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.

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.

The details of the horrific Mandalay Bay attack offer a clear example to the hospitality industry as to just why proactive – and often covert – security standards must be tested and implemented.  The name of the game is to detect, deter or neutralize an attack before it takes place. In order to do this, smart technology and keen intelligence gathering techniques must be deployed. Well-versed analytical personnel must have unfettered access to the intelligence and offer management their professional assessment as to the threat at hand.

We note here some of the suggestions we have provided in recent conversations with hotel security personnel or in hospitality sector security associations or meetings.  If implemented, these revised or updated protocols could further enhance security for guests and employees. But to be effective, they each must be studied by the hotel operator, assessed for potential legal challenges and training must be provided to employees.

Again, with the emphasis on being proactive and getting out in front of potential threats, consider the following measures:

• Ensure your hotel security personnel participate in any local or regional periodic security meetings with their peers from other hotel chains.  That is a great way to share intelligence on criminal or extremist trends affecting the tourism sector and hotels in particular. Even though a particular crime trend may not have reached your geographic area or if it is affecting only brands that do not reflect your  demographic, you still need to be aware of it and prepare for it. And don’t keep the intel to yourself-your staff needs to be aware and that includes employees at the worker-bee level.

• Ensure to provide meaningful and recurrent training to staff with frequent guest interface regarding possible indicators of suspicious activity.  Probably the most important line of defense here is the housekeeping staff, which enters guest rooms on a daily basis, often more than once. Staff should be trained to recognize the signs of potentially unsafe or illegal activity, such as telltale signs of human trafficking or prostitution.  The accumulation of several unmarked boxes, bags or suitcases inconsistent with the number of guests assigned to the room is something noteworthy as well. Any unusual or foul odor or the presence of an unknown substance in any area of the room should trigger a notification to security personnel.  Again, we are reminded of the saying “see something, say something”.

• Room entry when the “do not disturb” sign hangs on the outside of the guest room should not be interpreted as a mandate not to enter.  Each hotel operator will have to establish its own policy with regard to periodic staff entry and as to how long is too long before a knock or a call from the front desk is made.  Entry policy should be closely coordinated with the hotel’s legal counsel.*

*Key Point:  Consider adding a waiver or consent clause to your guest registration paperwork in which the room occupant specifically agrees to periodic entry by hotel staff to ensure the safety of all guests and employees.

• A clear “know your customer” policy should be established.  In other words, hotel security staff or employees at the operator’s corporate headquarters need to implement a cursory background check of certain arriving guests who may seem out of place in the establishment.  For example, if you are welcoming a 20 year old man or woman into your hotel and if the room is in the $400-$500 per night category, you may want to do a “Google” check or similar check on the name. The person has done nothing wrong so far and possibly never will, but in general, a 20 year old does not fit the demographic of a hotel charging that amount of money per night.  You may find nothing, but you may find that the person has had a series of run-ins with the law. That of course does not necessarily mean he or she should be excluded from the premises, but it’s a nice heads up to the staff.
  

• The use of check-in/check-out apps has to be the most frustrating technology out there for hotel security personnel.  It allows the guest to have virtually no interface with the hotel staff in that check in and out is performed electronically and billing is automatically charged to the credit card on file.  Room entry is achieved with a downloaded code or barcode, which the guest holds in proximity to a reader made a part of the exterior door lock. If you use this technology at your hotel, ensure that you DO have interface with the guest during his or her stay by knocking on the door occasionally or by placing calls to the room.

There are many other proactive ways to enhance security at hotels and large venues.  Various technologies are commercially available which permit iris scanning or facial recognition.  Of course, with the adoption of new techniques, some privacy is given up. Individual brands and properties will determine the right mix for their locations, based on customer demographics, prior incidents, crime and terrorism trends and importantly, the law.  Privacy cannot and should not be total in a hotel as guest and employee security and safety must be taken into consideration.

