Category Archives: Liability

by | February 24, 2013 · 7:39 am

Hospitality Industry Insurance Risks: California Restaurant Owners Charged With “Felony Worker’s Compensation Fraud” For Failing To Insure Twelve Employees; Fines Totalling $18,000

“…an anonymous complaint (alleged) that the restaurant did not have workers’ comp insurance as required by law…following a visit to the restaurant, a civil citation (was issued) with penalties totaling $18,000 for failing workers comp fraudto insure their 12 employees…businesses not carrying valid workers’ compensation coverage are considered uninsured and face a “Stop Notice and Penalty Assessment” from the Labor Commissioner and fines of $1,500 per employee, up to $100,000. If an injury occurs, the fine increases to $10,000 per employee. A worker injured while working for an uninsured employer can sue for damages and the employer is presumed negligent in such cases…”

The owners of a restaurant in San Marcos, Calif. have been charged with felony counts of workers’ compensation fraud and forgery following a referral by the California Labor Commissioner Julie A. Su’s criminal investigation unit to the San Diego District Attorney’s Office.

The district attorney’s charges, filed in San Diego Superior Court on Jan. 29, allege that Rhythm City Grill owners John Fletcher Johnson and Annette Lucille Thomas each committed two felony counts of forgery of a workers comp insurance policy and a misdemeanor charge of conducting business without workers’ compe insurance. Johnson was also charged with an additional felony for submitting a false document to a government agency. He and Thomas were arraigned Feb. 14.

If convicted, Johnson and Thomas face up to 16 years in prison for the felony charges. The failure to secure workers’ comp insurance carries a misdemeanor charge of 1 year and a fine.

For more: http://www.insurancejournal.com/news/west/2013/02/19/281769.htm

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by | February 23, 2013 · 8:35 am

Hospitality Industry Legal Risks: New York Restaurants Now “Randomly Targeted” For Wage Violations By Labor Department; “Liquidated Damages” Can Double Back Wages Owed

“…officials at the local U.S. Department of Labor office say that in prior years, they relied on employee tips to launch investigations… the random inspections now drive as many investigations as employee Hospitality Industry Wage Violation Lawsuitscomplaints…those probes increasingly turned up egregious violations including kitchen workers being paid as little as $2 an hour…Starting in 2011, the office launched a restaurant initiative, focusing on a different segment each year. The initial focus was pizza and pasta restaurants. Last year it was diners; this year, Asian restaurants…”

The U.S. Department of Labor is targeting Long Island‘s largest private-sector employer, the restaurant industry, charging it with widespread minimum-wage and overtime violations.

The department has launched a campaign of random inspections with growing impact: In the 12 months through Sept. 30, it obtained court orders against 89 employers for such violations on the Island — about half of the roughly 180 orders obtained in all the United States by the Wage and Hour Division of the Department of Labor, according to Irv Miljoner, the Westbury-based district director for Long Island. Of the Island employers being sanctioned, 66 are restaurants.

As part of the stepped-up litigation, local Labor officials are increasingly seeking liquidated damages, which double the back wages owed. “Before this we would just go in and we would get back wages for a two-year period, and they would pay it and we’re done,” said Richard Mormile, assistant director of the Long Island office. “We have upped those consequences.”

Overall in fiscal year 2012, the office’s investigators found that local employers, mostly restaurants and diners, owed $8.6 million in back wages, up 28 percent from $6.7 million they uncovered the year before.

This year’s effort has already resulted in one of the largest settlements ever for the local office. An Asian restaurant chain with two locations on Long Island — Asian Moon, in Garden City and Massapequa Park — and a location in Westchester agreed to a court order requiring it to pay more than $1 million to settle charges that it underpaid 255 employees over three years and altered records to hide the violations. The department’s lawsuit charged that food preparers and dishwashers worked 55 hours a week without being paid overtime.

For more:  http://www.newsday.com/classifieds/jobs/u-s-labor-dept-checks-li-restaurants-for-wage-violations-1.4694410

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

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by | February 22, 2013 · 6:54 am

Hospitality Industry Legal Risks: Restaurant Owners Increasingly Targeted With EEOC Lawsuits Over “Family Medical Leave Act” Liability; Employees Who Use Up “Available Paid Sick Leave” Assert Disability Rights

“…Previously, if an employee had exhausted all twelve weeks of FMLA leave and any other available leave, they could be terminated without employer liability…however, the EEOC recently has taken the position that Paid Sick Leave In Hospitality Industryonce leave is exhausted under the FMLA, this can trigger an employer’s affirmative duty to provide a reasonable accommodation  to an employee’s disability, which can include providing additional leave..”

For 2013, food service employers can expect a continued aggressive approach from the Equal Empoyments Opportunity Commission (“EEOC”) as to violations of the Americans with Disabilities Act (“ADA”) in the restaurant industry.  The significant increase of ADA charges and lawsuits by the EEOC and private claimants, which began in early 2012, shows little sign of abating in the new year.

