Category Archives: Liability

by | November 22, 2012 · 7:19 am

Hospitality Industry Workers' Compensation Insurance Risks: Tennessee Supreme Court Awards Restaurant Manager Benefits At "Six Times His Medical Impairment" From Electrocution Injuries

“…The Tennessee Supreme Court held that a manager was entitled to benefits at the statutory maximum of six times his medical impairment…the manager was denied a meaningful return to work when he was terminated in retaliation for filing his claim. The manager’s age, education, training, work experience, and limitations warranted the six-times multiplier…”

A co-manager for a fast food restaurant was repairing a heating element used to keep food warm. Someone plugged the heating element into an electrical outlet. An electrical shock caused the manager to lose consciousness. He suffered from burns on his hands, chest pains, headaches, and memory loss. He repeatedly asked his supervisor to pay his medical expenses and authorize medical care for his symptoms. The district manager said he would “take care of it,” but the bills remained unpaid. The manager filed a workers’ compensation claim, and the restaurant was fined for failing to timely report the incident. Days after the claim was filed, his supervisor “vulgarly expressed his anger” about the claim. Within weeks, the manager, who had never received a reprimand, received two reprimands and was later terminated.

A neurologist diagnosed the manager with a migraine condition and epilepsy and opined that the conditions were caused by the electrical shock. The neurologist found that he reached maximum medical improvement with a 10 percent impairment to the body as a whole. A vocational expert opined that the manager suffered a 65 percent vocational disability based on his age, limitations, work history, and the local labor market. The manager was unable to find gainful employment other than occasional “odd jobs.” The Tennessee Supreme Court held that he was entitled to benefits at the statutory maximum of six times his medical impairment.

The court rejected the restaurant’s argument that the maximum multiplier possible was meant to punish it for mishandling the claim rather than an assessment of disability.

For more:  http://www.riskandinsurance.com/story.jsp?storyId=533352818

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by | November 21, 2012 · 7:15 am

Hospitality Industry Employment Risks: Hotel "Off-Duty Access Policies" Cannot Be At "Management Unlimited Discretion" According To National Labor Relations Board (NRLB) Decision

In a 2-1 decision, the (National Labor Relations Board) struck down a Marriott property’s policy prohibiting off-duty employees from accessing the hotel property without a manager’s approval. In doing so, the board evaluated Marriott’s rule in light of well-established case law dating back four decades.

Many hotels maintain off-duty access policies that limit but do not prohibit employees from accessing the hotel property during off-duty hours. The policy might require an employee to obtain advance permission from management and/or limit access to employer-sponsored events. Such a policy seems reasonable.

The hotel or resort might want to grant access to employees as an employee benefit. Employee discounts, access to restaurants, golf courses, spa facilities and ski slopes, for example, are valuable employee benefits. Of course, the hotel needs to balance legitimate business concerns, such as maintaining the security of its premises and guests, as well as assuring its guests have ready access to facilities.

Under that 1976 case, the NLRB established a three-part test for whether off-duty access restrictions are legal. For an off-duty access rule to be valid under that test, the policy must:

1) limit access only to the interior of the facility and other working areas;

2) be clearly disseminated to employees; and

3) apply to any off-duty employee seeking access for any reason and not just those engaging in union activity.

In the Marriott case, issued 28 September, the board held that because the rule was not a uniform ban on access but instead gave management unlimited discretion to determine when to permit access, it could lead employees to believe they could not engage in union organizing or other protected activity without a manager’s approval. The board struck down the rule as unlawful and said a “narrow, extremely specific” off-duty access rule might be deemed valid. However, it provided no guidance as to what type of rule is acceptable.

This decision puts hospitality employers in an untenable position. The hotel has one of three options:

1) adopt a policy limiting all off-duty access, even for legitimate reasons such as picking up a paycheck or attending special events;

2) grant employees access to the property without any restrictions; or

3) prepare a policy with narrow exceptions for special circumstances and hope the policy survives legal scrutiny.

