Category Archives: Labor Issues

by | October 7, 2011 · 3:10 pm

Hospitality Industry Employee Risks: California Supreme Court To Determine Whether "Non-Exempt Employees Are Entitled To Uninterrupted, Off-Duty Meal Periods Of 30 Minutes For Every Five Hours Worked"

“…At issue in the case is whether California employers must ensure that their employees actually take their meal and rest periods or merely make them available. Guidance is also anticipated regarding the time in the workday in which meal and rest periods must be taken and whether or not legally-compliant meal and rest period policies can protect an employer against class actions even when these policies are unevenly enforced…”

The California Supreme Court will hear oral argument in Brinker Restaurant v. Superior Court (Hohnbaum, et al., real parties in interest) on November 8, 2011, according to the Court docket issued this week. The Court generally issues decisions within 90 days after completion of oral argument and submission of post-argument briefs, if any. A decision is expected by mid-February, 2012.

The decision is extremely important to California employers because meal and rest period claims have been the basis of hundreds of class action lawsuits in California. The Court’s decision could make it more difficult for plaintiffs to bring these claims as class actions, or, depending on the ruling, could establish rigid guidelines which may foster more class actions. Either way, California employers and plaintiffs class action lawyers alike have eagerly awaited this decision since the Supreme Court took up the case in October 2008 and look forward to receiving guidance from the high court.

Under California law, nonexempt employees are entitled to uninterrupted, off-duty meal periods of at least 30 minutes for every five hours worked. While there are certain limited exceptions to this rule (such as a revocable written waiver of the meal period in limited circumstances), employers are required to compensate employees for on-duty meal periods. In addition, California law assesses employers a penalty equal to one hour of pay at the employee’s regular rate for every day there is a meal period violation.

For more:  http://hotellaw.jmbm.com/2011/10/labor_brinker_case.html

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by | October 5, 2011 · 12:36 pm

Hospitality Industry Employment Liability Risks: "Employment Practices Liability Insurance" Does Not Cover Lawsuit Brought By EEOC According To A Federal Court; Insurance "Claims" Limited To Suits Brought By "Employees"

“…A federal court in Tennessee recently ruled that an employer’s employment practices liability insurance (EPLI) did not cover a $2.7 million settlement of a lawsuit brought by the EEOC… because the policy limited “claims” to proceedings brought by employees, and the EEOC was not Cracker Barrel’s employee…”

 The specific language in the policy defined a “claim” as “a civil, administrative or arbitration proceeding commenced by the service of a complaint or charge, which is brought by any past, present or prospective ‘employee(s)’ of the ‘insured entity’ against any ‘insured.’”

After 10 Cracker Barrel Old Country Store employees filed charges of race and/or sex discrimination with the EEOC, the EEOC sued Cracker Barrel under Title VII. Cracker Barrel eventually settled the underlying EEOC lawsuit, entering into a consent decree obligating it to place $2 million into a settlement fund. In addition, Cracker Barrel incurred more than $700,000 in defense costs.    

Although Cracker Barrel gave proper written notice of the EEOC lawsuit to its carrier, the Court ruled that Cracker Barrel was not entitled to recover any of the $2.7 million under its EPLI policy. The Court held that the language in the EPLI policy did not extend to the EEOC lawsuit because the policy limited “claims” to proceedings brought by employees, and the EEOC was not Cracker Barrel’s employee.

For more:  http://www.lexology.com/library/detail.aspx?g=21384c3f-95d2-424d-a68c-ecd547ebe694

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by | October 4, 2011 · 5:44 am

Hospitality Industry Employee Risks: Colorado Hotel Owners Sued By U.S. Equal Employment Opportunity Commission (EEOC) For Firing White Workers In Favor Of Hispanic Workers

“…one of the fired employees was told she was being terminated because the hotel owners preferred non-American and non-Caucasian workers ‘because it was their impression that such workers are lazy’..”

The U.S. Equal Employment Opportunity Commission is seeking back pay for employees that federal officials said were fired from a Hampton Inn franchise in Craig, Colo., according to the lawsuit filed last week.

Former employees at a western Colorado hotel said they were fired and replaced with Latino workers because the business owners thought white and non-Hispanic workers were lazy, according to a federal lawsuit announced Monday.