Back in 2008, Congress passed the Americans with Disabilities Act Amendment Act (“ADAAA”), which was intended to counter a series of U.S. Supreme Court decisions that significantly limited employees’ ability to assert and prevail in disability lawsuits.  Under the ADAAA, and the EEOC’s final regulations, approved in 2011, the definition of what constitutes a disability was significantly broadened.  As a result, employees who previously would not have been considered disabledEEOC under the ADA, now fall under its statutory protections.  Prior to the amended Act, employers could often prevail in litigation on the basis of whether the employee actually was considered disabled under the narrow interpretations of the Supreme Court decisions.  With the new broad definition, most cases now hinge on whether the employer reasonably accommodated the employee’s disability..

One source of increased litigation and attention from the EEOC is when the ADA intersects with the Family and Medical Leave Act (“FMLA”) as to leave for a serious medical condition.   Under this scenario, employees who were terminated after exhausting FMLA leave are asserting EEOC Charges and filing lawsuits under the ADA.  Employers are also being forced to agree to high dollar settlements with the EEOC to avoid the prospect of the federal agency filing suit on behalf of employees and former employees.

For more:  http://www.bluemaumau.org/surge_ada_disability_lawsuits_continue_2013_restaurant_and_food_service_employers_crosshairs

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

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by | February 21, 2013 · 6:31 am

Hospitality Industry Legal Risks: Colorado Hotel And Restaurant Sued By Woman Who “Drank Bleach In A Water Glass”; Lawsuit Seeks $100,000 For “Negligence And Breach Of Implied Warranties Of Merchantability And Wholesomeness Of Food”

“…(plaintiff) suffered serious and continual medical problems, including the inability to eat effectively, persistent acid reflux syndrome, digestive problems and other symptoms…(her) relationship with her husband Hospitality Industry Injury Lawsuitsand her ability to care for her children have been affected…among the claims in the lawsuit are negligence, breach of implied warranties of “merchantability and wholesomeness of food,” loss of consortium and a violation of Colorado’s premises liability statute…”

A Basalt woman is suing the owner and operator of the Viceroy Snowmass, alleging that she was served and drank out of a glass that had bleach in it at the hotel’s Eight K restaurant. The incident happened during brunch in February 2011, according to the lawsuit by Janine and John Reichert. The suit, filed Tuesday in Pitkin County District Court, seeks more than $100,000. It lists Base Village Owner, the hotel’s owner, and Viceroy operator KHM Snowmass as the defendants.

After being seated, a waiter poured water for the Reicherts’ party from a pitcher, wrote their attorney, Alan Feldman of Aspen, in the lawsuit. “Immediately after Janine drank from the glass, she jumped up out of her seat, stating that she had drank chemicals and needed to get to the bathroom as she was going to throw up,” the lawsuit says. “Janine’s throat began to burn and swell up. … [She] raced to the restroom, where she became violently ill.”

John Reichert dipped his finger in her glass and allegedly tasted a bleach solution. The wait staff then cleared all of the glasses from the table and disposed of their contents, Feldman wrote. One Eight K employee allegedly told John Reichert that “it is typical for the water pitchers to be soaked in a solution of bleach for sterilization and that the waiter could have picked up a water jug soaking in this bleach solution, believing it to be drinking water,” Feldman wrote.

However, as Janine Reichert was talking to a poison-control operator, a manager allegedly told her that she had ingested merely the residue from the bleach left on the jug.

For more:  http://www.aspendailynews.com/section/home/156795

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Filed under Claims, Food Illnesses, Guest Issues, Injuries, Insurance, Liability, Maintenance, Training

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by | February 20, 2013 · 6:42 am

Hospitality Industry Social Media Management: Hotel Management Must Have Policies In Place To Deal With An “Online Reputation Crisis” Including “Act Quickly, Publish Official Response, Remove Content And Rally Supporters”

Given the rapid-fire pace at which content can spread via social networks, hotels have never been more vulnerable. A seemingly minor issue can quickly escalate into a full-blown crisis, causing serious damage to Hospitality Industry Social Media Managementreputation.

After a power outage at a Texas hotel last summer, a paralyzed American war veteran called the front desk to request help from his room. For reasons not entirely clear, the clerk allegedly laughed at the request and mocked him. The guest got down by throwing his wheelchair and bags down three flights of stairs and sliding down on his backside. Then he went to straight to the media.

The incident incited a public furor that quickly spread to social networks. The hotel, its employees and the entire brand came under attack, with expressions of outrage and calls for a brand-wide boycott. Despite a solid reputation, it seemed nothing the brand could do—issue a refund and a public apology, dismiss the employee, implement staff training—would appease detractors.