For more:  http://www.hotelnewsnow.com/Articles.aspx/9417/NLRBs-decisions-impacts-hotel-policies

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by | November 19, 2012 · 1:18 pm

Hospitality Industry Property Risks: Superstorm Sandy Increases Interest In Commercial Flood Insurance; 40% Of Small Businesses Never Reopen After Water Damage From Disasters

Under the NFIP, non-residential businesses can purchase up to $500,000 in building and $500,000 in content coverage, while residential businesses can purchase up to $250,000 in building and $100,000 in content coverage. Marsh’s Flood Service Center can place up to $30 million in excess of NFIP flood insurance, including business interruption, with A-rated insurance capacity.

According to NFIP, almost 40 percent of small businesses never reopen following a disaster because of water damage. Over the past five years, the average commercial flood claim has been about $75,000.

Interest among businesses in purchasing flood insurance coverage from the National Flood Insurance Program (NFIP) is increasing in the wake of Superstorm Sandy’s heavy rain, record storm surge, and resulting widespread flood damage, according to insurance broker Marsh.

Although most companies purchase commercial flood insurance through the private market, more are now inquiring about purchasing additional coverage through the NFIP. When used in tandem, NFIP coverage can mitigate or “buy down” large deductibles associated with commercial flood policies or simply provide additional coverage.

For more:  http://www.claimsjournal.com/news/national/2012/11/18/217658.htm

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by | · 7:26 am

Hospitality Industry Legal Risks: Michigan Hotel Sued By EEOC For "Terminating Pregnant Housekeeper"; Employers May Not Exclude Pregnant Women Based On Their "Concerns About Safety Of Unborn Child"

“…Ramin fired a housekeeper shortly after it learned of her pregnancy. The company stated that it could not allow her to continue to work as a housekeeper because of the potential harm to the development of her baby…”

The U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit today charging that Ramin, Inc., a Comfort Inn & Suites franchise owner in Taylor, Mich., violated federal law when it terminated a pregnant housekeeper because of her pregnancy.

Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act, protects female employees against discrimination based on pregnancy, and the Supreme Court has expressly rejected the notion that an employer may exclude pregnant women from employment based on its own concerns about the safety of the unborn child.

The EEOC seeks injunctive relief to prevent Ramin from discriminating against pregnant employees or applicants in the future, as well as monetary relief on behalf of the victim.  The EEOC filed suit after first attempting to settle the case through its conciliation process.

“Pregnancy discrimination is rarely subtle,” said Lauren Gibbs Burstein, attorney in the EEOC’s Detroit Field Office.  “Employers may not bar pregnant employees from work because of outdated myths or stereotypes.  The EEOC will vigorously defend the rights of pregnant workers to provide for their families by remaining employed.”

For more:  http://www.eeoc.gov/eeoc/newsroom/release/11-13-12c.cfm

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by | November 16, 2012 · 8:58 am

Hospitality Industry Security Risks: Major Hotels Increase Review Of Guest Security Processes After Recent Reports On Door Lock Vulnerability

“…An assault on guests or theft of their belongings during a hotel stay can result in a court case…the “reasonable person” test is used to determine the outcome. If hotel owners are made aware of a procedure or item in their property that is not keeping the guest safe, they are required to do what a reasonable person would do under those circumstances. “And if they don’t, they’re negligent…”

Recent media reports scrutinizing the vulnerability of guestroom door locks have brought hotel guest safety issues to the forefront of hoteliers’ minds. As the media and traveling public continue to express their concerns, hotel companies are taking steps to ensure a safe environment for guests.

Marriott International, for example, issued a statement on its website that said the company is in the process of implementing solutions to resolve any issues with door locks that could compromise guest safety.