So, what is a spoofed website? In this scheme, a fraudster creates a fake website and/or email domain that looks legitimate, often copying a real website using logos, images and even the layout/content of the site. This phishing tactic usually asks the visitor to enter log-in credentials or personal details in an attempt to collect information used for identity theft. This tactic can also be used for other fraudulent activity. In the case reported by ARC, the fraudster used the fake website to appear legitimate to hotels and book stays using compromised credit cards.

Unfortunately, it can be difficult to spot a spoofed website, but there are a few signs to be weary of. First, check the web address. A spoofed website usually contains a misspelled word, extra punctuation or is excessively long. You should not only check for these signs in a web browser, but also any text linked to hyperlinks—hover over hyperlinked text to see the full URL before clicking. Another sign of a spoofed website is pop-ups. Sometimes spoofers direct victims to legitimate sites and use a pop-up window to collect personal information. Always use the website you are familiar with, have used previously without issues and have bookmarked. Don’t rely on a Google search. Review any results returned by searches and compare the URLs.

Now that you know how to spot a spoofed site, here are some tips to protect yourself if you feel like you may have landed on one:

• If you think you have found yourself on a spoofed site, scan the page for a Trust Seal. Many authentic sites use these badges issued by third-party security companies to show the site is verified, secure and safe. Please keep in mind that not every secure and authentic website, including Travel and Transport’s, marks their site with any type of “Trust Seal.” This is just one indicator of authenticity.
• Check the address bar for more details on the site. Oftentimes the company name is shown alongside the URL in the address bar. Another item to look for is a lock showing the site is secure as well as “https” in the URL. This is a good first step, but not always a complete indicator of a “trusted site.” HTTPS certificates are relatively easy for an advanced hacker to obtain.
• Anti-phishing software is another way to arm yourself against scammers. Many browsers have add-ons or plug-ins to help detect phishing sites. You can also utilize the site whois.com to determine when the website was created. This site helps determine if your own site has been spoofed.
• If you are unsure if you are on a spoofed website asking for login information, give a fake password. If you use a fake password and appear to be logged in, you are most likely on a spoofed site. If you’re fake password is rejected, you should still be leery and take some of the other precautions mentioned in this list.
• When in doubt, contact the company directly to verify the website.
• Lastly, if you think you have fallen victim to a phishing site, immediately contact your IT team and report the site to the local police.

With processes becoming more and more automated through digital and web processes, it is important to take a comprehensive look at risk management to include crime and corruption that takes place on the web. As Travel and Transport’s Chief Technology Officer, Tim Krueger, puts it, “In today’s world of an ever changing and increasing threat landscape, user awareness and training are essential elements to any modern security program. Individual diligence in identifying and avoiding potential scams and threats is often the first and last line of defense.” We hope you never have to use these tips, but keep them in your back pocket in case you ever happen upon a fraudster.

Sources:
https://archives.fbi.gov/archives/news/pressrel/press-releases/fbi-says-web-spoofing-scams-are-a-growing-problem
https://www.globalsign.com/en/blog/how-to-spot-a-fake-website/
https://www2.arccorp.com/support-training/fraud-prevention/fraud-alerts/fa01262018/
https://safety.yahoo.com/Security/PHISHING-SITE.html

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:

1. Duties that involve the exchange of money
2. Delivery of passengers, goods, or services
3. Duties that involve mobile workplace assignments
4. Working with unstable or volatile persons in health care, social service, or criminal justice settings
5. Working alone or in small numbers
6. Working late at night or during early morning hours
7. Working in high-crime areas
8. Duties that involve guarding valuable property or possessions
9. Working in community-based settings
10. Working in a location with uncontrolled public access to the workplace

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:

• Developing and posting a written policy statement about the employer’s workplace violence prevention program goals and objectives
• Conducting a risk evaluation by examining the workplace for potential hazards related to workplace violence
• Developing a workplace violence prevention program that explains how the policy will be implemented which would ideally include details about the risks that were identified in the evaluation and describe how the employer will address such risks. The policy should also include a system to report any incidents of workplace violence similar to a reporting mechanism found in a sexual or other unlawful harassment policy
• Providing training and information for employees including any risk factors and what employees can do to protect themselves
• Documenting workplace violence incidents and maintain those records

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.

