Monthly Archives: February 2012

Hospitality Industry Employment Risks: Hotel Management And Owners Must Have Firm And Comprehensive Policies For Hiring And Classifying New Employees


Background checks are routine now, but one size does not fit all, explained Paul Wagner, shareholder of Ithaca, New York-based Stoke Roberts & Wagner. Know the different rules for each jurisdiction.

  • Beware of process and policy around background checks, where decisions might create discrimination issues related to U.S. Title VIII, or the Fair Housing Act, said David Sherwyn, professor at the Cornell University School, of Hotel Administration.
  • Ensure new hires don’t have restrictive covenants from prior employers, said Gregg Gilman, partner with New York-based law firm Davis & Gilbert LLP. Be sure to tell new hires explicitly, “We don’t’ want your former employers’ trade secrets.” “We’re seeing more and more of this kind of litigation,” Gilman said, adding it’s very expensive and disruptive to defend.


 The U.S. Department of Labor’s definition of an independent contractor is not the only factor used in determining who is an employee. The courts use a more expansive test when determining who can file Title VII claims, which prohibits employment discrimination based on race, color, religion, sex and national origin, Sherwyn said. “The issue here is that people sometimes relax a little bit with contractors,” he said. Even if someone is not directly employed by your organization (i.e. a contractor) that person can still bring litigation against you.

  •  In light of increased enforcement by the DOL, companies should have protocols in place before classifying independent contractors, Gilman said. Have a written agreement stating the independent contractor is just that. And avoid the “perma-lancer,” or those permanent freelancers, who are more likely to be classified as regular employees, he said.
  • Self audit often, said Ilene Berman, a partner with Atlanta-based Taylor English Duma LLP. Annually review any exempt employee with “assistant” in the name as well as sous chefs and sales managers. Those are the positions most frequently targeted by plaintiff attorneys.
  • Check local and state laws because exempt in other states does not mean exempt in California, said Nancy Yaffe, partner with Los Angeles-based Fox Rothschild LLP. California is a different beast, she added. You have to analyze employee classifications on a continuous basis.

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Hospitality Industry Property Risks: New York Hotel’s “Fatal Elevator Accident” Caused By Service Company’s “Maintenance Errors”

Maintenance workers failed to enable a door safety circuit on an elevator moments before an advertising executive was killed after stepping into the elevator in an office tower in Midtown Manhattan, according to officials from the city’s Department of Buildings and the Department of Investigations.

According to officials, the workers did three things wrong:

  • They never re-enabled the safety circuit after performing the upgrade and restoring the elevator to normal service.
  • They did not post a warning that work was being performed, as required under the city’s building code.
  • They did not call the Buildings Department for an inspection, as legally required, before putting the elevator back into service.

If the circuit had been working properly, officials said, it would most likely have prevented the elevator from moving abruptly and pinning the executive, Suzanne Hart, inside an elevator shaft. As a result, the Buildings Department is suspending the license of the owner of the maintenance company, Transel Elevator, that performed the work and will seek to have the license revoked.

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Hospitality Industry Terrorism Risks: FBI And Bureau Of Justice Assistance (BJA) Release List Of “Suspicious Activities” Hotels Should Be Aware Of

The FBI and the BJA set up a joint regional intelligence center, a hotline, and published a Release with some tips specifically for hotels and motels:

  • Request specific room assignments or locations.
  • Use cash for large transactions or a credit card in someone else’s name.
  • Arrive with unusual amounts of luggage.
  • Make unusual inquiries about local sites, including government, military, police, communications, and power facilities.
  • Refuse cleaning service over an extended time.
  • Use entrances and exits that avoid the lobby.
  • Abandon a room and leave behind clothing and toiletry items.
  • Do not leave their room.
  • Change their appearance.
  • Leave the property for several days and then return.
  • Thefts of official vehicles, uniforms, identification, and access cards.