The lawsuit claims the general manager of the hotel was told by the business owners “to hire more qualified maids, and that they preferred maids to be Hispanic because in their opinion Hispanics worked harder.”

For more:  http://www.businessweek.com/ap/financialnews/D9Q51LLO1.htm

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Filed under Employment Practices Liability, Insurance, Labor Issues, Legislation, Liability, Management And Ownership, Risk Management, Training

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by | October 3, 2011 · 11:40 am

Hospitality Industry Health Risks: Two Workers Die Of Hydrogen Sulfide Gas Poisoning While Working On A Pump Storage Tank At A Maine Hotel

“…Autopsies of two workers who collapsed and died while repairing a submersible pump in a pump storage tank at a Kennebunkport, Maine, hotel on Sept. 27 reveals they were exposed to high levels of hydrogen sulfide gas… It is suspected that the men did not test the atmosphere before they entered the tank..”

 “…Hydrogen sulfide is given off by bacteria present in sewage and exposure quickly can lead to unconsciousness and death…”

The storage tank where the men were working is 9 feet below ground and approximately 4 feet high by 6 feet long by 5 feet wide. Neither man was wearing a respirator when the bodies were found.

Studley and Kemp were working near an employee of Nest and Sons, who was pumping out the underground tank. He left with a load of sewage and when he returned, the men were gone, even though their truck still was in the parking lot. At that point, a hotel employee reporting them missing and when pumping was resumed in the tank, one of the bodies surfaced. The tank was searched and the second body was found.

For more:  http://ehstoday.com/safety/confined_space_workers_killed_1003/

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by | October 1, 2011 · 5:33 pm

Hospitality Industry Employee Risks: Nevada Hotel Sued By Federal Government For "Racial Harassment"

“…Federal officials say hotel managers were first told in 2006 that several Hispanic room attendants had been subject to the comments referencing their ethnicity and skin color. The comments came from coworkers and supervisors. Some of the comments were profane…and derogatory names such as “taco bell” and “bean burrito.”

The U.S. Equal Employment Opportunity Commission announced Friday that it had filed a lawsuit against the Pioneer Hotel in Laughlin, Nev. for ignoring the alleged harassment.

The hotel allegedly didn’t take action to prevent or correct the harassment in violation of the federal Civil Rights Act. Federal officials say some Nevada casinos seem to be retaliating against employees who complain about hostile work environment.

http://www.washingtonpost.com/national/feds-sue-nevada-hotel-for-not-protecting-hispanic-employees-from-harassment/2011/09/30/gIQA5ZYABL_story.html

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by | September 28, 2011 · 5:20 am

Hospitality Industry Employee Risks: Rising Health Insurance Premiums Force Hotel Management To Consider Shifting Costs Or Raise Deductibles

“…Employers are often forced to shift some of the cost to their employees in an effort to offset the increasing outlay. Organizations increased the employee portion of the premium at a rate of 54.3 percent, whereas 42 percent have increased deductible levels….”

 The 2011 Compensation Data Hospitality survey results show companies reported an average premium increase of 9.3 percent. More than 45 percent of respondents indicated they pay more than $9,600 annually for an employee plus family plan.

“The rising cost of insurance premiums is something that continues to be an issue for employers,” says Amy Kaminski, director of marketing for Compdata Surveys, the nation’s leading pay and benefits survey data provider. “To counteract these rising costs, organizations have to look in different directions in order to continue providing quality coverage for their employees.”

Premium costs remain high for hospitality employers, as 47.9 percent pay more than $7,200 for an employee-plus-spouse plan. Of survey respondents, 42 percent report paying more than $7,200 in premium costs for an employee-plus-children plan. Employee-only plans cost employers between $2,400 and $7,200 per year.

For more:  http://www.qsrmagazine.com/news/medical-insurance-rises-hospitality-industry

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by | September 22, 2011 · 12:16 pm

Hospitality Industry Employee Risks: Government Regulators To Enforce "Wage-And-Hour Laws" Regarding Minimum Wage And Overtime Pay; Multiple Fines To Hotel Owners Found Guilty Of "Wage Theft"

 “…Labor officials will target businesses that improperly label workers as independent contractors or as non-employees to deprive workers of minimum wage and overtime pay. Misclassifying workers also lets companies avoid paying workers compensation, unemployment insurance and federal taxes..”

