Furthermore, personal appearance discrimination claims are subject to the McDonnell Douglas burden-shifting framework that we described in a prior post. That is, if a plaintiff alleges employment discrimination through the use of indirect evidence, the plaintiff must show that: (1) she is a member of a protected class; (2) she suffered an adverse employment action; and (3) the unfavorable action gave rise to an inference of discrimination. One way for a plaintiff to demonstrate that an unfavorable action gives rise to an inference of discrimination is to present evidence of disparate treatment. This is often done by showing that she was treated differently than similarly situated employees outside of her protected class. Accordingly, if an employer does not enforce its dress and grooming standards consistently, it makes plaintiff’s case stronger, which is at least one reason why strict enforcement of such standards is so crucial.
Furthermore, although only a small number of jurisdictions extend anti-discrimination protections to personal appearance, this area of law is growing and is often intrinsically connected to other protected classes. For example, the New York City Commission on Human Rights (NYCCHR) issued new guidelines in February 2019 stating that employer policies on grooming and appearance that target, limit, or otherwise restrict natural hair or hairstyles may be unlawful and could result in a penalty of up to $250,000 per violation. This is because NYCCHR determined that black hairstyles are an inherent part of black identity, and therefore, should be protected racial characteristics. The guidance notes that protections extend to the right to maintain “natural hair or hairstyles that are closely associated with their racial, ethnic or cultural identities.” While the guidelines specifically focus on black communities, the protections extend to other groups, including those who identify as Latin-x/a/o, Indo-Caribbean, Native American, Sikhs, Muslims, Jews, Nazirites, and/or Rastafarians.
So what can employers do to minimize their legal risk and ensure they do not run afoul of any anti-discrimination personal appearance laws? As noted above, advice from legal counsel will assist in determining whether an employer’s business purpose is reasonable under the law, and whether its prescribed dress and grooming standards are written in a way that best shield the employer from potential claims. This is often done through a review of the employer’s dress and grooming standards in its employee handbook. Typically, a broader set of standards with legally protected carve outs (e.g., for religious and disability accommodations, health and safety concerns, etc.) is advisable. It is also prudent to enforce the standards uniformly and consistently. Other concerns, such as keeping the standards gender-neutral, should also be considered.
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