Category Archives: Risk Management

by | May 26, 2013 · 6:38 am

Hospitality Industry Theft Risks: Indiana Hotel “Human Resources Employee” Fired After Issuing “Fraudulent Paychecks” To Himself

“…the HR director was solely responsible for issuing the paychecks for all employees at the hotel…Police were told that more than $7,045 was hospitality industry employee theftpaid to the employee beyond his regular earnings for his job, beginning in December…his boss told police that an internal investigation turned up evidence of the bogus extra paychecks, prompting the worker’s firing…”

A hotel executive has been fired after the hotel’s manager told police that he had been writing extra paychecks to himself. Airport police were called this week to the Radisson Indianapolis Airport, where the general manager handed officers copies of fraudulent paychecks that had been written to the hotel’s director of human resources.

General Manager Nitin Talati declined to comment in his hotel’s lobby on Thursday. His staff could be heard telling phone callers that the hotel was entirely booked for this week’s Indianapolis 500.

Police said Talati told them he had called the employee in when the checks were discovered and the worker admitted to writing himself the extra paychecks. The worker then signed a promissory note on April 12 agreeing to repay the money. Talati reported to police that none of the money had been repaid, so his company now wants to press charges.

For more:  http://www.theindychannel.com/news/call-6-investigators/former-hotel-executive-at-radisson-indianapolis-airport-accused-of-writing-himself-extra-paychecks

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by | May 24, 2013 · 6:33 am

Hospitality Industry Legal Risks: A List Of “High-Profile Restaurant Lawsuits” Over The Past Twenty-Five Years

  • McDonald’s customer suing over hot coffee burning her legsHospitality Industry Lawsuit

In 1992 Stella Liebeck spilled a cup of McDonald’s coffee that she had between her knees, scalding her thighs, buttocks and groin. The 79-year old woman, who later sued, suffered third-degree burns on six percent of her body. The lawsuit, which gained national attention, initially resulted in a jury awarding Liebeck $160,000 to cover medical expenses and an additional $2.7 million in punitive damages. The jury held McDonald’s 80% responsible and Liebeck, who resided in Albuquerque, New Mexico, 20% responsible for the accident. McDonald’s, who appealed the verdict, eventually settled the case with Liebeck for an undisclosed amount, less than $600,000.

  • Woman sues Wendy’s because she claimed there was a finger in her chili

Industry watchers were horrified in 2005 when a woman from Las Vegas claimed to have found a finger in her bowl of Wendy’s chili at a San Jose, California unit. Because of the adverse publicity sales at Wendy’s declined nationwide. Following the incident the FBI ran the fingerprint of the detached finger through its database with no matches found, and Wendy’s offered a $50,000 reward for information leading to the source. As it turned out the woman, Anna Ayala, had a history of lawsuits, filing 13 in Nevada and California. Ultimately the finger was traced to an associate of Ayala’s husband who had lost the finger in an industrial accident. Ayala later pleaded guilty to conspiring to file a false claim and attempted grand theft.

  • Foodmaker’s 90 lawsuits over Jack in the Box E. coli outbreaks

The restaurant industry collectively held its breath in 1993 when four children died of an E. coli 0157:H7 outbreak and 600 others were sickened. The outbreak occurred as a result of patrons eating undercooked hamburger patties at Jack in the Box locations in the Pacific Northwest. Parent company, Foodmaker, faced 90 lawsuits, each of which was settled quickly, some in excess of $7 million. The company, which stared down bankruptcy, lost thousands of customers as a result of the tragedy. Following the outbreak the chain hired highly respected food safety consultant David Theno to lead their turnaround, which ultimately made Jack in the Box the industry’s gold standard concerning food-handling practices.

  • Two Pesos versus Taco Cabana lawsuit reaches the Supreme Court

Quick-serve Taco Cabana alleged in court that the look and feel of its restaurants had been ripped off by Two Pesos, another quick-serve Tex Mex chain. Taco Cabana argued that its competitor had copied its 24-hour patio café concept, and virtually all of its interior and exterior design elements. Suing in 1987 for infringement of trade dress, the Taco Cabana lawsuit wound its way through the U.S. court system and ultimately landed in front of the U.S. Supreme Court in 1992, where the court upheld two lower court rulings. Those courts had decided in favor of Taco Cabana, awarding approximately $2 million damages.