    Reports of guest rooms with:
  • Burn marks or discoloration on the walls or door.
  • Unusual odors or liquids seeping from a guest room.
  • Unusual amounts of traffic.

Discovery of unusual items in guest rooms or facility dumpsters:

  • Fertilizer or agricultural products.
  • Chemicals or chemical containers.
  • Fuel or fuel containers.
  • Weapons, ammunition, and explosives.
  • Extremist training manuals or literature.
  • Fraudulent credit cards or documents.

Parked vehicles in isolated areas.

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Hospitality Industry Fire Risks: Hawaii Hotel Restaurant Fire Caused By “Gas Leak Behind Oven”; Originally Thought To Have Started In Grease Trap

“…Firefighters originally believed the fire had been started in the oven’s grease trap. However, twenty minutes later the fire reignited… Firefighters then discovered a gas leak behind the oven. Gas service was cut off to the restaurants fed by the line, and the fire extinguished…”

Fire safety officials will return to the Ala Moana Hotel later Wednesday after a fire broke out overnight at the Royal Garden Chinese Restaurant inside the hotel.  When firefighters arrived at the hotel shortly before 2 a.m., they found hotel staff using fire extinguishers to put out flames on the third floor restaurant.A hotel guest told KITV4’s Ryan Kalei Tsuji he was never alerted by a fire alarm. 
 The Ala Moana Hotel said an initial alarm was sounded, but the fire was quickly contained so guests could remain in their rooms. The hotel said the Honolulu Fire Department determined that a hotel evacuation was not necessary.Read more:

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Hospitality Industry Employee Risks: Pennsylvania Hotel Manager Charged With Felony Theft For “Activating Company Credit Card” And Making Over $20,000 In Purchases

“….(the former manager) …obtained and activated a credit card without the knowledge of the owners of Mifflinburg Hotel Inc./Scarlet D while he was employed as the manager…(he) then made numerous purchases from Oct. 13, 2010, through Oct. 7…”

A former manager at the Scarlet D/Mifflinburg Hotel is facing several felony theft charges after he allegedly activated a credit card in the business’ name and made purchases totaling $20,363.32.

David Alan Burns, 56, of 121 Georgetown Lane, Milton, was arrested and charged with felony counts of forgery-unauthorized act in writing, access device fraud, theft by deception, theft by failure to make required dispositions of funds received and receiving stolen property. He was arraigned and released on $25,000 unsecured bail.

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Hospitality Industry Employment Risks: Tennessee Restaurant Chain Faces “Class Action Lawsuit” Over Classifying Security Guards As “Tipped Employees”

“…employers who rely on the tip credit are advised to determine how much time each tipped employee spends on “non-tipped” activities, and if these “non-tipped” activities constitute more than 20% of the total working time for any shift, the employer must pay the employee the federal minimum wage ($7.25/hour) for all time spent on non-tipped tasks…” 

The issue in Stewart v. CUS Nashville, LLC is whether security guards at Coyote Ugly are “tipped employees” who can lawfully participate in a tip pool. Stewart was a Coyote Ugly bartender, a non-salaried tipped employee. She claims that Coyote Ugly violated the FLSA by requiring employees in her category to contribute their tips to a tip pool so the tips could be shared with, among others, security guards.

 Stewart argues that the security guards are akin to dishwashers or prep cooks and thus do not meet the definition of “tipped employees” who “customarily and regularly receive tips” under 29 U.S.C. § 203(m), (t).

Coyote Ugly argues that, based on their level of customer interaction, including “hollering” to encourage people to enter, checking identification of those who do enter, being stationed in the front of the house with patrons, assisting female patrons onto and off of the bar to dance, picking up glasses and bottles, and otherwise ensuring a safe customer experience, security guards are more akin to bus boys, maître d’s, silverware rollers, sushi chefs, and other front of the house employees who courts have held may properly share in tips.

Although premature to address the merits, the court granted conditional certification to a class of bartenders, barbacks, or waitresses at company-owned Coyote Ugly saloons who were required to share tips with security guards.

