Tag Archives: Class-Action Lawsuit

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 2, 2012 · 6:48 am

Hospitality Industry Legal Risks: "Data Breach Class-Action Lawsuits" Are Increasing As Judges Widen View To Include "Future Damages"; Average Settlements Of $2500 Per Plaintiff

“…Until a couple of years ago, courts would routinely dismiss lawsuits stemming from data breaches, such as the latest in South Carolina, unless the victims could show specific damages. Judges have since widened their view and are awarding class-action status to lawsuits that can show actual damages or a real possibility of future damages…”

The payout for companies on the losing side of a class-action suit can be substantial. A recent survey of data breach litigation found the average settlement award of $2,500 per plaintiff, with mean attorney fees reaching $1.2 million, according to a study by Temple University Beasley School of Law.

How federal courts define the damages people suffer from data breaches is broadening dramatically, leaving unprepared companies at greater risk of big payouts in class-action lawsuits, lawyers from a prominent law firm say.

Jeffrey Vagle, a lawyer with Pepper Hamilton, described as a “sea change” judges’ thinking. “Courts are starting to pick up on the fact that the data that can get out there can cause serious harm, maybe not immediately, but sometime in the near future,” Vagle said.

Examples include a case in which a laptop containing unencrypted personal data of Starbucks employees was stolen. While there was no evidence that the data was misused, the Ninth Circuit Court ruled in 2010 that the risk alone was enough to warrant a lawsuit, Vagle and colleague Sharon Klein said in a Client Alert published on the law firm’s website.

Data breaches have become a fairly common occurrence among companies of all sizes. Last year, 174 million data records were loss in 855 separate incidents, according to a recent report from Verizon. A 2011 Ponemon Institute survey of 583 IT and IT security professionals in the U.S. found that 90 percent of the organizations they represented had suffered at least one data breach.

To lessen potential damages, Pepper Hamilton recommends beefing up technical and physical security wherever possible. While no technology is 100% hacker proof, courts tend to compare what a company has in place to what is considered best practices for businesses of the same size and in the same industry. Taking all reasonable steps to prevent data theft can lessen damages.

Also, information shouldn’t be linked to individuals, unless absolutely necessary, and a notification policy needs to be in place, so people affected by data breaches are warned as quickly as possible.

A bill pending in Congress would set a national standard for data breach notification, replacing the variety of state laws that exist today. Introduced in June, the Data Security and Breach Notification Act would also set maximum damages and define what is considered a breach.

Irrespective of the bill’s fate, companies need to establish clear policies and procedures for handling data breaches when they occur. Klein recommends a dry run to ensure that everyone understands the steps that need to be taken.

“Many companies still believe that it only happens to the other guy,” Klein said. “And because of that, [they] have not done the blocking and tackling and preventative work upfront.”

For more:  http://m.csoonline.com/article/720128/courts-widening-view-of-data-breach-damages-lawyers-say?goback=.gde_922967_member_180838402

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by | October 19, 2012 · 6:46 am

Hospitality Industry Legal Risks: Florida-Based Restaurant Group Faces Five Separate "Federal Labor Law Class-Action Lawsuits"; Employees Required To Work "Off The Clock" And Skip Required Breaks

“…Lawsuits filed by the Mexican-American Legal and Education Fund accuse Darden Restaurants—which owns the Capital Grille, Red Lobster and Olive Garden chains—of violating state and federal labor laws…the suits claim the restaurants regularly ask employees to work off the clock, skip legally required breaks and report to work when sick…”

The world’s largest full-service restaurant ownership company faces five separate class-action lawsuits filed by a group that works to protect restaurant workers’ rights.

The litigation began as a single class-action lawsuit filed in federal court in Chicago, with state class-action claims covering workers in Illinois, as well as California, Florida, Maryland and New York. Eventually, the lawsuit was severed into five jurisdictions due to the large size of the classes and the complexity of the various state claims. Five regional U.S. District Courts will hear the cases.

The lawsuits were initiated by the Restaurant Opportunities Cen­­ters United, which seeks to improve wages and working conditions for low-wage restaurant workers.

For more:  http://www.businessmanagementdaily.com/33010/worker-advocates-cook-up-five-suits-against-restaurant-group

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by | October 18, 2012 · 6:12 am

Hospitality Industry Health Risks: North Carolina Restaurant Settles "Food Contamination" Class-Action Lawsuit For $375,000; Hundreds Had To Be Vaccinated For Hepatitis Virus

“…the lawsuit alleged that the restaurant chain exposed customers to potentially contaminated food or people, cost them wages and medical expenses, and caused fear and physical pain…a $375,000 fund has been set up by the restaurant’s parent company… to settle a class-action lawsuit…”

A lawsuit has been settled involving hundreds of people who had to be vaccinated after eating at a Fayetteville restaurant last year. The Fayetteville Observer reported those who were immunized after eating at the Olive Garden restaurant are eligible for payments of up to $250.