Earlier this year, a Texas teenager, who was the unfortunate victim of human sex trafficking, filed suit in Harris County Texas against several well-known hotel chains as well various truck stop operators and the website “Backpage.com,” which was alleged to advertise and promote illicit sexual encounters. All businesses named were sued under the theory that these entities profited from the illegal sexual exploitation of a minor. This suit, along with a similar lawsuit filed last year in Pennsylvania, provides yet another cautionary tale to the hospitality industrythat the specter of human trafficking at one of its facilities raises significant concerns of civil liability to both the owner and operators of those facilities.

According to the Texas complaint, “Jane Doe,” alleges that she was involuntarily thrust into the shadowy underworld of human trafficking just prior to her 16th birthday. The suit claims that she was instructed by her trafficker to rent a hotel room, or have her exploiter rent a room, using payment methods which did not provide any identification to the hotel, i.e., a pre-paid credit card or cash. Once inside the room, Jane Doe maintains that she was sexually exploited by a “constant flow of male customers.”

Despite the warning signs raised by pre-paid credit card or cash payment, the complaint alleges that hotel management and staff failed to intervene, contact the police or otherwise prevent the sexual exploitation of minors at their properties. Essentially, Jane Doe contends that her continued sexual exploitation was caused when hotel management “turned a blind eye to the plague of human trafficking and the sexual exploitation of minors at their locations.”

Jane Doe filed her complaint utilizing a Texas law which creates liability for individuals or entities that intentionally or knowingly benefit from participating in a human trafficking venture for damages arising from such trafficking. This statute mirrors the federal Victims of Trafficking and Violence and Protection Act (TVPA) which creates civil liability for various entities, including hotels, restaurants, casinos, and bars, which “knowingly” benefit from human trafficking if it can be demonstrated that they knew or should have known about the illegal venture.

Significantly, liability under the TVPA is not restricted to hotels. Rather, as noted above, a trafficking victim may bring an action against “whoever” knowingly benefits from participation in a venture that they knew or should have known involved sex trafficking. Accordingly, businesses such as restaurants, casinos, bars, and nightclubs must take heed of the potential consequences of ignoring the signs of human trafficking.

Lawsuits filed under the TVPA, or a state counterpart, are likely to cause the hospitality industry much consternation and concern simply because of the significant potential monetary exposure and public relations/reputational risk associated with having a brand connected to human trafficking. The question thus becomes: what is a hospitality related business to do in order to properly shield itself from potential liability?

Since the legal standard is whether the business knew or should have known that human trafficking was occurring in connection with its business, it puts the onus on the business to be self-aware of what is occurring on its property. It is, therefore, crucial that a comprehensive and thorough anti-trafficking compliance program be implemented, including but not limited to, training hotel management and people working in specific departments, such as security, housekeeping, and the front desk, to identify and report human trafficking when they suspect that the illegal activity is occurring in their workplace.

One state has already taken action to ensure that businesses in the hospitality industry have a heightened responsibility in self-policing their properties.  In 2016, Connecticut became the first state to pass legislation mandating that all hotel workers receive anti-trafficking training. The training instructs workers on sex and labor trafficking, the legal responsibilities of lodging establishments and practical tools for identifying signs of sex and labor trafficking. The workers also learn how to deter traffickers, report suspected crimes and help victims connect with services. Although Connecticut was the first state to require mandatory training, it is anticipated that it will not be the last. In fact, there is currently a bill before the Florida legislature which would limit the liability for businesses that can demonstrate that they had training and protocols in place to identify trafficking.

The scourge of human trafficking is not going away and will, unfortunately, continue to be synonymous with the hospitality industry.  Accordingly, it is imperative that members of the industry proactively engage in anti-trafficking compliance and training in order to combat exploitation and reduce potential civil liability.

Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.

But rather than dwell on the seemingly endless armed conflict, it’s worthwhile to take a look at the hotel bombing and emphasize once again the critical need for hotel operators to implement effective and smarter security controls aimed at detecting and neutralizing non-traditional or “asymmetric” threats to the sector. It is not enough to erect barriers outside the entrance or to have guests pass through a magnetometer, however inconvenient that may be. A wholesale rethinking of hotel security practices is necessary. Such re-crafting of the process cannot be accomplished using a “one size fits all” approach; rather, a carefully calibrated protocol must be established and implemented for each property bearing in mind the threat environment in which the establishment operates.

