ADA/Standing
1. Brito v. Wyndham Hotels and Resorts, LLC, 2018 WL 317464 (D. Colo., 01/08/2018). Plaintiff is a paraplegic and requires the use of a wheelchair to ambulate. While at defendant hotel he encountered multiple violations of the Americans with Disabilities Act (ADA) that effected his use and enjoyment of the premises and sued. The hotel challenged plaintiff’s standing. To establish standing, a plaintiff must show, inter alia, that he suffered an injury in fact. To prove that, plaintiff must establish a likelihood that he will return to defendant’s premises. Factors a court considers are the proximity of the business to plaintiff’s residence, the plaintiff’s past patronage of the business, the definitiveness of plaintiff’s plan to return, and the plaintiff’s frequency of travel near defendant. In the complaint plaintiff stated he lives in the same county as defendant, he has frequented defendant hotel for “pleasure purposes,” he was a guest at the premises for a two day stay, and he alleges an intention to return within four months. This constitutes a personal stake in the outcome to constitute standing and avoid dismissal of the complaint.
Bankruptcy
2. In Re Lorraine Hotel 2017 LLC, 2018 WL 5288893 (N.D. Ohio, 10/22/2018). Plaintiff hotel filed a Chapter 11 petition in bankruptcy. The debtor’s sole asset was a 93-room hotel, of which 54 rooms were rentable. The debtor did not have casualty insurance covering destruction of, or damage to, the facility. The Bankruptcy Code, Section 1112(b) authorizes a judge to dismiss or convert a Chapter 11 case to Chapter 7 “for cause.” Cause exists where a debtor fails to maintain appropriate insurance resulting in risk to the estate. The court stated appropriate insurance coverage is of “paramount importance” in this case because of the single asset in the estate and the status of the business as a struggling downtown hotel. The court thus dismissed the Chapter 11 case and denied conversion to Chapter 7. Instead, creditors can pursue their state remedies.
Class Action
3. Valverde v. Xclusive Staffing, Inc., et al, 2018 WL 4178532 (D. Co., 08/31/2018). Plaintiff is an employee of Omni Hotel. Per the written employment policies of the management company that operates the hotel, a $3.00 processing fee is deducted from each paycheck plaintiff and other employees receive. Plaintiff objected and seeks certification of a nationwide class of plaintiffs. Defendant objected arguing the allegations were insufficient to show that plaintiffs from other states were subject to the same policy. The court noted that defendant management company’s policies are national and controlled centrally from its Colorado headquarters. They are contained in its written employment policies used nationwide. The court thus found the evidence sufficient to certify a nationwide class.
Contracts
4. Murphy Elevator Co., Inc., v. Coco Key Hotel & Water Resort, 2018 WL 1747924 (Ohio Appls Crt, 04/11/2018). The parties had a two-year elevator maintenance contract. After the first year and a half, the hotel failed to pay. The elevator company stopped performing and sued for breach of contract. The hotel argued that it should only be liable for the unpaid moneys up to the time plaintiff stopped performing. The court rejected this argument and granted the elevator company lost profits. Noted the court, an award of damages should put the injured party in the same position it would have been in had there been no breach.
5. Stanciel v. Ramada Lansing Hotel and Conference Center, 2018 WL 842907 (Mich. Appls, 02/13/2018). Plaintiff fell when entering a hot tub at defendant hotel. Plaintiff attributes the fall to a broken support bar leading into the tub. Plaintiff sued, and the parties purportedly agreed to a settlement. Defendant prepared a written settlement agreement and submitted it to plaintiff. The documents included a “Medicare addendum.” Defendant’s attorney told plaintiff’s counsel to advise if he had a problem with any of the wording. Plaintiff returned the signed documents to defendant but unilaterally crossed out language in the addendum. Plaintiff now seeks to enforce the settlement agreement. Defendant argued the agreement was not valid because defendant was not willing to agree to the settlement without the eliminated clause. Plaintiff argued the clause that was crossed out was not an essential term of the settlement agreement so there was still a meeting of the minds on all the essential terms. The court ruled the parties did not reach an enforceable settlement agreement. Case dismissed.
6. Claris, Ltd. v. Hotel Development Services, LLC, 2018 WL 3203053 (Crt. Appls, Ohio, 06/29/18). Per contract dated 8/2005, defendant agreed to build plaintiff a 4-floor, 122 room hotel which plaintiff planned to operate as a Candlewood Suites. The construction was completed in late summer 2006. In 2013 the hotel began experiencing water penetration when rain occurred. Plaintiff’s expert witness investigated defendant’s construction work of the hotel’s walls and identified five deficiencies. The expert excluded one of the five as the cause of the water problem but did not identify the extent to which the other four may have contributed to the damage. Therefore, plaintiff failed to establish that a breach of contract by defendant caused the leakage. Thus, the court reversed a jury verdict in favor of plaintiff and directed a verdict for defendant.