  • In-N-Out versus CaliBurger for copying its signature burger

In-N-Out doesn’t have any units in China but its owners were none too pleased to find out that CaliBurger was serving up a Double-Double (In-N-Out’s signature burger) and also had similar architectural features, as well as palm-tree print cups and Animal style fries. Once the lawsuit for trademark infringement was filed earlier this year, CaliBurger’s owners, who were Americans with offices in Diamond Bar, California, agreed to tweak its menu and décor. “The matter has been resolved,” has been the only comment from In-N-Out.

  • Taco Bell lawsuit asks, ‘where’s the beef?

Taco Bell was recently sued in a lawsuit that essentially asked the question, where’s the beef? According to the suit the YUM-brands owned chain is using a meat mixture that contains binders, and does not meet the minimum requirements set by the U.S. Department of Agriculture to be labeled as “beef.” The lawsuit, which was filed in 2011 by an Alabama law firm on behalf of a Taco Bell customer, was eventually withdrawn but not before it had garnered headlines around the world. “This sets the record straight about the high quality of our seasoned beef and the integrity of our advertising,” Taco Bell CEO Greg Creed said at the time. “We took great exception to the false claims made about our seasoned beef and wish the attorneys had contacted us before filing and publicizing a lawsuit that disparaged our brand.”

  • BK franchisees sue parent company over $1 cheeseburger

In 2009 Burger King franchisees sued their Miami-based parent over a $1 cheeseburger promotion asking the court to agree that BK does not have the right to set prices. The National Franchisee Association, which represents more than 80 percent of the system, said BK used the promotion to boost sales in an attempt to satisfy investors at the expense of the franchisees. After a two-year court battle the franchisees dropped the suit and in the bargain now have more input on both the pricing of Value Menu items and the length of special deals. “We saw this as an opportunity to resolve our differences and move forward,” Steve Wilborg, Burger King’s president of North America, told Reuters at the time. “It’s important for our franchisees to win.”

  • The New York State Restaurant Association sues NYC over calories disclosure

The New York State Restaurant Association filed a federal lawsuit in an attempt to halt New York City’s 2008 rule that made chain restaurants disclose calorie information on their menus. The suit, filed in U.S. District Court in Manhattan, came just 10 days after the city’s Board of Health passed its new rule that would affect about 10% of the city’s restaurants. The association, which represents 7,000 eateries in the state, made the same argument two years earlier but to no avail as the rule is now completely rolled out, affecting chain restaurants with15 units or more. In a statement the city’s Department of Health said at the time. “We hoped the industry would work with us to address New York City’s obesity epidemic, but it has once again decided not to.”

For more: http://aaronallen.com/blog/restaurant-pr/ten-foodservice-lawsuits-that-have-played-out-in-the-public-eye/

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by | May 23, 2013 · 5:57 am

Hospitality Industry Security Solutions: Texas Hotels And Motels Form “Crime-Fighting Network” By Using Email Chain To Report Local Criminal Activity

“…there are about a hundred hotels on an email chain, reporting criminal activity… Awhile back, police busted a counterfeit ring happening in area hotels…they were eventually caught because we had shared the information amongst the hotel network, they were caught by the police Hotel Crime Fighting Networkdepartment…businesses also rely on surveillance cameras to alert each other of suspicious activity…”

You can call it a crime-fighting network of sorts. Area hotels and motels work together to help keep you safe. “You never know when a situation will come up, ” said Bill Brendel, General Manager of the Crockett Hotel downtown.

Unfortunately, Brendel went on to say the crime at the top of hotels’ list are car burglaries. You’ll find most hotels have signs warning you about them. “So we just tell people don’t leave a bunch of things in your car, ‘ Brendel went on to say.

During the peak of the summer tourist season Brendel says the San Antonio Police Department will work closely with downtown hotels to keep an extra eye on your car. “And they do extra surveillance, and it’s been very effective, ” said Brendel.