Last September’s mass shooting at the Mandalay Bay Resort in Las Vegas was a clarion call for the hospitality sector to take a more proactive approach to security. In the case of Las Vegas, or other tourist and convention oriented cities in the US and Europe, current protocols need to be strengthened and non-traditional measures need to be adopted. A good look at who is checking in-what is he or she about and does the potential guest mesh with the established demographic-should be priority questions. In other words, if you operate a five-star hotel and charge close to $400 per night, should you be concerned about a 21-year-old man who checks in alone? What about a single female of the same age group? And a group of student back-packers?

The answer in our view is while no particular concerns may be apparent at the time of check-in, a person who clearly looks out of place in your property may be a good candidate for a little extra screening. What type of screening can be accomplished to allay concerns about the person? Consider adopting some of the following measures:

• While not possible in every case, a cursory background computer check (think “Google”) can reveal issues that a reservationist, front desk clerk or your hotel website cannot detect at the time of reserving. Has the person got multiple weapons arrests or has he or she been cited for domestic abuse? Has the person been of concern to authorities for any reason, but especially for making threats? You are not required to house each and every guest that has a reservation and you can unilaterally cancel a reservation for security concerns.
• Has the person requested some sort of non-routine access? For example, if the guest asks for a tour of the kitchen or the back office “just to see how it operates”, that is a flag that should immediately go up. Is this pre-operational “casing”? Is it an attempt to discover employee or security protocols? Is there a robbery being planned? Many questions should come to mind here. Clear disobedience of security protocols-for example, unauthorized access to the roof, electrical boxes or rooms, fire alarms or equipment-could be cause for immediate expulsion from the property.
• That “do not disturb” sign on the exterior door handle of the guest room is of concern if it is present for more than say 8 hours at a time. The guest could be amassing weapons, as in the case of the Stephen Paddock, the Las Vegas mass shooter. Or, there could be other illegal activity taking place therein, such as prostitution or drug dealing. Remember that frequent entries and exits of unregistered visitors to the room could be a sign of either. Ensure that hotel management knocks on the door periodically, even if the sign is present. You are not required to provide 100% privacy and safety concerns must take precedence.
• More frequent, overt or covert security rounds are a great source of intelligence on guest activity. Try checking in an “undercover” employee as a guest and allow him or her to mingle with others at the bar, in restaurants, at the pool. The astute person will be able to gather a good deal of information on guest activity. An overt addition to security could be the use of trained canines to detect explosive compounds or the chemical remnants of gunpowder, which is left on weapons, magazines and clothing as a by-product of shooting ammunition. If this had been done in Las Vegas, the presence of dozens of weapons and thousands of rounds of ammunition in the shooter’s guest room might have been discovered in time to prevent the tragedy.

Finally, if you do observe or otherwise detect suspicious activity, the hotel has the right to take quick action to ensure the safety of guests and employees. An innocent person who is expelled from the hotel might be able to raise a valid claim against the property, but a reasonable expulsion of someone who just does not seem “right” or is acting in a way incompatible with security may make the difference between a safe stay for all and a tragedy of immense proportions.

There is no hard and fast, right or wrong protocol in implementing non-traditional and proactive security measures at hospitality locations. Those that are most appropriate will be dictated by events on the ground, intelligence gathered, local and national law enforcement liaison and a good deal of thinking outside the box. The important thing is to not rely exclusively on barriers and door locks. As the threat evolves, so must your security protocols.

Security measures protect people and property from threats and dangerous conditions. This protection extends to all parts of the premises which the patron or employee may be reasonably expected to go and to those parts of the premises that the business has reasonably led them to believe they can go. Bars have a responsibility to provide reasonable protection to patrons and employees on the premises.