  • Be prepared – Given the risks involved, a social media policy with a crisis management component must be a priority. Outline the steps to take in the event of a crisis, the people responsible, and the role social media will play in messaging. Keep a list of emergency contacts at hand, including your social media administrator.
  • Act quickly – When a crisis hits, there’s no time for bureaucracy. You must respond quickly and decisively. But first you must assess what’s at stake. Include senior management in decisions, and if appropriate seek advice from a PR firm or lawyer.
  • Publish an official response -  An official response is a critical step. It should be honest and sincere, should speak to your company’s credentials, and should be authored by a senior executive. Post it to one channel—your website or blog, a video—and direct all inquiries there.
  • Rally supporters – Call on your community of fans to help get your messaging out. Their words will have more impact and reach than official brand messages.
  • Don’t fuel the fire – Buchmeyer tells me of another incident in which a client attempted to quell a spate of angry comments on its Facebook page by deleting them and blocking detractors. This only resulted in escalating the situation. Monitor conversations and respond as appropriate, but resist the urge to sanitize. In some cases it may be better to “go dark” on social media rather than draw attention to the issue and further provoke detractors. This is especially true in the case of a tragedy or natural disaster, when communications should be restricted to community support and keeping guests informed.
  • Get the content removed – Getting damaging content taken down can be challenging, especially if it has spread to multiple channels. Go to the source and ask them to remove it, but don’t be heavy handed. At the same time, appeal to the host site to have it removed. Litigation is an option if the content is libelous, but use it as a last resort. Engage in charitable causes and community work that will garner positive content to displace the negative.
  • Reputation management—a company wide function – The media loves a scandal, and exposés of security, sanitation and safety issues are popular topics that can be highly damaging to business. Employees must be aware that social media has raised the stakes. The consequences of guest mistreatment, negligence and lapses in quality, service and security can be severe. Management must play its part by providing the training, empowerment and support necessary to ensure standards are understood and upheld.

For more:  http://www.hospitalitynet.org/news/154000320/4059521.html

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Filed under Guest Issues, Labor Issues, Liability, Management And Ownership, Privacy, Risk Management, Technology, Training

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by | February 19, 2013 · 6:58 am

Hospitality Industry Crime Risks: New York Hotel Thieves “Smash Jewelry Cases” And Walk Out With Over $160,000 In Watches And Diamonds

“…the hotel lobby has 18 display cases…the suspects chose to smash the one filled with jewels from Jacob & Company, a designer favored by celebrities from Jay-Z to Jennifer Lopez to former New York Mayor Rudy Hotel CrimeGiuliani…(police) released images of the suspects from a surveillance camera late Sunday night, and confirmed that police are still looking for them. The men were last seen heading east on 57 Street after the heist…”

It was nearly 2 a.m. on Saturday when two men smashed a display case full of jewelry in the Four Seasons Hotel in midtown Manhattan. The men walked out of the hotel with two high-end wrist watches, a diamond chain and a pendant — together worth more than $160,000 — according to the New York Police Department. No one stopped them.

New York City hotels appear to be an easy target for criminals looking for a quick, and valuable, steal. Last year, a New Jersey man was sentenced to one-to-three years in prison for walking out of the Chambers Hotel in June 2011 with five paintings, each valued at $1,800, stuffed in a canvas tote bag. Two weeks later, the same man pilfered a $350,000 sketch by the highly regarded modern artist Fernand Leger from the Carlyle Hotel.

This is the first time a theft like this has occurred at The Four Seasons in its 20 years, according to Tiffani Cailor, a hotel spokeswoman.

“This is an unusual incident,” she said. “We are very concerned and upset over the theft.”

For more:  http://money.cnn.com/2013/02/18/news/jewelry-heist-four-seasons/

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by | February 18, 2013 · 7:09 am

Hospitality Industry Information Security Risks: Hotels, Restaurants And Retailers Accounted For 78% Of “Data Breaches By Cyber-Criminals” In 2012; “Weak Or Guessable Passwords” Is Most Common Vulnerability

“…Almost one-third of all victims had critical systems administered by a third party…Attackers had no trouble exploiting that weakness, with vulnerable remote-access systems accounting for the method of entry in 47 cybercrime in hotelspercent of the cases…in most cases, users – not software vulnerabilities – were to blame. Almost 90 percent of systems had weak or easily guessable passwords, with “Password1″ continuing to be the most common, according to Trustwave’s report…”

An analysis of breach data for 2012 found that retailers and the hospitality industry continued to command the most interest from cyber-criminals, accounting for 78 percent of the breaches documented by security services firm Trustwave.

The businesses are typically easy targets, having outsourced the administration of important servers and business data to firms that focus more on keeping the systems functioning than on security, says Christopher Pogue, director of digital forensics and incident response for Trustwave’s SpiderLabs.