7. Couture Hotel Corporate v. US, 2018 WL 3076847 (Crt. of Fed. Clms, 06/21/2018). Plaintiff purchased a $9 million hotel near Nellis Air Force Base intending to participate in the off-base lodging business for visitors to the base utilized when on-base lodging is full. To meet the base’s requirements, plaintiff made modifications costing in excess of $1 million. When the work was completed, defendant advised plaintiff that, due to lowered demand, it was not adding any new facilities to its overflow listings at the time. Plaintiff sued, claiming that defendant’s refusal to permit plaintiff to compete for off-base services violated the Competition in Contracting Act, various associated procurement regulations, and a contract implied-in-fact. The court held for the government finding procurement rules were not violated, and a contract-in-fact did not exist. While the government representative talked to plaintiff about prerequisites to qualify for the lodging overflow business before plaintiff purchased the facility, documents provided to plaintiff clearly stated that a prerequisite to the government signing a contract were various inspections and approvals. Said the court, “[I]n negotiations where the parties contemplate that their contractual relationship would arise by means of a written agreement, no contract can be implied.” The complaint was thus dismissed for failure to state a claim.
Default Judgment
8. Travelodge Hotels, Inc. v. Durga, LLC, 2018 WL 5307809 (D. NJ, 10/26/2018). Defendant was a franchisee of plaintiff. Defendant ceased operating and plaintiff filed suit for damages for breach of contract. Plaintiff ultimately received a default judgment. Defendant now seeks relief from that judgment. He argued his failure to defend was excusable because he was traveling the world searching for experimental medical treatments for their daughter who suffers from a rare anoxic brain injury which worsened about the time of the lawsuit. Per defendant, this search “consumed” his life. The court granted the relief, noting that the defendant’s inattention to the lawsuit was excusable given the daughter’s illness.
Eminent Domain
9. North Carolina Dept. of Transportation v. Laxmi Hotels, Inc., 2018 WL 2207793 (05/15/2018). Defendant operates a Super 8 Motel. The Department of Transportation (DOT) sought to widen and improve the street on which the hotel was located. As a result of the work, the hotel lost several parking spaces. Also, due to a 15-foot tall retaining wall installed, visibility of the facility from the nearby thoroughfares was totally lost. The DOT claims it explained the extent of the work to be performed. The hotel’s president stated the DOT assured him the hotel would not lose any parking spaces and failed to explain the height of the retaining wall. As a result of the lost parking and street visibility, the hotel claims the DOT significantly underpaid for the taking since the loss of parking and visibility severely impacted the value of the hotel. The court agreed that the DOT did not adequately inform the hotel of the extent of the taking of hotel property. The court thus ordered the DOT to provide just compensation. The case was remanded for further calculation of appropriate reimbursement for the hotel.
Employment/Actual Employer
10. Frey v. Hotel Coleman, et al, 2018 WL 4327310 (7th Cir., 2018). Plaintiff worked at a Holiday Inn Express in Algonquin, Illinois. The hotel was owned by Hotel Coleman, Inc. which hired Vaughn Hospitality, Inc. to manage the facility. Vaughn Hospitality consisted of Michael Vaughn and his wife. Plaintiff’s paychecks came from Hotel Coleman; she was trained, supervised, evaluated, assigned, etc. by Vaughn Hospitality. Plaintiff claimed Michael Vaughn sexually harassed her and she filed a claim with the EEOC. She was thereafter fired and sued Hotel Coleman and Vaughn Hospitality for retaliatory discharge. The lower court determined Vaughn Hospitality was not plaintiff’s employer and dismissed the charges against it. Following trial against Hotel Coleman, plaintiff appealed Vaughn Hospitality’s dismissal. The appeals court reviewed several factors to consider when determining who is an employer, the most important being the right to control and supervise the worker. The court vacated the ruling that Vaughn Hospitality was not a joint employer and remanded the case. In doing so the court commented that the district court will “likely” conclude that Vaughn Hospitality was plaintiff’s employer.
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Authors
KAREN MORRIS
(585) 256-0160
Judgekaren@aol.com
Karen Morris is an elected Town Justice in Brighton New York, a Professor of Law at Monroe Community College (MCC), and an author. She was elevated to the title of Distinguished Professor, awarded by the Chancellor of the State University of New York.
She has written several textbooks including numerous editions of Hotel, Restaurant and Travel Law, the latest of which was published in 2017 by Kendall Hunt and won a Textbook Excellence Award from Text and Academic Authors Association. She also wrote two editions of New York Cases in Business Law for Cengage Publishing. In 2011, she published Law Made Fun through Harry Potter’s Adventures, and in 2017, Law Made Fun through Downton Abbey. She also co-authors Criminal Law in New York, a treatise for lawyers. She writes a column for Hotel Management Magazine entitled, Legally Speaking, and a blog for Cengage Publishing Company on the law underpinning the news.
Among the courses she has taught are Hotel and Restaurant Law, Business Law I and II, Constitutional Law, Movies and the Law, “The Michael Jackson Trial” and “O.J. Simpson 101; Understanding Our Criminal Justice System.” Her course offerings include some in traditional classroom settings and others online. She won the Excellence in Teaching Award in 1994, having been selected by her peers, and the Chancellor’s Award for Teaching Excellence in 2002, conferred by the Chancellor of the State University of New York.
DIANA S. BARBER
(404) 822-0736
dsbarber@gsu.edu
Diana@LodgeLawConsulting.com
Diana S. Barber, J.D., CHE, CWP is currently an adjunct professor teaching hospitality law and hospitality human resource management at Georgia State University in Atlanta, GA. In addition, she conducts a one-day workshop on contracting and risk management for the Events and Meeting Planning Certificate Program offered by The University of Georgia in Athens, Georgia.
In 2017, Diana became a co-author of Hospitality Law, Managing Legal Issues in the Hospitality Industry (5th Edition), along with Stephen Barth.