There are many threats to safety that may occur at a bar. The possibility of death and injury due to fire is an important issue that has to be effectively addressed. Proper policies and procedures should be established for the safe evacuation of all the occupants on the premises. Bars will have a large amount of cash on the premises. Liquor bottles may be stolen. Employees may be assaulted during a robbery or theft of liquor. Bottles and drink glasses could be used as weapons not only during a robbery or theft; but during a fight between patrons or an assault of an employee. In some circumstances, an employee can effectively handle a disruptive patron by using verbal and nonverbal (physical actions and demeanor) skills to diffuse the situation. An effective method is asking a disruptive patron to leave the bar. If the patron refuses, advise the patron that he/she has the opportunity to leave on their own or the police will be contacted to remove them from premises. Employees should be properly trained in the policies and procedures established by the bar to address the aforementioned threats and improper behavior that may occur on the premises.

Assaultive behavior can occur between patrons. Managers, waiters, waitresses, and bartenders may be assaulted by intoxicated or combative patrons. An employee policy should be in place identifying when the police and/or management should be contacted when there are violent or disruptive patrons. If security personnel are on site, the employee policy should identify when security personnel should be contacted.

Consumption of alcoholic beverages by everyone working for the bar during their work hours should be prohibited.

Security Personnel

Bars, taverns, restaurants, and nightclubs are usually the busiest on Thursdays, Fridays, and Saturdays. Most assaults occur on weekend nights. If assaultive behavior is foreseeable on the property, security personnel should be employed. Security personnel in bars are often referred to as bouncers, doormen, and floor men. The role of security personnel is to protect people and property. This responsibility includes patrons and employees.

The hiring, training and supervision of security personnel is an important aspect of providing effective security. One of the best methods of crime prevention is the obvious presence of security personnel. It is essential that security personnel be recognizable and conspicuous.

Proprietary and Contract Security

Security personnel can be proprietary or contracted. Proprietary security personnel, also known as in-house security, are employees controlled by the company that is providing security for its facilities and other property. They receive instruction and supervision from their employer. Contract security personnel are employed by an outside security firm. They provide security services to a business customer, but are managed by the contracted security firm.

Hiring of Security Personnel

Hiring of applicants should take place after a reasonable background check is conducted. This responsibility is one of the most important priorities for security management. The background check often includes requirements identified by a governmental entity. A business’s responsibility to its patrons is to provide effective security through proper hiring practices. The hiring of security applicants is a critical part of establishing and maintaining an effective security force.

Training of Security Personnel

Security personnel should be adequately trained prior to beginning, and continue to be trained once employed. If a security guard is required to be licensed by the city and/or state where he/she works, the security guard should be licensed. The importance of training cannot be overstated.

Adequately trained security personnel are essential to achieve management’s goal for employees to properly perform their duties. What management wants and how management wants it done is reflected in the training of security personnel. Without the proper response of the appropriate employees, the security measures in place are often ineffective with respect to the safety and security of the patrons and employees of a business. Security personnel should know what their responsibilities are and how to properly carry them out. By security personnel being properly trained, their actions will be in compliance to the policies and procedures of the business.

The importance of employees following proper training is essential to a proper response. Security personnel, not assigned to a stationary post, will move throughout the premises and observe patrons for reasonable behavior while they patronize a business establishment. It should be remembered that security personnel have the same rights as a private citizen. When appropriate, reasonable force should be used by security personnel. If two or more patrons are involved in a fight, they should be removed from the premises. An effective method is to eject the more aggressive patron or group of patrons first and wait until they vacate the area of the premises before ejecting the more passive patron or group of patrons.

Monitoring Performance of Security Personnel

The management of security personnel should be delegated to a knowledgeable and competent individual who understands the required safety and security responsibilities of the business. If the security personnel are contracted personnel, there remains a responsibility by the business owner or manager to monitor their performance. This responsibility can include assessment of contract employee performance, response of contractor management to the bar owner’s or manager’s concerns, and training. It is important to ensure the contractor is meeting contractual standards, but direct supervision of contract security should be carried out by the management of the contractor. When there is an issue involving contract security personnel, the bar owner or manager should communicate their concern through the management of the contractor.