Hundreds of people got vaccinations after learning that one of the restaurant’s workers had tested positive for the virus, which causes liver inflammation.

Florida-based GMRI denied any wrongdoing but said it wanted to settle to end the litigation.

For more:  http://www.northjersey.com/news/health/174592761.html

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by | October 5, 2012 · 6:20 am

Hospitality Industry Legal Risks: Workers File Class-Action Lawsuit Against Los Angeles Hotel For "Millions Of Dollars In Unpaid Wages"

“…(the suit) alleges that management has routinely required them to work through required lunch breaks and rest periods and after clocking out…Housekeepers also claim hotel management refused to reimburse them after requiring them to buy cleaning supplies such as sponges and gloves to clean guest bathrooms…”

The suit also alleges that a majority of Holiday Inn LAX employees are earning less than $11.97 per hour, the minimum living wage for hotel workers in the LAX corridor.

Workers at the Holiday Inn Los Angeles International Airport filed a class action lawsuit on Thursday demanding millions of dollars in alleged unpaid wages. A non-union group of bartenders, housekeepers, cooks and other workers filed the suit with support from L.A. hospitality labor union Unite Here Local 11.

Adrian Valencia, general manager at Holiday Inn LAX, said the hotel was surprised by the lawsuit.

“We had never been contacted by the union until Monday, when they stormed in yelling and screaming into the administration offices,” he said. “We pay the annual living wage increase as of July 1 each year and we have some of the best scores for a Holiday in as far as cleaning. We use proper procedures here at the hotel.”

Randy Renick, the attorney representing the workers, said the goal of the suit is to address long-standing labor grievances.

For more: http://www.labusinessjournal.com/news/2012/oct/04/lax-hotel-employees-file-suit-unpaid-wages/

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by | September 24, 2012 · 6:30 am

Hospitality Industry Legal Risks: "Tip Pool Skimming" Class-Action Lawsuit Filed Against New York Restaurant; Over 100 Former Waitstaff Claim Managers Took 26% Of Tips

“…The suit, filed by more than 100 people who’ve worked there for the last six years, also claims that Les Halles paid waitstaff less than the $5 minimum wage for food service employees…”

Anthony Bourdain’s Les Halles is the latest restaurant to be hit with a lawsuit from waitstaff alleging that management skimmed from their tipping pool. Both of the restaurants’ locations are named in the suit, which according to the Post alleges that floor managers took 26% of the pool.

“In my experiences at Les Halles, management was, if anything, unusually scrupulous about these things,” Bourdain, the chef-at-large, said, referring to the group of people who almost certainly do not raid the bar after-hours while blasting a Kool & The Gang Pandora station through the restaurant’s speakers.

We always preferred pooling as opposed to the vicious, territorial struggle of solo-sectioning, but this could be Bourdain’s biggest stumbling block since he ate a bunch of flesh in front of starving rich people.

For more:  http://gothamist.com/2012/09/23/anthony_bourdains_les_halles_sued_f.php

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by | September 18, 2012 · 6:12 am

Hospitality Industry Legal Risks: Pennsylvania Restaurant Franchise Settles "Class-Action Discrimination Lawsuit"; Employees Denied Promotion Can Get Compensation For "Lost Opportunities"

The lawsuit said that the company relegated black employees to  back-of-the-kitchen work and denied them promotional opportunities…Under the settlement, anyone who worked for Covelli’s Panera franchises from  Jan. 11, 2008, through Jan. 11, 2012, for more than one year, and applied for or  wanted a promotion, can get compensation for alleged lost opportunities…for  each hour worked after their first year, they can get 70 cents — roughly what  they would have gotten through a one-level promotion.

Around 200 to 300 current or former employees of Panera Bread franchisee  Covelli Enterprises stand to get payments under a class action lawsuit  settlement that won preliminary approval from a federal judge at a hearing  today.

Attorney Sam Cordes, who represents Mr. Vines and the class of employees,  told U.S. District Chief Judge Gary Lancaster that the settlement terms will  soon be published in newspapers in areas in which Covelli franchises  operate.

Judge Lancaster gave the settlement his initial nod, though he is expected to  hold a hearing to hear any objections from class members. Neither Mr. Cordes nor the attorney for Covelli would comment after the  hearing. Neither had an estimate of the costs to the firm.

In addition to the payments to black employees, Mr. Vines would get $10,000  and Mr. Cordes $66,000 under the settlement agreement.