Ms. Barber is a recipient of the J. Mack Robinson College of Business Teaching Excellence Award in 2011 and was awarded 2011 Study Abroad Program Director of the Year by Georgia State University. In addition, Ms. Barber is the recipient of the 2010 Hospitality Faculty of the Year award and in 2012, received a Certificate of Recognition from the Career Management Center for the J. Mack Robinson College of Business. Ms. Barber is a member of Phi Beta Delta, an honor society for international scholars. Diana also completed her certification as a Certified Wedding Planner through the nationally recognized [the] Bridal Society.
Ms. Barber has recently launched a consulting/speaking company called LodgeLaw Consulting using her combined academic and hospitality legal skills; specializing in providing education to hospitality companies on preventative measures to reduce legal exposure, as well as a full range of legal services to hotels, motels, restaurants, event planning companies and private clubs. She has over thirty years of legal hospitality experience. Diana began her law practice as an associate attorney at King & Spalding in Atlanta, Georgia after graduating cum laude from Walter F. George School of Law at Mercer University in Macon, Georgia. She then spent over fourteen years with The Ritz-Carlton Hotel Company, LLC serving as vice president and associate general counsel. She is a member of the State Bar of Georgia, G.A.H.A., and the Georgia Hotel & Lodging Association (“GHLA”).
]]>First party property coverage is for damage to a policyholder’s own property, not for damage caused to the property of others. First party property coverage comes in two basic types: Named Perils Policies and All-Risk Policies. First party property coverage policies are where most policy holders find their business interruption coverage.
Business interruption coverage typically covers physical damage at an insured location that results from a covered peril and causes business income loss. There are two types of business interruptions: Partial and Total. In the last 15 years, many more policies cover partial interruptions. These policies will pay for lost income (after offsets for cost avoidance) that would have been earned during the period of restoration. The period covered is until the premises are or should have been restored to operation. Also, a financial allowance is often available to hire an outside CPA to calculate the loss.
Guest Liability Claims
The most common types of hotel guest liability claims are: slips and falls, exposure or contact with something that injures, being struck by or against something. These three causes account for more than half of all hotel guest liability claims. Such claims are often covered by a comprehensive policy sold as Commercial General Liability (CGL) insurance.
Third party coverage in the form of CGL insurance is coverage for a policyholder’s liability to others. This coverage can pay for the cost of lawsuits brought against the policyholder. If a claim is potentially covered and not excluded by the policy, the insurance company will pay for a lawyer to defend the policyholder. If a claim is actually covered, the insurance company will also pay the policyholder’s liability after trial or settlement.
A CGL policy has a limit of liability. For a policyholder facing a claim, there are usually two limits that are relevant: 1) the “per occurrence” (sometimes “per claim”) limit; and 2) the“aggregate” limit. Note: defense costs are usually outside the limit of liability.
CGL policies typically require that the policyholder give prompt notice of a potentially covered claim and that the policyholder cooperate with the insurance company in its investigation of the claim and its defense of the policyholder. Insurance companies sometimes threaten to deny coverage if they do not get all the cooperation they want. But there are limits on the extent of the policy holder’s duty to cooperate: there is no duty to cooperate after a denial of coverage and a defense under a reservation of rights can limit the extent of the duty to cooperate. Policy holders should be mindful of privilege issues as well. CGL policies have exclusions from coverage that apply in certain circumstances.
Workers Compensation Claims
The most common type of workers compensation claims are: being struck by or against something, slips and falls, and manual materials handling. These three causes account for more than two-thirds of all workers comp claims. The insurance available for such claims is usually confined to workers compensation insurance. A policyholder can reduce workers comp claims with the following techniques: perform pre-employment checks/physicals; limit housekeepers to cleaning 15 rooms per day; require employees to use equipment and procedures that reduce injuries (mattress lifters, light vacuum cleaners, proper work shoes, cart load limits); implement are turn to work program.
Conclusion
The most common claims in the hospitality industry usually have corresponding insurance coverage that will soften the blow. Assess your risk and make sure you have the right coverage to manage it. If you have difficulties with an insurance company after a claim, seek advice and counsel about how to proceed.
About AndersonKill
Anderson Kill was founded in 1969 on the principles of integrity, excellence in the practice of law, and straightforward solutions to complex legal issues. The firm’s attorneys approach engagements aggressively, and have earned a reputation for combining corporate polish with pugnacity. Based in New York City, the firm also has offices in Philadelphia, PA, Stamford, CT, Washington, DC, Newark, NJ and Los Angeles, CA, but the attorneys travel around the country and around the world to handle all types of matters. Anderson Kill attorneys work together, leveraging creativity and legal and business acumen to deliver cost-effective resolutions to clients’ problems. Many of the firm’s professionals are recognized experts in their practice areas, leaders and active participants in professional associations, and are frequently invited to speak to business organizations.
Types of Policies that May Respond
Insurance for losses caused by disasters such as Sandy can be provided under several different types of insurance policies. This coverage is not only provided under the ordinary “property” policy. It also may be provided under other policies, such as those providing coverage for “environmental” losses, “maritime” losses, and “warehouse” losses. Thus, it is important for an insured to review all of its policies in order to determine the extent of its coverage. Many property insurance policies cover losses to real property caused by all perils. Some policies cover all causes of loss not expressly excluded. Because of the breadth of coverage afforded by an “all risk” policy, the burden of proof shifts to the insurer to show that the loss is not covered, once the insured demonstrates it has suffered a loss.