For more:  http://www.woai.com/news/local/story/Hotel-security-network-curbs-crime/VkpxX6Ah00qO_Z2wNnCZng.cspx

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by | May 22, 2013 · 6:49 am

Hospitality Industry Legal Risks: North Carolina Hotel And Restaurant Sued By Woman “Sickened By Salmonella Infection”; Lawsuit Claims Failure To Maintain Sanitary Conditions Of Food

“…(the plaintiff), who claims to have become ill after eating at the hotel restaurant, filed a lawsuit in the Cumberland County Superior Court Salmonella Enteritidisalleging the hotel owners served food that was ‘not fit for human consumption’…she also alleges that the defendant failed to ‘maintain and monitor the sanitary conditions of it’s food, drink, water, premises and employees’…”

A Fayetteville woman is seeking in excess of $10,000 in damages after she claims she became sick after eating at a restaurant at a Holiday Inn. Last week the Cumberland County Department of Public Health alerted the public of a possible salmonella outbreak after dozens of people claimed to have gotten sick after eating at the Holiday Inn Fayetteville – Bordeaux.

The Cumberland County Department of Public Health says at least 70 people have reported signs or symptoms consistent with salmonella infections and five people were hospitalized. Twelve of those who reported symptoms are out of state. All of the people appear to have eaten at the All American Sports Bar and Grill and The Café Bordeaux within the hotel.

Health officials are worried that the outbreak could spread nationwide because the hotel is alongside Interstate 95.

For more:  http://www.wncn.com/story/22309597/woman-files-lawsuit-against-fayetteville-hotel-linked-to-salmonella-outbreak

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by | May 21, 2013 · 5:44 am

Hospitality Industry Legal Risks: Kentucky Motel Owners And Manager Sued For “Negligence” By Woman Injured When Stairway Broke Away From Second-Floor Landing

“… stairway connecting a second-floor landing to a third-floor landing broke away at the lower end while the women were on it…(the plaintiff) states in her Hospitality Industry Injury Lawsuitssuit that the defendants were negligent by “specifically allowing or creating a hazardous condition in the stairwell of the premises by failing to ensure that the steps were safe for use …she also alleges the owners and manager should have known about the unstable stairwell…”

One of the women injured in a staircase collapse last month at a local motel is suing the business in Madison Circuit Court. Amanda Williams filed the suit May 15, alleging the owners and operators of the Super 7 motel, Richmond Host LLC and Alisha LLC, were negligent in maintaining the property, specifically the “unstable stairwell.”

Williams also is suing Paul Patell, who is listed in the suit as the motel’s local manager. On April 23, two women were injured when a set of exterior stairs collapsed.

Williams and another woman were taken by ambulance to Baptist Health in Richmond, and one of the women later was taken to the University of Kentucky Medical Center, according to a Madison County EMS official.

Williams said she suffered “serious and severe personal injuries” to her spinal cord and legs. She will need prolonged medical attention and may require surgery, according to the lawsuit.

Williams is suing to recover the costs of her medical care, pain and suffering, mental distress, future medical expenses and lost wages.

For more:  http://richmondregister.com/localnews/x508507707/Woman-sues-Super-7-over-staircase-collapse

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by | May 20, 2013 · 6:09 am

Hospitality Industry Health Insurance: Restaurant Chains Considering “Skinny Plans” That Offer “Acceptable Minimum Coverage” Under Federal Health Law; Preventative Services, Annual Doctors’ Visits And Generic Drugs Covered But Surgeries And Hospital Stays Are Not

“…(the “skinny plans”) cover minimal requirements such as preventive services, but often little more…Some of the plans wouldn’t cover surgery, X-rays or prenatal care at all…others will be paired with limited packages to cover additional services,  for instance, $100 a day for a hospital health insurance nationalvisit…Federal officials say this type of plan, in concept, would appear to qualify as acceptable minimum coverage under the law, and let most employers avoid an across-the-workforce $2,000-per-worker penalty for firms that offer nothing. Employers could still face other penalties they anticipate would be far less costly…”

San Antonio-based Bill Miller Bar-B-Q, a 4,200-worker chain, will replace its own mini-med with a new, skinny plan in July and will aim to price the plan at less than $50 a month, about the same as the current policy, said Barbara Newman, the chain’s controller. The new plan will have no dollar limits on benefits, but will cover only preventive services, six annual doctors’ visits and generic drugs. X-rays and tests at a local urgent care chain will also be covered. It wouldn’t cover surgeries or hospital stays.