Read more: http://www.post-gazette.com/stories/local/region/panera-class-action-settlement-gets-preliminary-approval-653740/#ixzz26pWk7kLY

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by | September 16, 2012 · 7:31 am

Hospitality Industry Legal Risks: Restaurants Forced To Settle "Class-Action Lawsuits" For "Wage And Hour" Claims; Potential Damages Are Double Wages Owed Dating Back 2-6 Years

“… a restaurant  is permitted to require front-of-the house employees to “pool” their tips, the  pool may be illegal if it is shared with employees who interact with customers  only indirectly. And if the pool is illegal, regardless of the reason, the  restaurant can incur enormous liabilities to employees, even if those employees  each collect hundreds of dollars per week in tips, which is often the case…”

The hospitality industry is under siege by attorneys who stand to gain big  fees from huge class-action settlements. The same gains do not apply, however,  to the waitstaff and other restaurant employees on whose behalf these lawsuits  are filed.

On a federal level, wage and hour claims are brought under the Fair Labor  Standards Act, passed in the 1930s to address intolerable conditions, such as  child labor and six-day workweeks of 10- to 12-hour days without overtime pay.  Such conditions were long ago eradicated from most restaurants and other  establishments, but the FLSA, as well as state wage and hour laws, have  continued to expand by prohibiting common practices that many eateries have  followed for years.

When faced with class actions, most restaurants have few options. Potential  damages often amount to double the wages or tips owed, dating back from two to  six years. Prejudgment interest rates can be as high as 9%, depending on the  state, and plaintiffs’ “reasonable” attorneys’ fees can be enough to put many  operations out of business. Not included here are the costs of defense counsel,  the hit to the restaurant’s reputation, and the disruption of daily operations.  For many owners, settling the plaintiffs’ claims, regardless of their merit, is  the most reasonable business decision.

Read more: http://www.crainsnewyork.com/article/20120916/OPINION/309169972#ixzz26e5yTkfQ

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by | September 6, 2012 · 6:07 am

Hospitality Industry Legal Risks: California Restaurant Chain Faces Class Action Lawsuit For "Race, Color And Age Discrimination"

The suit alleges that In-N-Out Burger “recruits, hires and maintains a work force that is predominantly under the age of 40 and/or non-African-American.”…the suit also seeks back pay as well as compensatory damages and punitive damages on behalf of people who have been unlawfully denied employment with In-N-Out Burger.

A Berkeley law firm has filed a class action lawsuit alleging that Irvine-based restaurant chain In-N-Out Burger maintains hiring practices that discriminate on the basis of race, color and age. The suit, which was filed in Alameda County Superior Court on Tuesday, was filed on behalf of two black men from Oakland over the age of 40 who recently applied for jobs at In-N-Out Burger restaurants in Oakland and San Francisco but weren’t hired.

The suit says both men were qualified for the jobs they applied for and alleges that they weren’t hired because of their race and their age.

The restaurant chain has 210 restaurants in California and thousands of employees but the suit charges that “very few” are over 40 and/or black.

Steve Tidrick, the attorney for the plaintiffs, said the suit alleges that In-N-Out Burger has “a pervasive policy of discrimination on the basis of race, color and age” in its hiring practices and seeks to end those practices through injunctive relief.

For more:  http://www.mercurynews.com/breaking-news/ci_21477996/oakland-lawsuit-accuses-n-out-burger-racial-and

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by | May 30, 2012 · 6:53 am

Hospitality Industry Compliance Risks: Hotels Must Have "Written ADA And Local Accessibility Policies And Procedures" To Avoid Costly Litigation

 “…(without) written ADA and local accessibility policies and procedures for your hotel or timeshare property, then you are taking unnecessary risks…New Guest Room Requirements for Mobility and Communication Features requirements apply to new and altered public accommodations…”

What Can You Do to Avoid Liability?

  • Training – Training is critically important, and it can help prevent expensive litigation. Thought must go into the preparation of an accessible room, and the approach must be different depending on the disability of the individual who has booked the room. JMBM performs site inspection surveys and works with hotel operators to train the staff to address the needs and concerns of individuals with disabilities.
  • ADA Surveys/Site Inspections – Even if you own or operate a newly constructed property, an ADA Survey will likely reveal areas of non-compliance and rooms for improvement in policies and procedures. By working with a CASp (Certified Access Specialist program) certified consultant, you may enjoy certain protections against liability while you seek to bring your property into compliance.
  • Website Accessibility – This is an area of focus for the Department of Justice. This area is evolving, but your website must already comply with all current reservation requirements.

For more:  http://hotellaw.jmbm.com/2012/05/ada_compliance_panel.html

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