As featured in #WorkforceWednesday: This week, we look at labor law and pay developments from the National Labor Relations Board (NLRB) and in California.
Last week, in Winegard v. Newsday LLC, the U.S. District Court for the Eastern District of New York issued a decision that may finally tee up the issue of website accessibility to be directly addressed by the Second Circuit and provided businesses without a brick and mortar presence with unexpected relief by dismissing a serial plaintiff’s putative class action lawsuit alleging that a newspaper’s failure to provide closed captions of online videos for individuals who are deaf or hard of hearing violated Title III of the Americans with Disabilities Act (“Title III” or ...
With the start of the New Year, employers in the hospitality sector should prepare for new state- and local- minimum wage increases for their non-exempt employees. To help multi-jurisdictional employers easily navigate these changes, we have prepared the chart below, which summarizes the new minimum wage rates that have taken effect on January 1, 2020, unless otherwise indicated. Check back here in June for a summary of the new minimum wage rates that will take effect July 1, 2020.
| Jurisdiction | Current Minimum Wage | New Minimum Wage |
| Alaska | $9.89 | $10.19 |
| Albuquerque NM (No Benefits) |
Rules relating to tip credit and pooling have resulted in significant debate among legislators, regulators, and the courts, leading to confusion, further litigation, and, in many cases, substantial liability or settlements involving employers that operate in the hospitality industry. Today, the U.S. Department of Labor (“DOL”) published proposed rulemaking that aims to bring greater clarity to the morass of tip-related legislation, as well as previous agency rules and interpretations. I describe below some of the notable elements of these proposed rules.
The proposed ...
Earlier this summer, we reported on ground-breaking legislation in New Jersey that requires hotels with more than 100 guest rooms to supply hotel employees assigned to work in a guest room alone with a free panic button device and to adhere to a specific protocol upon activation of a panic button device by a hotel employee. In what may signal the start of a national trend, Illinois just became the second state to pass similar legislation targeting not only hotels but also casinos located within its jurisdiction.
Under the newly created Hotel and Casino Employee Safety Act (Article 5 of ...
Our colleagues Jeff Landes, Jeff Ruzal, and Adriana Kosovych are featured on Employment Law This Week - Predictive Scheduling Laws, the New Normal? - Deep Dive Episode speaking on predictive scheduling laws and the impact on business. Taking the guesswork out of scheduling for wage workers is an attractive proposition for regulators. Laws that require employers to publish employee work schedules a certain amount of time in advance so that employees (especially those in the hospitality and retail industries) can have greater flexibility and work-time predictability to deal ...
In the new issue of Take 5, our colleagues examine important and evolving issues confronting owners, operators, and employers in the hospitality industry:
By Michael Kun
Several years ago, employees in California began filing class action lawsuits against their employers alleging violations of the “suitable seating” provision buried in the state’s Wage Orders. The unique provision requires some employers to provide “suitable seating” to some employees when the “nature of their work” would “reasonably permit it.”
The use of multiple sets of quotation marks in the previous sentence should give readers a good idea just how little guidance employers have about the obscure law.
The California Supreme Court is now ...
By Matthew S. Groban and Robert S. Groban, Jr.
The OCAHO has recently issued two Form I-9 enforcement decisions involving hospitality and construction industry employers that should be of interest to all our clients.
In United States v. Symmetric Solutions, Inc. d/b/a Minerva Indian Cuisine, 10 OCAHO no. 1209 (OCAHO February 6, 2014), an OCAHO Administrative Law Judge ("ALJ") upheld a $77,000 fine imposed by Immigration Customs Enforcement ("ICE") against a restaurant in Alpharetta, Georgia ("Restaurant"), for Form I-9 violations. ICE claimed that the Restaurant failed to ...
By Kara Maciel
Our national hospitality practice frequently advises restaurant owners and operators on whether it is legal for employers to pass credit card swipe fees onto employees or even to guests, and the short answer is, yes, in most states. But whether an employer wants to actually pass along this charge and risk alienating their staff or their customers is another question.
With respect to consumers, in the majority of states, passing credit card swipe fees along in a customer surcharge became lawful in 2013. Only ten states prohibit it: California, Colorado, Connecticut ...
By: Kara Maciel, Adam Solander and Lindsay Smith
As the Employer Mandate compliance deadline looms for employers under the Affordable Care Act (“ACA”) and employers are closely monitoring employee hours, it is critical that employers take appropriate and lawful steps to record all hours worked by an employee. If employers try to play games and manipulate how time records are maintained, they could find themselves in hot water under both the ACA and the Fair Labor Standards Act (“FLSA”).
In what appears to be one of the first lawsuits challenging how hours are recorded under the ACA, an employee filed a putative collective action against Sun Holdings, LLC, a fast food franchisee. The employee, a busboy at a Golden Corral restaurant, alleged that his managers required him to work under his real name and an alter ego to avoid paying him for all hours worked. This set-up allegedly was designed to avoid having to pay overtime compensation under the FLSA and to count him as a full-time employee eligible to receive health benefits under the ACA.
Accurate calculation and recording of the total number of hours worked by an employee is essential to compliance with the provisions of both the FLSA and the ACA. Under the FLSA, an employer must pay an employee at least the minimum wage for all hours worked. An employer must also provide overtime compensation at one and a half times the employee’s regular rate of pay for any hours worked in excess of 40 hours per week, unless that employee is classified as exempt. Therefore, if an employer attributes some amount of time worked by one employee to an alter ego through which the employee cannot claim his time, the employee may be deprived of the overtime compensation he has earned.