Reevaluating standards and policies
As hotel management companies and major hotel brands continue to review security processes and implement solutions, there are a few points for hoteliers to keep in mind when it comes to guest safety, according to Fred Del Marva, president of hotel consulting firm Del Marva Corporation.

Guest safety starts at the front desk during the check-in process, Del Marva said. The standard policy throughout the industry is for front-desk employees not to verbally issue guests their room numbers, he said.

For more:  http://www.hotelnewsnow.com/Articles.aspx?ArticleId=9384&par1=z7Vqd2AtHfkNLvAuP25I0Q==&par2=2EAFVJU1Lms7zTjNNV7iNMJVd1wKf1Q9bx5n/Mqpu2K12/66UcXBIn1NuEvyifCh&goback=.gmp_922967.gde_922967_member_186188808

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by | · 7:12 am

Hospitality Industry Health Risks: Data Reveals Few U.S. Hotels Have "Carbon Monoxide Alarms" Installed; 30 Incidents Of Elevated CO Levels Has Led To Evacuations And 8 Deaths

“…Few of the roughly 4.9 million rooms in 51,214 lodging properties with at least 15 rooms have (carbon monoxide) alarms…From 2010 through Nov. 8, 2102, there were 30 incidents of fire departments or government officials finding elevated levels of CO at U.S. hotels…in the 30 incidents, more than 1,300 people were evacuated, eight died, and at least 170 were affected by CO, treated by medical personnel or hospitalized…”

Neil Hampson was inside his room at a lodge in Alaska during a salmon fishing vacation three years ago when his carbon monoxide alarm sounded. Hampson, a Seattle doctor and expert on carbon monoxide, went to the basement and found the CO level four times higher. He says he turned off the gas for the water heater, and CO levels throughout the building “dropped precipitously.”

A plumber later found that the water heater was improperly vented, he says, and the lodge owner installed CO alarms in each sleeping room. Guests and staff at the lodge near Alaska’s Kenai River were fortunate Hampson carries an alarm which detects the odorless, colorless poison gas that can cause brain damage or be lethal.

Only a handful of state or municipal laws require them, although more than 1,300 people were evacuated nationally from hotels because of high CO levels in recent years.

CO, often called “the silent killer,” is such a threat that the National Fire Protection Association says CO alarms should be near bedrooms in every home.

For more:  http://www.usatoday.com/story/travel/hotels/2012/11/15/hotels-carbon-monoxide-alarms/1707863/

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by | November 14, 2012 · 7:10 am

Hospitality Industry Legal Risks: Kentucky-Based Restaurant Group Faces "Telephone Consumer Protection Act" Class-Action Lawsuit For "Unsolicited Text Message Advertising"

“…each alleged violation of the act, which consists of a brand sending an unsolicited advertisement via phone call or text message without prior consent, carries up to $500 in statutory damages…text messages allegedly were sent to thousands of Papa John’s customers without their consent because OnTime4U obtained the cell phone numbers of customers from the implicated franchisees…”


A U.S. District Court judge in Seattle has certified a class-action lawsuit against Papa John’s International Inc., calling for as much as $250 million in damages for the alleged transmission of 500,000 text messages to consumers who claim they did not consent to receive such texts.

Three named Papa John’s customers and potentially many more are suing the Louisville, Ky.-based operator or franchisor of 4,000 Papa John’s Pizza restaurants for allegedly violating the Telephone Consumer Protection Act.

The lawsuit, first filed in February by Washington state resident Maria Agne, stems from text messages Agne claims she received without her consent in April 2010. The texts, which promoted Papa John’s products and offers, allegedly came from marketing services provider OnTime4U, which had contracted with several Papa John’s franchisees in the Pacific Northwest.

OnTime4U allegedly indicated to the franchisees — who operate as many as 21 Seattle-area units in Rain City’s case and 12 Portland, Ore.-area restaurants in Rose City’s case — that those messages would not be considered spam or violate the TCPA because those customers had previously ordered a pizza from the franchisees, establishing an “existing business relationship,” which exempts calls and texts from oversight of the TCPA.