Coverage for Real and Personal Property
First-party property policies generally provide insurance for “direct physical loss of or damage to property.” Traditional losses under first-party property policies involve tangible property, including buildings, permanently installed machinery or equipment, inventory, and fixtures. They may also involve personal property owned by the insured that is used to service and maintain buildings and premises, such as fire extinguishing equipment. Most property insurance policies also insure personal property. This coverage usually is provided under an “unscheduled personal property” provision and typically provides coverage for unscheduled personal property that is “usual or incidental to the occupancy of the premises” or “used by an insured while on the described premises.”
Exclusions
There are many possible causes of loss stemming from a natural disaster such as a hurricane: wind, wind-driven rain, storm surge, flooding, power outages, orders by civil authority, and looting—just to name a few. In some cases, more than one cause may have contributed to an insured’s losses. An insured needs to carefully assess its policies and the precise cause(s) of its particular loss before it characterizes that cause. Different characterizations can have significant impacts on the deductibles and sub-limits of liability. Casually labeling a storm as a “hurricane” or a “flood,” either internally or externally may be inaccurate in the context of specific losses and negatively impact coverage, particularly because damage may have taken place before or after the storm was designated as a “hurricane” and because “flood” definitions vary.
Making a Claim
Insurance policies typically impose on an insured obligations that must be satisfied to collect insurance. In seeking coverage, many businesses may overlook, or not be aware of, their duties.
To preserve coverage, insureds should recognize and perform these duties. While an insurer may waive its right to insist on performance, insureds should proactively seek to comply with
coverage obligations. They may include: (i) providing prompt notice (often “as soon as possible”); (ii) cooperating with the insurer’s investigation; (iii) submitting a sworn statement in proof of loss; and (iv) giving testimony at an examination under oath.
Many property insurance policies contain a contractual limitations period (that is, a contractual statute of limitations). It is thus extremely important that insureds take all appropriate steps to ensure that suits, if necessary, are filed in a timely fashion. Unfortunately, insureds may not find clear answers and may have to initiate litigation to preserve their rights given possible disputes over which law controls (e.g., the law of the jurisdiction where the insured is headquartered and the policy was brokered, or the law of the jurisdiction where the loss was suffered).
]]>CASE MANAGEMENT
Once a complaint is received by your claims department, the first cause of action is to review the facts alleged in the complaint and assess the information contained. Is there an existing case in the company’s files? Or is it the first time your company is hearing about this incident? The company should try to identify all the named defendants and which of the defendants are insured. What are the legal causes of action alleged in the complaint and what facts support the allegations?
INVESTIGATION.
After the preliminary assessment of the case, the company should gather all the relevant information including all the possible witnesses, crime grid statistics, police reports, incident reports, any documents/reports as to other incidents, security information, retrieve any surveillance footage (save enough –recommended an hour before and an hour after), assess lighting on the property, interview security personnel, if any, etc. It is important to understand that at this point it is possible that the only source of information is the complaint. That is why it is essential to gather all the relevant facts in connection to the incident as quickly as possible.
In this stage, it is essential to identify any potential security liability issues at the premises. Retaining a security company early on to assess the premises may not be a bad idea. A security company will evaluate the reasonableness of the security measures all ready in place based on the crime grid statistics and what they show. The important thing in this phase is getting on the offense and creating your own narrative.
EVALUATION
This process includes an assessment of the possible liability and damages issues related to the plaintiff’s claim. Before deciding on a successful litigation plan, the company must understand the possible ramifications of each cause of action, and the likely results. What are the available defenses and the chances of a successful outcome based on what information is available. To succeed in a negligence claim a plaintiff must prove (1) the existence of a legal duty; (2) a breach of that duty; (3) proximate cause of the plaintiff’s damages by defendant’s breach;and (4) damages. Proximate cause had two components: (1) foreseeability and (2) cause-in-fact. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex.2004).
In cases of liability arising after a crime is committed on the premises, it is necessary to understand the issue of foreseeability. Generally, a foreseeability analysis includes matters such as the imminent harm, the existence of prior similar crimes and the totality of the circumstances.
For example in Florida, in a premises liability case a property owner is generally under no duty to exercise any care to warn or guard against the harmful acts of a third party unless that third party’s harmful behavior is reasonably foreseeable. And although not dispositive, a showing that of no prior incidents can shed a light on the difference between whether an accident “is merely possible and whether it is reasonably foreseeable.” Las Olas Holding Co. v. Demella, 228 So. 3d 97, 104 (Fla. 4th DCA 2017)
In Texas, the courts compare the narrowed criminal history of the premises with the crime in question based on the five factors: proximity, publicity, recency, frequency, and similarity.See Flanagan v. RBD San Antonio L.P., 04-16-00761-CV, 2017 WL 5615567(Tex. App. Nov. 22, 2017).
LITIGATION PLANNING
A litigation plan is a mutually agreed upon plan between claims professional and defense counsel to implement the resolution plan. Although it must identify all the agreed upon steps to achieve the resolution plan, it is not a start to finish all-encompassing plan, but a living document built in phases.
After a litigation plan is agreed upon, ask counsel to estimate time expenditure necessary for that portion of the litigation plan. The budget should track the litigation plan and include costs for any experts that are used during that portion of the litigation plan.