Because the coverage is limited, workers who need richer benefits can still go to the exchanges, where plans would likely be cheaper than a more robust plan Bill Miller has historically offered to management and that costs more than $200 per month. The chain plans to pay the $3,000 penalty for each worker who gets an exchange-plan subsidy.

But, “those are going to be the people who will be ill and need a more robust plan,” and insuring them directly could cost even more, Ms. Newman said.

Many more workers, she expects, will continue to go without insurance, despite the exchanges and the limited plan. Currently, only one-quarter of workers eligible for the mini-med plan take it. Ms. Newman said, “We really feel like the people who are not taking it now will not take it then.”

Tex-Mex restaurant chain El Fenix also said it would offer limited plans to its 1,200 workers, covering doctors visits, preventive care and drugs, but not hospital stays or surgery. “What our goal was all along was to make [offering coverage] financially palatable for the company as a whole, so we didn’t do damage and have to let people go or slow down our growth,” said Brian Livingston, chief financial officer of Dallas-based Firebird Restaurant Group LLC, owner of El Fenix.

For more:  http://online.wsj.com/article/SB10001424127887324787004578493274030598186.html

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by | May 18, 2013 · 6:48 am

Hospitality Industry Legal Risks: EEOC Issues Revised Protections Against “Disability Discrimination” Including “Employees With Cancer, Diabetes, Epilepsy And Intellectual Disabilities”

Disability discrimination also occurs when a covered employer or other entity treats an applicant or employee less favorably because she has a history of a disability (such as cancer that is controlled or in remission) or because she is believed to have a physical or mental impairment that EEOCis not transitory (lasting or expected to last six months or less) and minor (even if she does not have such an impairment).

The law requires an employer to provide reasonable accommodation to an employee or job applicant with a disability, unless doing so would cause significant difficulty or expense for the employer (“undue hardship”).

The law also protects people from discrimination based on their relationship with a person with a disability (even if they do not themselves have a disability). For example, it is illegal to discriminate against an employee because her husband has a disability.

The U.S. Equal Employment Opportunity Commission (EEOC) today issued four revised documents on protection against disability discrimination, pursuant to the goal of the agency’s Strategic Plan to provide up-to-date guidance on the requirements of antidiscrimination laws.

The documents address how the Americans with Disabilities Act (ADA) applies to applicants and employees with cancer, diabetes, epilepsy, and intellectual disabilities. These documents are available on the agency’s website at “Disability Discrimination, The Question and Answer Series,” http://www.eeoc.gov/laws/types/disability.cfm.

“Nearly 34 million Americans have been diagnosed with cancer, diabetes, or epilepsy, and more than 2 million have an intellectual disability,” said EEOC Chair Jacqueline A. Berrien. “Many of them are looking for jobs or are already in the workplace. While there is a considerable amount of general information available about the ADA, the EEOC often is asked questions about how the ADA applies to these conditions.”

In plain, easy-to-understand language, the revised documents reflect the changes to the definition of disability made by the ADA Amendments Act (ADAAA) that make it easier to conclude that individuals with a wide range of impairments, including cancer, diabetes, epilepsy, and intellectual disabilities, are protected by the ADA. Each of the documents also answers questions about topics such as: when an employer may obtain medical information from applicants and employees; what types of reasonable accommodations individuals with these particular disabilities might need; how an employer should handle safety concerns; and what an employer should do to prevent and correct disability-based harassment.

For more:  http://www.eeoc.gov/eeoc/newsroom/release/5-15-13.cfm

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by | May 17, 2013 · 5:46 am

Hospitality Industry Legal Risks: Texas Restaurant Sued For “Negligence” After Patron Drinks Beer Containing “Lye-Like Cleaning Agent”; Seeks $100,000 For Medical Costs And Damages

“…the restaurant had used the lye-like cleaning agent to disinfect the Budweiser keg that morning but had failed to properly rinse the container Hospitality Industry Injury Lawsuitsbefore refilling it with the beer (the plaintiff) would later drink…he is seeking between $50,000 and $100,000 from Red Lobster and the company that cleaned the Dallas location’s beer tap system to cover medical expenses and compensate for his physical pain…”

Though it’s an isolated incident, a man from Panama City, Fla., claims he was on the receiving end of Red Lobster’s worst nightmare when he was scorched with potassium hydroxide — lye — from a Budweiser he drank during a business lunch in Dallas earlier this month. According to The Dallas Observer, Justin Grogg took a sip of his beer and immediately felt his throat, esophagus and stomach starting to burn.