Labor Secretary Hilda Solis has made increased enforcement of federal wage-and-hour laws a top priority since she took office in 2009. The department has focused on industries where so-called “wage theft” is considered a problem, including the hotel, restaurant, janitorial, health care and day care industries.

Patricia Smith, the Labor Department’s top lawyer, said sharing information between state and federal agencies could subject businesses to multiple fines.

“There’s more of an incentive to be in compliance because the cost of what we consider to be illegal activity has increased,” Smith said in an interview.

In the past, Smith said, a company might pay a single fine to a state agency for not making proper unemployment insurance payments. Under the new agreements, a state can share the information with the Labor Department, which also can seek fines and penalties for federal wage violations.

The violation also would be reported to the IRS, which can go after the company for unpaid taxes, Smith said.

States that have agreed to work with the Labor Department so far include Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington. Labor officials from New York and Illinois plan to sign up in the near future.

For more:  http://online.wsj.com/article/AP1a153b15fbd44922854b2aff6f272223.html

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by | September 20, 2011 · 5:49 am

Hospitality Industry Theft Risks: Washington Hotel Housekeeper Arrested For "Stealing iPad" From Guest Room; Global Positioning System (GPS) On Device Tracks Down Suspect

“…The guest noticed his iPad missing from his room Sept. 9, and there was no forced entry… the man used a GPS that had been installed on the device as an anti-theft measure to trace the iPad to Zavala’s apartment complex…”

Olympia detectives arrested a housekeeper at the Red Lion Hotel Olympia on Friday after a hotel guest tracked a global positioning system on his missing iPad to the housekeeper’s apartment, police said

The man contacted police, and detectives went to Zavila’s apartment. She admitted to taking the iPad.

Detectives executed a search warrant at the apartment and found the iPad. They also found a laptop, jewelry and other items that might have been stolen.

Hotel General Manager Jay Johnson said Zavala has been suspended pending the outcome of her case. He added that hotel officials believe the theft is an isolated incident.

Read more: http://www.theolympian.com/2011/09/19/1806512/hotel-housekeeper-accused-of-stealing.html#ixzz1YV3toCsb

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by | September 14, 2011 · 10:47 am

Hospitality Industry Guest Room Risks: "Hotel Minibars" Are "Loss-Leaders" At Many Properties Where Theft And Spoilage Cause Inventory Issues

“… actually [minibars] are loss-leaders…(some hotels have) been phasing out stocked minibars…Theft and billing problems can eat into minibar income. Hilton loses 5% to 20% of minibar revenue to “quote-unquote breakage…”

To cut costs and keep better track of sales, more hoteliers are installing automated minibars equipped with sensors that know when an item has been removed, immediately charging a guest’s bill.

Hotels and minibar manufacturers say these can cut labor costs since employees only have to check the roughly 25%-30% of rooms that use the minibar on a given day. Software can track how long items have been sitting in the minibar, cutting down on the problem of expired snacks.

But automated minibars cause problems of their own. If you take out an item and put it back, you might be charged, though most hotels give a grace period of about 40 seconds. And forget replacing a minibar’s high-priced sodas with your own snacks.

Sensors can also be overly sensitive, causing problems even for travel professionals.

For more:  http://online.wsj.com/article/SB10001424053111904537404576554441363020606.html

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by | September 12, 2011 · 7:11 am

Hospitality Industry Security Risks: Minnesota Hotel Security Employees "Fight" With "Partiers" As Mini Riot Erupts Outside Hotel

 “…hotel security employees were fighting with event-goers… partiers soon began moving north on Nicollet Mall, throwing restaurant patio furniture into the streets and getting into fights, but damage was minimal…

Police made three arrests after what they’re calling a “mini riot” broke out on the streets of downtown Minneapolis. Dozens of officers responded to a dance party involving several hundred teens called Big Bash 2 around 10 p.m. Saturday. The event was held in a hall next to the Hyatt Regency Hotel.

Three people were arrested, including someone who punched an officer in the face.

For more: http://www.chron.com/default/article/Police-arrest-3-after-mini-riot-in-Minneapolis-2165669.php

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