]]>Retailers use a variety of tactics to battle this epidemic, from low-tech options such as offering rewards to employees who turn in thieves, to high-tech systems that can, for instance, monitor transactions to reveal issues that managers would normally be unable to detect. Yet unscrupulous employees remain undeterred, and will forever try to beat the system.
Even more upsetting is that catching an employee red-handed on video sliding product will not necessarily prevent them from bringing a wrongful termination claim against you. Many individuals, even guilty ones, feel compelled to try to clear their name through litigation. Although you would likely win such a suit in the end, the expense and time involved can be hundreds of times the amount of the theft, and might sway you to instead negotiate a frustratingly unfair settlement.
In order to maintain consistency, there is usually no choice but to terminate employees who engage in dishonest or even suspicious behavior. But if you or your managers were to make innocent mistakes during what should be a legitimate termination, you could find yourself facing a lawsuit. Worse, you could learn that your mistakes gave the lawsuit legs because it opened you up to exposure to an individual who stole from your company.
In this issue, we’ll look at some common mistakes that have resulted in otherwise unassailable terminations going south in court, and step-by-step solutions to prevent the worst-case scenario from unfolding.
The Investigation
In virtually every employment lawsuit arising from a termination for wrongdoing, the first step of the termination process—the investigation—becomes the most critical when scrutinized in front of a jury. It’s even more important when theft is involved. An allegation of theft is a powerful accusation and one that should never be taken lightly. While ordinarily you bear no burden of proof at trial, the jury will often look to you to prove theft beyond a reasonable doubt. Thus, the employee’s first tack in a trial will be to attack the quality of your investigation.
The Appropriate People Should Conduct The Investigation
There are many important missteps to avoid. First, at least two individuals should be involved in your investigation and, optimally, one should not be personally acquainted with the subject. This will help avoid claims that the allegation was trumped-up against an employee by a hostile or biased investigator. For example, an employee might claim that they were framed for theft by a manager for refusing earlier sexual advances. Using several investigators might shield such an accusation from gaining traction.
Make Sure The Accused Tells Their Tale
You must allow any employee being investigated to tell their story and include the account in your record of the investigation. Otherwise, a jury may think the employee was railroaded. The investigation must be thorough, and your investigator should never limit questioning to the witnesses identified by the accused when there may be other individuals with relevant knowledge.
Follow Your Own Internal Policies
If your company has a protocol for investigations, it must be followed to the letter. Juries demand that employers follow written procedures. Failure to do so can serve as evidence of “pretext” (a justification for a course of action that is found to be false) and could defeat your efforts at winning the case on written motions, rather than going all the way to trial.
Make Sure Your Witnesses Provide Their Own Testimony
It is important for witnesses to write their statements in their own handwriting and using their own words. Nothing tanks the credibility of a witness faster than when they don’t understand the meaning of words used in “their” written statement when testifying on the stand.
Preserve Records And Recordings
Another concern arises when a company acts as if it will never hear from the employee again once they depart the workplace following a termination. Even if you obtain a written confession of theft, it will be no substitute for a complete investigative file. Your investigator must organize and store all the records of the investigation for future use. Nothing should be destroyed.
If you plan to use business records or recordings that are ordinarily destroyed in accordance with your company’s record retention and destruction protocol, they should be moved from their usual location and preserved. Just as video footage of an employee pocketing a twenty is solid gold in a court, not having that video footage is solid gold for the plaintiff in an employment trial. If the video is missing, no explanation will overcome a jury’s assumption that you did not want them to see the video for some nefarious reason. Likewise, if an investigator reviews evidence, such as financial reports, stored on a computer, they should create copies of these records to be included in the investigation file.
Catching The Thief
The method used to catch thieves is another aspect that can result in liability. For example:
Because of factors like these, it’s important that you take several steps while attempting to catch an employee on suspicion they are stealing.
Destroy The Expectation Of Privacy
First, every employee should sign an acknowledgment that they understand they have no privacy rights in regard to those items they choose to bring on the premises. While not required by federal law, you should also have your employees acknowledge and consent in writing that they are under video surveillance while in all public and employee-only spaces at your store (not bathrooms or other private spaces). This will prevent them from bringing a successful invasion of privacy claim in the future.
Set Expectations For Investigations
At the outset of any investigation into alleged theft, the accused employee should be made aware that participating in company investigations is mandatory. Provide them a written notice that refusal to cooperate may result in termination.
Create And Enforce Policies Related To Company Assets
Finally, you should expressly advise all of your employees regarding your policies pertaining to the protection of company assets. Instruct them that violations of the policy may lead to their immediate termination without any finding of intentional wrongdoing.
The Termination Meeting
The termination meeting should not be the first time the accused is informed that they are suspected of malfeasance. However, even if you have done some legwork into the matter and feel like you have a rock solid case before talking with the suspected thief, you should still consider your plan for carrying out the disciplinary action.
Consider A “Suspension Pending Investigation”
Regardless of any benefit to keeping the employee in the dark about your suspicion while you conduct a covert investigation, and even if termination is essentially a foregone conclusion at the time of your interview with the accused, you should still hold off on making a termination decision and from communicating that sort of message during that first interview. It is far better to suspend the employee pending the outcome of the investigation. Many times the employee will not return for a follow-up meeting and can be terminated as having abandoned their job. There are far fewer facts to argue when an employee is terminated on these grounds.