The responsibility for supervising security guard performance should be executed by someone who moves throughout the premises. Security personnel should be properly hired, trained and managed. When security personnel’s actions are improper, it may be attributed to inadequate hiring, training, and/or supervision.

An effective strategy of controlling assaultive behavior is to position a security guard/security personnel at bar entrances and exits. This will control access into the building by confirming a patron is the proper age to enter and is in compliance with bar policy for entrance into the building. Additionally, the actions of patrons outside the front door and inside by the front door can be monitored. Crowding around the bar and on the dance floor creates the risk of patrons accidentally bumping into each other. This can lead to fights between patrons. These are areas of the premises which may need to be monitored if assaultive behavior is foreseeable on the property.

Bar security is important for the patrons and employees of the bar. It is essential that all workers on site are properly trained in the policies and procedures of the bar. An effective response to a threat, dangerous condition or improper behavior is required.

In the storms’ aftermath, businesses in the affected areas of Texas, Louisiana, Florida, Puerto Rico and the Virgin Islands should be vigilant in pursuing insurance recoveries. That entails assessing not only the physical damage to their property but also income losses stemming from flooded and blocked roads and bridges, interruptions of shipping and air transport, evacuations, and closures by civil authority.

Businesses suffering from supply chain disruptions, both in the areas of immediate impact and throughout the United States, should look to their property insurance policies for contingent business interruption coverage, triggered when policyholders lose revenue due to the effect of property damage on a supplier or customer.

Business interruption insurance covers businesses for losses in income stemming from unavoidable disruptions to their regular operations as a result of damage to property. In addition to coverage resulting from damage to the policyholder’s own property, “BI” coverage also may be triggered by circumstances including utility service interruption, a government evacuation order or a substantial impairment in access to a business’s premises. Many property policies also provide “extended business interruption” coverage that begins when the property is fully repaired and ends when operations are ramped up to their pre-disaster level—though that extension typically is limited to 60 days.

Contingent business interruption coverage is triggered when policyholders lose revenue after a property loss impacts one or more suppliers or customers. For example, businesses that rely upon specialty chemicals from the affected area may have to pay more for supplies, and companies that sell into the area, such as consumer products manufacturers and distributers, will suffer lost sales. While the business itself need not be physically damaged, it does need to have coverage for the type of damage that affected its suppliers, business partners or customers. For
example, a business must have flood coverage to file a contingent business interruption claim for losses triggered when a supplier is incapacitated by flood.

Whether the policyholder has the appropriate coverage for its own property that is needed to trigger contingent business interruption coverage can be a complicated issue. Many companies have flood insurance only for specifically designated flood zones. If the policyholder has substantial operations outside those zones, an insurance company might argue that it does not have the needed coverage to respond to a contingent business interruption loss stemming from floods in the Gulf or Puerto Rico.

Extra expense coverage applies to additional costs incurred by the policyholder as a result of damage to its property, and to costs incurred to mitigate economic losses. This coverage often is very broadly defined.

Contingent extra expense coverage applies when costs are incurred as a result of a business interruption caused by damage to the property of a supplier or customer. Like ordinary extra expense coverage, contingent extra expense insurance may be issued in one of two basic forms: 1) for extra expense to reduce loss and 2) for “pure” extra expense. The more common coverage insures only against extraordinary costs incurred to minimize or prevent a contingent business interruption loss. For example, following the destruction of a chemical manufacturing plant, a customer’s contingent coverage could be triggered by the need to purchase alternative ingredients at higher prices
than the lost supply.

POLICY PITFALLS: SUBLIMITS AND CONCURRENT CLAUSES

Many commercial property insurance policies provide different sublimits for losses caused by “flood” “storm surge” and “named storms.” How the policy defines these key terms can be critical in determining the amount recoverable for the policyholder’s loss.

