Monthly Archives: February 2013

Hospitality Industry Legal Risks: New York Restaurant And Nightclub Sued By Employee For “Significant Hearing Loss”; Music Volume At 96 Decibels

“…(the club) began offering its employees earplugs and hearing tests…it was then that she discovered her hearing loss. Initially, she said, one of the club’s executives said she could probably work at the door, but she Hospitality Industry Injury Lawsuitswas later told that would not happen. She was also charged retroactively, she said, for additional tests and treatment related to her hearing damage…”

Alexis Clemente knew the music was extraordinarily loud at Lavo, the celebrity playpen in Midtown Manhattan where she worked for two years as a hostess. Ms. Clemente had significant hearing loss in her right ear, most likely caused by noise exposure, an audiologist found. She was told to immediately stop working in loud environments to prevent it from getting worse.

After the test, she told her supervisors about the results, she said, and asked to be placed at the door, slightly removed from the din. But her employers refused, she said, failed to offer her another position, fired her and canceled her health insurance.

This week, she sued. The suit, filed in State Supreme Court in Manhattan, was reported this week by The New York Post.

She often complained about the noise, she said, but her employers did not take action until last summer, after The Times recorded and reported volumes averaging 96 decibels, akin to a power mower, in Lavo’s restaurant. Legally, workers should not be exposed to that volume for over three and a half hours without ear protection. And Lavo employees said the volumes at the downstairs club were far worse.

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Hospitality Industry Property Risks: Hawaii Restaurant Fire Caused By Leak From “Corroded Gas Line Fitting”; $25,000 In Fire And Water Damage

“…the fire was started by a gas leak at a fitting to a kitchen table, which had corroded, said Fire Captain Terry Restaurant FireSeelig, department spokesman…a worker, who was cleaning the kitchen after the restaurant had closed, was treated at the scene for burns to the front of his body before being taken to a burn center…”

A 43-year-old man was taken to the hospital in serious condition Monday after he was burned while cleaning the kitchen of a ramen restaurant in the Mililani Town Center. The flash fire was ignited by a pilot light, which also activated the restaurant’s sprinkler system. The fire was brought under control by 10:30 p.m.

The fire and the water from the sprinkler system caused $25,000 worth of damage in the kitchen of New Genki Ramen at 95-1249 Meheula Parkway.

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“Hospitality Lawyer” January-February 2013 Online Issue Features “Insurance Coverage For Food Service Industry Losses And Business Interruption”

2013 Hospitality Lawyer Jan Feb cover

Click on “Hospitality Lawyer” to view online issue

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Hospitality Industry Health Risks: Florida Hotel Guests Hospitalized With “Flu-Like Symptoms” Were Exposed To High-Levels Of Carbon Monoxide; Broken Exhaust Fans In Boiler Room Caused Gas To Build Up For Days

 “…broken exhaust fans in the building’s boiler room allowed the room to fill with carbon monoxide…a guest staying (next to boiler room) was hospitalized for similar (flu-like) symptoms…but no one made the connection hotel Carbon Monoxide Poisoningto carbon monoxide exposure, and the guest was not tested…firefighters suspect the carbon monoxide level was high since Friday or earlier…”

Guests at a south Fort Myers hotel may have been exposed to dangerous levels of carbon monoxide at least three days before the building was evacuated Monday. Firefighters responded to Crestwood Suites Extended Lodging off U.S. 41 around 12:45 p.m. Monday and discovered high levels of the deadly gas.

Guests were allowed back inside after firefighters shut off the gas and ventilated the building, but two people were hospitalized for exposure. The two hospitalized guests, who were staying near the boiler room, are in good condition and were hospitalized for observation as a precaution, Knudsen said.

Knudsen said firefighters checked carbon monoxide levels after the two guests called Lee County EMS complaining of flu-like symptoms. Responding firefighters noticed the guests’ proximity to the boiler room and suspected their symptoms were caused by an environmental factor.

Firefighters measured the carbon monoxide level in the boiler room at 2,000 parts per million, and in the lobby at 300 parts per million. Exposure to anything above 600 parts per million carries a high risk of death, according to the Agency for Toxic Substances & Disease Registry website. Patients can experience symptoms including drowsiness, weakness, nausea, headaches and coma at levels of 160 to 1,000.

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Hospitality Industry Legal Risks: Texas Club Owner Ordered To Pay $10.5 Million To Family Of Woman Killed By “Monster Truck” In Parking Lot; “Dram Shop” Laws Hold Company Liable For Over-Serving Alcohol To Driver

“…(the plaintiff) sued Crutchfield and High Expectations Hospitality, the corporate name for Spearmint Rhino, pointing to state “dram shop” laws that allow a business to be held liable if it serves alcohol to someone who Alcohol Drink Responsiblywas clearly intoxicated and ended up causing harm to others…”

The parents of a 23-year-old woman killed by a monster truck outside a gentlemen’s club have won a $10.5 million civil verdict against the driver and the club for serving him alcohol. Kasey McKenzie died after she was run over in March 2011 by a pickup truck elevated on monster tires in the parking lot of the Spearmint Rhino club in Dallas. The driver of the truck, Eric Crutchfield, was drunk and has since pleaded guilty to manslaughter.

A Dallas civil jury on Tuesday awarded $4 million to the parents for mental anguish and $3.5 million for loss of companionship, along with about $3 million in other damages and expenses.

Michael Schmidt, an attorney for McKenzie’s parents, said the club served Crutchfield 10 or more drinks and shots on the night of McKenzie’s death. “This case basically is addressing a problem that we have, certainly in Dallas, of irresponsible establishments over-serving patrons and violating the law,” Schmidt said.

Schmidt said McKenzie was hit by Crutchfield’s truck while walking in the parking lot after 2 a.m. on March 17, 2011.

According to a police report, Crutchfield “had no idea he had run over” McKenzie. A blood test after the incident showed his blood-alcohol level was 0.18 percent, more than twice the legal limit.

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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.

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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.

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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.

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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.

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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.

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