Your Words Matter
How the termination meeting is to be conducted depends heavily on the strength of your evidence. If all the signs point to theft but you don’t necessarily have anything that is conclusive, you should not use terms like “theft,” “dishonesty,” or even “suspicion of theft” as reasons the employee is being terminated. This does not mean you cannot terminate the employee, but accusing an individual of a crime is per se defamatory in many jurisdictions, and you may be required to prove in court that the employee did, in fact, commit a crime. Instead, language centering on your lack of trust in the employee—“we are terminating you because we have lost confidence in your ability to perform your job up to our expectations”—is much less likely to be considered defamatory.
Focus On Your Policies, Not The Criminal Code
Another way to couch your justification for termination if you are less than 100 percent certain of the employee’s guilt is to cite a violation of your company policies and not any allegation of criminalwrongdoing. In this scenario, you should tell the employee that you have not reached a conclusion as to their culpability for a crime, but that the termination is because proper store procedures were not followed.
Stay Tuned For Part Two
Terminating employees for the reasons stated in this article may not prevent the employee from securing unemployment compensation, but as we’ll discuss in Part Two of this article, fighting unemployment compensation is overrated. In the next issue of the Retail Update, we’ll look at other problem areas in terminating for theft, including when—and when not—to call the police.
For more information, contact the author at EHarold@fisherphillips.com or 504.522.3303.
]]>Hotel safety protocols
Scene I
Exterior: London, England. Upscale major branded hotel. End of the year.
Interior: A conference is being set up.
Most of the conference is ready to go; we just need to email the hotel and request they present some safety and security measures for our conference attendees at the beginning of the conference. The hotel owner agrees but suggests sending this information to the guests prior to arriving for the conference. We rapidly agree and are shown some of the most thorough policies and procedures we have ever seen. The attendees greatly appreciate having this information pre-conference.
End scene I.
Scene II
Exterior: Convention Destination City, USA. Upscale major branded hotel managed by a third party. End of the year.
Interior: A conference is being set up.
Before the conference prep is complete, we speak to the owner about presenting safety and security protocols for the hotel at the beginning of the conference. We were advised that the hotel did not have such protocols in place and, in fact, that this information had never been requested by a meeting planner before.
End scene II.
As amazed as we were with the information provided by the London Hotel, we were just as dumbfounded by the response of the U.S. hotel. Given the challenging safety and security climate today, every hotel needs safety and security protocols that it is willing to share with conference hosts and attendees. Just as importantly, meeting planners need to request the information be provided to their attendees.
We are not suggesting that a hotel share its internal security response systems or all of its security methods. Hotels should be sharing just what the attendees, who are unfamiliar with the property, need to know so they can respond quickly in case of an incident at the property. This information includes emergency exit locations, safe rooms in the occurrence of a natural disaster and how to dial emergency services from the in-room phone.
As an aside to this, just as meeting planners and corporate travel buyers are ramping up their vetting of hotels from a safety and security perspective, hotels should be vetting the conference prior to entering an agreement to host the event.
Your hotel, employees and guests all benefit from strategically crafted incidence response protocols. We encourage quick development of these procedures before an incident happens.
Authors
Paige Tidwell – Marketing & Social Media Assistant, HospitalityLawyer.com
Paige Tidwell is a junior at the University of Houston, Conrad Hilton College of Hotel and Restaurant Management. She is seeking a Bachelor of Science in Hotel & Restaurant Management with an emphasis in Sales & Marketing. In addition to working for HospitalityLawyer.com, Paige works as a teaching assistant for two professors at the Hilton College where she works with students of all levels. Raised in both Baton Rouge, Louisiana and Houston, Texas, Paige naturally developed a passion for food and people. Her interest in hospitality was cultivated at a young age when she and her dad would cook for their church groups. In her free time, Paige enjoys trying new places to eat with friends and going to the gym.
Stephen Barth – Founder, HospitalityLawyer.com
Stephen Barth, author of Hospitality Law and coauthor of Restaurant Law Basics, is an attorney, the founder of HospitalityLawyer.com, the annual Hospitality Law Conference series, and the Global Travel Risk Summit Series. As a professor at the Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, he teaches courses in hospitality law and leadership. In addition to legal and risk management insight, Stephen specializes in communicating the importance of Emotional Intelligence in leadership roles; and has provided valuable insight to many companies including The Methodist Hospital System, Best Western Hotels & Resorts, Dine Equity, Business Travel News and Aramark. His fun, fast paced presentations provide practical information and solutions to enhance your personal and professional life.
]]>Here are five pointers for businesses who believe they are on the brink of a lawsuit:
Joe Arellano’s five tips originally appeared in an article titled, “What to do when you’re about to get sued,”in the October 13, 2017, edition of the Portland Business Journal.
]]>As mentioned in that blog, OSHA does not have a specific standard governing workplace violence but incidents may potentially be cited as a violation of the general duty clause. Typical examples of employment situations that may pose a higher risk of workplace violence incidents include but are not limited to:
Some jurisdictions such as New York have enacted legislation requiring public sector employers to develop and implement programs to prevent and minimize workplace violence. Although the New York law is limited to public sector employers, it can provide all private sector employers a good roadmap on what an effective workplace violence prevention program should include. Generally speaking, employers should consider:
In addition to OSHA issues, workplace violence could also expose businesses to liability in other areas such as vicarious liability for worker conduct based on a respondent superior theory, negligent hiring and negligent retention and also have potential workers’ compensation implications. Of course, the most important issue is simply the health and wellbeing of the employees.