In the aftermath of a major storm, damage caused by wind or wind-driven rain, storm surge or flood can be difficult to distinguish. For policyholders lacking flood coverage, insurance companies often invoke “anti-concurrent causation clauses” to deny any coverage at all if flooding occurred. Some state courts, however, have held that if the “efficient proximate cause” of damage is covered—that is the dominant cause—then the claim is covered. Also, anti-concurrent causation clauses should not be applied to property that is damaged by a covered cause, such as wind and rain, and later subjected an excluded cause, such as flood, which causes no additional damage. For this reason it is often important to determine the sequence of events and cause of damage to each item in the property loss claim.

CAREFUL COVERAGE EVALUATION

Calculating the full range of business income loss from property damage, disruption of the surrounding area, and closures by order of civil authority is a complex task. It begins with a careful evaluation of your insurance coverage, taking into account the interplay between the various coverages, exclusions and sublimits which may apply to your claim. Then, develop a plan to drive the claim adjustment to a prompt resolution. In that regard, make clear to the insurance companies the adverse impact that a delay in payment will have on your company, and document everything that occurs—or does not occur—in the adjustment process so the insurers will know that a record is being made of their claims handling conduct.

In the aftermath of disaster, insurance can be a vital lifeline—but it is one that has to be actively seized, and in some cases strenuously climbed. Understanding your full range of coverage and thoroughly documenting your sources of loss are essential to maximizing the recovery owed under your insurance policies.

Authors

Finley Harckham is a senior litigation shareholder in the New York office of Anderson Kill where he regularly represents and advises corporate policyholders and other entities in insurance coverage matters. His areas of particular focus include property loss, business interruption, directors and officers liability, construction, professional liability, aviation liability, cyber and general liability claims.

Marshall Gilinsky is a shareholder in the New York office of Anderson Kill. During his 20-year career representing policyholders, he has recovered hundreds of millions of dollars for his clients, successfully litigating disputed claims under a variety of insurance products, including property and business interruption insurance, commercial general liability insurance, errors and omissions insurance, and directors and officers insurance.

To address this threat, gig companies can take some relatively easy steps to prevent contractors and departing employees from taking confidential information in the first place, and to protect that information from use by competitors.

Defending Trade Secrets

Businesses in the gig economy create and retain a trove of information that could be valuable in the hands of competitors: customer lists, purchase histories, customer preferences, and all kinds of financial information. And that’s just scratching the surface. Most gig employers have policies restricting employee or contractor use of and access to such information, and most states have laws to protect employers against trade secret theft.

As of 2016, federal law also provides a civil cause of action for trade secret misappropriation.  However, in order to recover punitive damages or attorneys’ fees under the law, the Defend Trade Secrets Act (DTSA) requires employees or contractors to be given notice of whistleblower immunities in all agreements dealing with trade secrets and confidential information. Gig businesses should take advantage of the trade secret protections afforded by this new law by reviewing policies and agreements to ensure they comply with the DTSA’s various provisions.

Protecting Relationships

A gig business’s relationships with its customers, contractors, and vendors are among its most valuable assets. Some employees and contractors are expected to develop lasting relationships on behalf of the company. Well-drafted agreements with these individuals should include a provision prohibiting them from soliciting customers, contractors, and vendors – especially those with whom they interact directly ­– for a reasonable period of time. State laws regarding the validity of non-solicit agreements can vary and can be complicated. That said, an enforceable agreement can be a potent tool to prevent individuals from poaching customers, contractors, or vendors on behalf of a competitor.

Non-Competition Agreements

One of the more sweeping measures a business can take to protect its relationships and confidential information is to ask workers to sign a non-competition agreement. These agreements generally prohibit departing workers from joining a businesses that competes with the company in a specified geographic area for a limited amount of time after their tenure with the company ends. Though a handful of businesses use non-competition agreements liberally, we generally recommend that companies limit these restrictive covenants to higher-level positions. As with the non-solicitation agreements discussed above, state laws vary widely regarding the enforceability of non-competition agreements, so well-tailored agreements are crucial.

Conclusion

With the deluge of stories about data security, now is an opportune time to review and update employment and independent contractor agreements and policies to protect trade secrets, confidential information, and relationships. On this front, an ounce of effort on the front end can save a ton of headaches in the event that an employee or contractor decides to take the company’s valuable information or relationships to a competitor.