According to Coughenour’s order, Kevin Sonneborn, franchisee of PJ Sound Pizza LLC, testified that customers were not asked for their permission to send text messages before their phone numbers were given to OnTime4U.

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by | November 13, 2012 · 7:41 am

Hospitality Industry Legal Risks: New Jersey Hotels Sued For "Price Goughing" During Superstorm Sandy; Fines Up To $10,000

“…(the state sued) a Howard Johnson Express in Parsippany…New Jersey law defines price gouging as an “excessive price increase,” or of 10 percent or more, during a declared state of emergency…Businesses sued by the state face penalties of $10,000 for a first offense and $20,000 for a second offense…”

New Jersey accused seven filling stations and a hotel of gouging customers during the state of emergency after Hurricane Sandy by raising prices as much as 59 percent.

The storm last week killed more than 100 people, triggered an almost 14-foot tidal surge, displaced thousands and knocked out power to millions. It crippled mass transit and interrupted supplies of gasoline.

“We warned merchants again and again not to violate the law by taking advantage of people following this catastrophe,” Chiesa said. “The fact that we have these fringe businesses that think that disasters are a profit center is troubling.”

The state Division of Consumer Affairs got 2,000 complaints about price gouging for gasoline, generators, food and lodging, according to Chiesa. About 83 percent involved gas stations, he said. About 4 percent of the state’s 2,400 gas retailers were subject to subpoenas.

For more: http://www.businessweek.com/news/2012-11-09/new-jersey-plans-price-gouging-suits-against-8-businesses

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by | November 12, 2012 · 7:49 am

Hospitality Industry Crime Risks: Florida Restaurant Thieves Steal Safe Containing $35,000 In Cash; Break In Through Wall In Business Next Door

“The burglars got into the restaurant by breaking into a neighboring business and entering through a wall. Once inside the restaurant, they took the safe and the surveillance system…”

Thieves broke into a restaurant on Flagler Street overnight, stealing a safe that contained $35,000 in cash.
According to NBC 6, thieves broke into El Caribe Cafe at 7173 W Flagler Street sometime between midnight and 4 a.m. Monday morning.

About four months ago, thieves broke into the same restaurant, entering through the roof.

Police are investigating the crime, and doubt one thief acted alone. Miami police spokesperson Kenia Reyes confirmed evidence was left at the scene, but is not disclosing what it is at this time.

For more:  http://blogs.miaminewtimes.com/shortorder/2012/11/thieves_steal_35000_in_restaur.php

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by | November 11, 2012 · 7:36 am

Hospitality Industry Fire Risks: New York Restaurant Kitchen Workers Seriously Burned As "Gasoline Stored In Container" Spills And Ignites

“…the sushi chef… had asked a dishwasher to carry a five-gallon soy sauce container filled with gasoline through the kitchen to his car…The gasoline (had been acquired) a day earlier from an acquaintance and had been stored in the restaurant’s basement…as the dishwasher was carrying the gasoline through the kitchen, it spilled and ignited. Another chef was immediately engulfed in fire, receiving first- and second-degree burns to his face, neck, arms and legs before bystanders extinguished the flames…”

A sushi chef has been arrested after a soy sauce container he had filled with gasoline ignited at a restaurant close to Sutton Place in Manhattan, starting a blaze that severely injured three people.

The fire, which occurred about 10 p.m. Friday, raced through the kitchen of Eno Asian Bistro and Lounge on 1066 First Avenue at East 58th Street, the Fire Department said.

A busboy and another woman also sustained second- and third-degree burns to their legs. As of Saturday, the victims were still recovering at NewYork-Presbyterian/Weill Cornell Medical Center.

For more:  http://cityroom.blogs.nytimes.com/2012/11/10/chef-charged-in-fire-at-restaurant/

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