]]>Joint Employment
A little over a year ago, we wrote about the concept of joint employment and its impact on the retail industry, particularly as it related to franchisors and franchisees. At the time of publication (August 2016), the National Labor Relations Board was taking a very expansive view of the concept of joint employment, meaning more companies could potentially be targets for union elections and collective bargaining by individuals with whom they had no direct employment relationship.
With the advent of the new administration, however, the Department of Labor withdrew the previous guidance and its overly expansive view of joint employment. Congress also began work on a proposed law that would scale back the new standards to a less expansive legal test. Then, in December 2017, the newly constituted National Labor Relations Board overruled a 2015 decision that had expanded the concept of joint employment, returning the analysis to a traditional and reasonable interpretation.
Specifically, the Board held that two different companies would be considered joint employers for purposes of the National Labor Relations Act (NLRA) only when each entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine. This was a welcome change for businesses that had operated under these standards for thirty years.
These changes do not, however, signal an end to the joint employment doctrine. To the contrary, even after retreating to the more conservative joint employer standard, the NLRB concluded that the two employers involved in the specific case were joint employers under the narrower standard. Nor do these changes under the NLRA change the law in every arena. Retailers will continue to see plaintiffs in employment lawsuits attempting to add them as defendants under a variety of laws. There is more than just one joint employment standard. Two examples of this doctrine are also found under the Fair Labor Standards Act (FLSA) and Title VII.
Joint Employment Under Wage And Hour Law
The FLSA – the nation’s primary wage and hour law – expressly recognizes the concept of joint employment. The regulations interpreting the Act provide that “a single individual may stand in the relation of an employee to two or more employers at the same time under The Fair Labor Standards Act of 1938 . . . .” When determining whether two entities are joint employers under the FLSA, courts consider the economic realities of the relationship and apply a multi-factor test known as the “economic realities” test. For the most part, the various economic realities tests rely on the traditional common law test for employment with various economic considerations incorporated.
These economic considerations focus primarily on financial dependency. In other words, courts look to see whether the employee depends on the alleged employer for his economic livelihood based upon the parties’ actual working relationship. Whether or not the parties intended to create a joint employment relationship is irrelevant for purposes of the FLSA.
If a joint employment relationship is found to exist under the FLSA, both employers are responsible for compliance with the Act. For example, if a temporary employment agency supplies an employee to your company but fails to pay proper overtime compensation, the temporary agency and your company could both be held liable for the amount of overtime pay owed to the employee.
Joint Employment Under Discrimination Law
There is no clearly defined standard for determining whether a joint employment relationship exists for the purposes of Title VII, which is the primary federal antidiscrimination law. Nevertheless, for the purpose of Title VII liability, courts treat independent entities as joint employers if they share or co-determine matters that affect the essential terms and conditions of employment. Generally, the key issues examined by courts are whether the alleged employer has the right to hire, supervise, and fire employees.
It is important to note that a joint employment relationship is not always necessary for a finding of joint liability under Title VII. Federal regulations written by the Equal Employment Opportunity Commission (EEOC) provide that an employer may also be responsible for the acts of nonemployees with respect to sexual harassment. The EEOC will consider the employer’s degree of control and other legal responsibility with respect to the conduct of the nonemployee. Thus, regardless of whether an actual joint employment relationship exists, so long as you have some control over a contingent worker, you should take immediate corrective action if you become aware of harassing conduct.
Direct Causes Of Action
Furthermore, there are also employment-related claims that can be brought directly against you by individuals on your worksite who are performing employment duties for another employer. These claims generally arise either from direct interactions between your employees and the vendor’s employees at the worksite, or from communications between you and a vendor concerning employee performance.
Tort claims under state law are the most common source of these liabilities. For example, let’s say a worker loses their job because of negative information you reported to the direct employer. That worker might bring a defamation claim against you. This could easily arise from a situation where you accuse the individual of theft or some other criminal conduct (which could be considered defamation per se). In fact, even if you do not communicate negative information, but simply advise the direct employer that the individual is no longer welcome on your premises, the employee could bring a claim against you for intentional interference with a contract. While the premises for and viability of these claims differ among states, they do provide a means by which nonemployees can seek to punish the company that, in their minds, cost them their jobs.
Individuals may also have claims based on the conduct of one of your employees. For example, if your employee makes derogatory comments to the individual, a claim for intentional infliction of emotional distress could arise, and there is little doubt that the plaintiff’s attorney will name your company as a defendant. While one of the most difficult torts to prove, such allegations can pull your company into costly litigation.
Independent Contractors
Another problem area exists when contracting directly with an individual for services pertaining to functions commonly performed in the business. If your company identifies such an individual as an independent contractor, and therefore makes no withholding from their pay, you may run afoul of tax laws, as well as workers’ compensation, wage and hour, and unemployment insurance laws.
There is no single test for determining independent contractor status. Rather, the definition varies depending on the legal issue and the enforcement agency involved. For instance, you will find different definitions and tests for independent contractors in the IRS Code, the state unemployment insurance codes, federal and state wage hour laws, and state workers’ compensation statutes.