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Hospitality Industry Employee Risks: Missouri Hotel Accounting Employee Pleads Guilty To “Stealing $170,000 From Petty Cash” Over Seven Years

Mosier was the director of accounting services at Springfield University Plaza Hotel and Convention Center. She admitted defrauding the hotel for more than seven years, beginning in January 2003, by inflating reports of spending from petty cash and diverting the money to her own bank account.

A southwest Missouri woman faces up to 20 years in prison after admitting she stole nearly $170,000 from a Springfield hotel where she worked.

The U.S. Attorney’s office says 47-year-old Janet R. Mosier pleaded guilty Wednesday to allegations in a federal information charging her with wire fraud.

A sentencing date will be scheduled later.

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Hospitality Industry Health Risks: West Virginia Restaurant Workers Hospitalized After Exposure To Hazardous Chemicals

Nine workers at the IHOP restaurant in the Shops at Trace Fork along Corridor G were taken to the hospital Friday morning after a worker mixed chemicals and released a cloud of hazardous material into the air.

About 50 people were inside the restaurant at about 9:15 a.m. when an employee added the wrong chemical to a dishwasher used to clean restaurant hardware.

South Charleston Fire Department Capt. Virgil White said the two chemicals — a degreaser and a chlorine-based cleaner — are used in routine cleaning at the restaurant and were mixed together in a way that created “hazardous air quality.”

Although the employees are familiar with the cleaning products used, White said, the employee “may have grabbed the wrong bottle to do his mixture with and it created this problem.”

One IHOP employee, who asked not to be identified, said “there was a big cloud of smoke and it filled up the air. It smelled like straight bleach.”

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Hospitality Industry Property Risks: New York Hotel Electrical Panel Overheats Causing Black Smoke And Evacuation Of Guests

“..(the hotel)… will remain closed until an electrical inspection is completed at the hotel…the main electrical panel became too hot, causing black smoke but no fire…”

The Quality Inn, 10 W. Orvis St., and Dar’s Place, which is inside the hotel, were closed after firefighters responded early Monday to a report of smoke originating in the hotel’s electrical room. All power at the hotel was still off as of 5 p.m. Monday, although a generator was providing some lighting.

“It doesn’t look like we’re going to open tonight,” Mr. Stevens said at that time. “There’s still a lot of work to do. What they’re trying to do right now is get the heat turned on in the building.”

When asked if he expected the hotel to open up today, Mr. Stevens replied, “That will depend on what they do tomorrow. There’s a lot of work left to do to get the building up and running.”

Approximately 40 rooms had guests, all of whom were evacuated safely to Emmanuel Congregational United Church of Christ, 39 W. Orvis St. There, guests were served a breakfast courtesy of the church.

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Hospitality Industry Property Risks: California Hotel Suffers Extensive Water Damage To 30 Rooms As “Cast Iron Pipe Connected To Fire Pump” Cracks; Seismic Shifting Possible Cause

“…(the hotel General Manager)…was in her office at 10:30 a.m. Thursday when she realized the carpet was “floating”…The source of the water was traced to a crack in a pipe that connects to a fire pump…a jackhammer was needed to reach the pipe, which is under cement…(the cause of the leak) is theorized (to be) seismic shifting, “not age, because it was cast iron…”

Santa Cruz Dream Inn, the city’s largest hotel, reopened about noon Friday after a 24-hour shutdown triggered by flooding on three floors that forced the hotel’s evacuation and relocation of 130 guests.

General manager Robin Donovan said Friday morning her staff has been working 24/7 to reopen the 163-room hotel. Because of the water damage, 30 rooms on the first three floors are “out of order,” she said.

Damages range from “light” to “extensive,” she added, estimating it would take 10 days up to three weeks to reopen those rooms. A dollar estimate was not available.

The hotel was empty Thursday night with guests relocated to other accommodations, including the Beach Street Inn & Suites, Chaminade, Holiday Inn Express and Scotts Valley Hilton.

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