“An integrator may have 1,000 customers and may do remote administration for all of them using, not 1,000 passwords, but maybe two or three,” Pogue said. “That leaves a vulnerability that can be exploited by attackers.”

For more:  http://www.techweekeurope.co.uk/news/retailer-hotel-crime-107589

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Filed under Crime, Liability, Maintenance, Management And Ownership, Privacy, Risk Management, Technology, Theft

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by | February 17, 2013 · 6:57 am

Hospitality Industry Legal Risks: Illinois Nightclub Sued By Man Stabbed In The Chest By Patron Who Was “Over-Served Alcohol”

“…(plaintiff) required emergency surgery after he was stabbed in the chest…the lawsuit says (he) suffered severe and permanent injuries and “will be hindered and prevented from attending to his usual duties and Alcohol Drink Responsiblyaffairs…the suit alleges that Olaska’s intoxication played a role in the stabbing. A restaurant employee was also injured in the fight…”

A man who was stabbed during a confrontation that cost a Naperville teacher his life has filed a lawsuit against the club where the clash happened. William Hayes III is suing Frankie’s Blue Room in Naperville and owner Riff Menza, claiming the bar over-served Daniel Olaska, who is awaiting trial on charges that he wounded Hayes and killed Shaun Wild in February 2012.

Authorities have said that Hayes had been teasing Olaska about drinking beer from a wine glass when Olsaka stabbed him with a folding knife he was carrying. Wild, a second-grade teacher at a Naperville school and a friend of Hayes’, was attempting to stop Olaska from leaving the bar when Olaska fatally stabbed him, according to police.

Hayes was a senior at nearby North Central College when the incident occurred. Wild was a 2010 graduate of the college. Both played for the school’s football team.

For more:  http://articles.chicagotribune.com/2013-02-15/news/chi-naperville-frankies-blue-room-stabbing-lawsuit-20130215_1_daniel-olaska-shaun-wild-naperville-bar

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by | February 16, 2013 · 6:41 am

Hospitality Industry Legal Risks: Texas Man Born Without Hands Sues Amusement Park After “Operator Refused To Let Him On Ride”

“…after (he) complained to the park, Six Flags changed its policy for the ride he was not allowed to board. Now, a person must have “one full arm and one full leg” for entry…Bench says he hopes his lawsuit will change the Hospitality Industry ADA Lawsuitsway the park handles disabled customers and safety concerns. He says he hopes to “set a precedent that there is a better solution than what’s in place now.”

A Texas man born without hands is suing a major theme park after he was barred from a ride allegedly because of his disability. Clint Bench says he had been to the Six Flags in Arlington many times and never had a problem with the staff. But on a trip to the theme park in May, an operator refused to let him on a ride.

Bench went to guest services but had no luck. So he hired a lawyer and is now suing the park for violating the Americans with Disabilities Act.

“We repeatedly offered to resolve this with Six Flags for not a dollar. Clint was absolutely adamant when he came to me that this was not about him getting a dollar,” his lawyer Levi McCathern said.

Read more: http://www.nydailynews.com/news/national/clint-bench-flags-times-issuese-riding-knew-knew-article-1.1264187#ixzz2L4ZII2j2

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by | February 15, 2013 · 6:46 am

Hospitality Industry Theft Risks: Hawaii Hotel Employee Arrested For Stealing $11,000 Worth Of Jewelry And Goods From Luggage In Storage Room

“…a review of video surveillance of the storage room revealed that Bueno allegedly entered into the storage room through the service elevator, picked up and concealed the bags within his work cart and exited the hotel securitystorage room…a few minutes later shows (him) allegedly reentering the storage room and placing the bags back on a bellman cart, then exiting again through the service elevator…”

An employee from a hotel in Wailea was arrested on Monday on suspicion of theft after a couple visiting from Maryville, MI, reported more than $11,000 in jewelry and other goods missing from their bags after check-in, police said. Maui police arrested resort houseman, John Bueno for alleged second degree theft in connection with the incident.

According to police reports, the couple arrived at the hotel at around 1:20 p.m. on Monday Feb. 11, checked their bags with a bellman, and proceeded to the pool area to wait until their room was ready.

A few minutes later, police say the female visitor returned to the bell desk and inquired about one of the bags to retrieve an item from within. A check of the storage room found all of their bags missing, and a search of the area by security personnel and hotel managers turned up with negative results.

A few minutes later, another check of the storage room revealed that the bags were returned; however, upon checking each bag, it was learned that various pieces of jewelry and a camera totaling $ 11,100 were missing, said Maui Police Lt. Wayne Ibarra.

Bueno was placed under arrest later that afternoon, and posted bail, which was set at $1,000. He is scheduled to appear in court at 10:30 a.m. on March 14, 2013.

For more:  http://mauinow.com/2013/02/14/wailea-hotel-worker-arrested-in-theft-case/

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