According to Grogg’s lawsuit, he got the attention of the restaurant’s manager, who told him to “drink water and go to the hospital.” The complaint alleges the manager knew that the beer tap system had been cleaned that morning with potassium hydroxide, which is caustic and can cause severe bodily harm if swallowed.

Doctors treated Grogg quickly, but he still experienced “severe pain” and was told he could develop “esophageal strictures, esophageal reflux changes, and/or pharyngeal infection in the future as a result of the ingestion of the potassium hydroxide.”

For more:  http://money.msn.com/now/post.aspx?post=1eb6230e-9215-4124-bd5f-5c9eb5ff49ce

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by | May 16, 2013 · 5:50 am

Hospitality Industry Security Risks: Thirty Arizona Hotels Burglarized By “Electronic Door Hackers” Using Portable Programming Devices; TV’s, Laptops And Credit Cards Stolen

“…Surveillance video showed the suspects, both white males in their 20s, entering the hotel and then leaving with the victim’s suitcases… some Onity Electronic Lock30 local hotels — probably more — have been targeted by hotel hackers. Investigators believe there are more suspects than those caught on surveillance video…hotel hacking is not just a local problem. Because the technology used to open the electronic locks is so easy to obtain and use, hotel hacking is growing issue nationwide…”

A man and a woman have been burglarizing hotel and motel rooms in the Easy Valley and now Silent Witness is offering a reward for information about them. According to Silent Witness, the pair, dubbed “Hotel Hackers,” used portable programming devices to get into the rooms at various locations in Mesa, Tempe, Scottsdale and possibly Avondale. It’s not clear how many locations the pair has hit, but Silent Witness said the crime spree started on Feb. 25.

The suspects have stolen TVs, bedding, laptop computers and guests’ personal belongings, including credit cards.

Silent Witness released surveillance video (above) and photos of the pair, both of which were taken at a Walmart store where the suspects used a stolen credit card.

For more: http://www.azfamily.com/news/Hotel-Hackers-behind-burglaries-at-hotels-motels-in-East-Valley-207552391.html

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by | May 15, 2013 · 5:44 am

Hospitality Industry Technology Solutions: Hotel And Restaurant “Integrated Ordering Systems” Feature Online Tablets Located On Tables; Increase In Productivity, Inventory Control And Customer Satisfaction

“…By eliminating the traditional step of taking down orders with pen and paper, the hotel has been able to cut down manpower needs Hotel Restaurant Online Tablet Ordering Systemby one staff member per shift (reducing walking time)…”

  • The new system also removes the extra time taken to check the availability of certain items with the kitchen
  • Customer satisfaction has climbed by five percentage points since the system was implemented
  • The new format of ordering allowed us to provide personalized service to patrons who needed it more
  • Sales of food at the atrium lounge have gone up since the automated ordering system was implemented
  • The system also allows guests to give instant feedback about the service, with comments popping up on the employees’ phones.

An initiative that was implemented last November involved linking the hotel’s atrium lounge to a full integrated ordering system. Unlike other restaurants and cafes, where tablet computers are used as electronic menus or ordering devices, the hotel goes one step further. Information is keyed in by patrons and sent via the tablets to mobile phones which are carried by all service staff.

“Guests can self-order and customise their meals by looking through the menu and browsing through the pictures,” said Mr Wehinger. “With the tablet, they can press a ‘call for service’ button, type out dietary restrictions, give feedback and view the inventory level of items which are selling fast or out of stock.

“Instead of waving their hands in the air to get the attention of a waiter, a pop-up with the corresponding table number will appear on the mobile phones issued to our staff. They will then attend to the guests’ needs.”

The atrium lounge, which is manned by about seven employees during the evening peak period, takes up much of the hotel’s fourth floor and spans an area about as large as two basketball courts, so cutting down walking time is a key improvement.

For more:  http://www.asiaone.com/News/Latest%2BNews/Relax/Story/A1Story20130515-422603.html

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