In the retail world, the question of whether to designate an individual as an independent contractor appears most often in situations that call for part-time employees. For example, if your store hires a janitor to clean the store twice a week, one of your managers might assume the individual is an independent contractor because they are not working full time. However, the number of hours an individual works is generally less important than the type of work being performed. Here, cleaning is a task for which most retail employees have some responsibility to oversee, which might categorize that individual as an employee in the eyes of the law. It is much safer to avoid the question by simply classifying the janitor as a part-time employee who is paid on a W-2 hourly basis.
Our Advice
No one can stop an individual from filing suit, no matter how frivolous. So your first step should be to obtain whatever protections are available before a suit is ever filed. If contracting with a company whose employees will be performing work on your premises, it is critical to negotiate for indemnification. While this won’t prevent your company from getting sued, it will put the burden of defense and associated costs on the contracted company.
Next, never sign a contract with a labor agency without a thorough review of the agreement. Oftentimes these contracts are written to assign responsibility to the retailer, indemnifying the labor provider for any event occurring on the premises that gives rise to litigation. Additionally, employment practices liability insurance policies should be reviewed with an eye toward whether they cover employment-related claims made by individuals who are not your direct employees. It’s important for your company to have this coverage.
When contracting for services, another important piece of the puzzle is to make sure the vendor supplies onsite supervision. While it isn’t necessary for these supervisors to be onsite 100 percent of the time, they should be visiting the workplace to check on their employees’ performance and to address any issues with a particular employee.
Once protections are in place, there are internal measures you should address. In-store management must understand that they are not to fill the role of supervisor to the other company’s employees. You need to conduct training identifying the individuals who fall into this category and the necessary procedures to follow for handling problems associated with these individuals. There should also be a stop-and-check mandate before a manager asks to have another company’s employee removed from your premises. While there will certainly be times when an individual’s misconduct means such action is appropriate, supervisors are often unaware of any risk in removing another company’s employee, and therefore act with little thought.
Conclusion
Hiring employees is not easy, and using another company to handle the administrative aspects of hiring can certainly be beneficial. But before traveling this road, you should take stock of where issues might arise and be prepared to address those risks.
For more information, contact the author at EHarold@fisherphillips.com or 504.592.3801.
]]>Some plaintiffs’ lawyers have found a lucrative niche by engaging the services of “testers” – private citizens who go from business to business looking for ADA violations. The law does not require claimants to notify a business of alleged violations so they might fix the problem prior to filing a lawsuit; hence, many businesses are caught off guard when served with the lawsuit. Worse, they will spend thousands of dollars in attorneys’ fees to resolve a case when the cost of actual compliance is very low. In fact, after the costs of enforcing the technical requirements of the law are paid and the lawyers receive their fees, the plaintiff often receives no damages for the case.
A 21st-Century Twist On The ADA
A modern twist on these standard ADA cases is becoming increasingly prevalent. Now people are using this same section of the ADA to bring allegations that business websites are inaccessible to those with disabilities. No longer do testers need to actually visit a brick-and-mortar establishment, but can merely surf on the World Wide Web looking for those businesses with websites that are not accessible for those with disabilities.
In 2010, the U.S. Department of Justice (USDOJ) issued an Advance Notice of Proposed Rulemaking on the Accessibility of Web Information and Services. The purpose: “to establish requirements for making the goods, services, facilities, privileges, accommodations, or advantages offered by public accommodations via the Internet, specifically at sites on the World Wide Web (Web), accessible to individuals with disabilities.” Although the comment period closed in January 2011, the USDOJ has still not published clear guidance or final regulations for the private sector. The latest news suggests that will happen sometime in 2018. For now, though, the lack of clear policy has left the field wide open to unfettered litigation.
The bad news is that the delay in the regulatory process has not slowed the torrent of ADA lawsuits against businesses for alleged failure to provide equal access to web-based services. This means that your hospitality business can be sued by someone who is simply surfing for a lawsuit. You should take steps now to ensure your company’s website is reasonably accommodating those with disabilities.
What You Can Do To Stop The Surfing Suits
Some of the more common website accessibility issues affect individuals with vision or hearing impairments and those who are unable to use a mouse and must navigate with a keyboard, touchscreen, or voice recognition software. Those with visual impairments may need special software to magnify the content of a page, have it read aloud, or to display the text using a braille reader. For those with hearing impairments, the issue is often that audio content on the website does not include closed captioning, or that images do not include captions. You may need to build your website to properly interact with any adaptive software or technology designed for accessibility purposes.
Fortunately, the Web Content Accessibility Guidelines (WCAG) exist to provide web designers with standards for making digital content more accessible to those with disabilities. The USDOJ has made it increasingly clear over the last several years that it considers a website “accessible” if it complies with the standards of the WCAG 2.0 AA. The agency has used this standard in settlement agreements and consent decrees with businesses it believes to have violated the ADA. There is speculation that this will be the standard adopted for the private sector in 2018.
If your company website posts menus, accepts orders, permits customer reviews and testimonials, takes reservations, provides addresses and directions to brick-and-mortar locations, accepts job applications, includes FAQs, has email or chat features, or your business has any other online presence, you should consult with your web designer about ways to make these aspects accessible to those with disabilities. It is both the right and the legal thing to do, and it could save your business the unwanted expense and stress of litigation.
For more information, contact the author at MAnderson@fisherphillips.com or 504.529.3839.
Want to read more about the ADA? Check out these articles:
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