Additionally, the ACA only provides benefits to employees who reach a certain amount of hours and binds employers with a certain amount of employees meeting that hour threshold. The ACA applies to employers with 50 or more employees working 30 or more hours per week. Only those employees working 30 hours or more per week are entitled to the health care coverage required by the ACA. Therefore, an employee may lose the benefits to which he would otherwise be entitled if a portion of his hours worked is attributed to someone else, causing him to fall below the 30-hour minimum. Furthermore, an employer may avoid the obligations of the ACA if it records 30 hours or more of work time for less than 50 of its employees. Although the Employer Mandate, which puts the employer-provided coverage into effect, does not kick in for large employers until January 1, 2015, applicability of the ACA depends upon the size of the affected workforce during the prior calendar year.
A claim of this kind could be very costly for an employer because, as is the case here, such claims are often brought as collective actions. In this case, the employee filed his claim on behalf of himself and all others similarly situated. Although the amount of unpaid wages and liquidated damages he seeks only amounts to approximately $15,000.00, the franchisee owns roughly 400 restaurants in Texas and Florida. Thus, a court award, or even a settlement, could be quite significant.
These allegations demonstrate the importance of correctly tracking employee hours and ensuring that an employee receives compensation and benefits in accordance with the total amount of hours worked. Often times, this may mean training your managers as to the correct protocol for recording and compensating hours worked and monitoring to ensure managers are following that protocol.
Importantly, this case forecasts what could be an emerging and growing area of litigation under the ACA, so employers must be ever vigilant about putting into practice protocols that ensure they are complying with the ACA and not manipulating hours to avoid the Employer Mandate’s requirements. Considering that an analysis under the Employer Mandate’s look-back methodologies should be done this year, any changes to employees’ hours should be closely reviewed with legal counsel. Although overtime compensation and benefits coverage can create increased financial burdens on employers, the cost of not complying can be even greater.
Most unionized hospitality employers have collective bargaining agreements which require contributions to multiemployer pension funds. In recent years, many of these pension funds have slipped into “endangered” or even “critical” status, and employers who have exited these funds have been hit with substantial assessments of withdrawal liability. These assessments often amount to millions of dollars in withdrawal liability.
Many employers are unfamiliar with the complicated procedures for contesting an assessment of withdrawal liability from a multiemployer ...
In a recent Law360 article, "NLRB Social Media Push Looms Large for Hospitality Sector" (subscription required), our colleague Mark Trapp comments on the importance for unionized and non-unionized hospitality employers to review their social media policies.
Following is an excerpt:
With the National Labor Relations Board increasingly interjecting into non-union issues, hotels, restaurants and other labor-intensive hospitality companies need to brace for potential claims and tread carefully when crafting social media policies for employees, experts say.
Over the last ...
By: Kara M. Maciel
The following is a selection from the Firm's October Take 5 Views You Can Use which discusses recent developments in wage hour law affecting the hospitality industry.
IRS Will Begin Taxing a Restaurant’s Automatic Gratuities as Service Charges
Many restaurants include automatic gratuities on the checks of guests with large parties to ensure that servers get fair tips. This method allows the restaurant to calculate an amount into the total bill, but it takes away a customer’s discretion in choosing whether and/or how much to tip the server. As a result of this ...
Our colleague Kara M. Maciel of Epstein Becker Green wrote a wage and hour update in this month’s Take 5 labor and employment newsletter.
Here’s a preview of the five items:
1. IRS Will Begin Taxing a Restaurant's Automatic Gratuities as Service Charges
2. The New DOL Secretary, Tom Perez, Spells Out the WHD's Enforcement Agenda
3. DOL Investigates Health Care Provider and Obtains $4 Million Settlement for Overtime Payments
4. Federal Court Strikes Down DOL Tip Pooling Rule
5. Take Preventative Steps When Facing WHD Audits
Read the full article here.
By: Robert S. Groban, Jr. and Matthew S. Groban
On June 28, 2013, a District of Columbia restaurant sued its former executive chef to recover the expenses incurred to secure his H-1B visa. See Rasika West End LLC v. Tyagi, No. 13-0004426 (D.C. Super. Ct. filedJune 28, 2013). According to the complaint, the employer entered into a thirty-six (36) month contract with the H-1B employee, and claimed that it would take that long to recover, among other things, funds spent to secure the approved H-1B petition the employee needed to assume the position. The complaint further alleges ...
By: Kara M. Maciel
Many restaurants include automatic gratuities on guests’ checks with large parties to ensure servers get fair tips. This method allows the restaurant to calculate an automatic gratuity or tip into the total bill, but it takes away the customer’s discretion in choosing whether and/or how much to tip the server. As a result of this removal of a customer’s voluntary act, the IRS has decided that it will separately tax automatic gratuities.
In 2012, the IRS issued a ruling to clarify earlier tax guidance on tips, particularly automatic gratuities, but ...
On September 18, 2013, our hospitality practice attorneys, Kara Maciel and Mark Trapp, have the pleasure of speaking at the Lodging Conference in Scottsdale, Arizona on key financial and legal issues under the Americans with Disabilities Act impacting hotel owners and managers when acquiring, selling, developing or managing properties.
Under the 2010 ADA Standards, which became effective in March of 2012, hotels must take steps to remove access barriers for individuals with disabilities. The new federal standards encompass some key changes for hotel owners ...
By: Kara Maciel
Last week, I had the honor of attending the Resort Hotel Association’s (“RHA”) Annual Conference at The Edgewater Hotel in Seattle. RHA is comprised of 130 independently-owned resorts, hotels, city clubs and spas in the United States and specializes in insurance programs that address the risks unique to the lodging industry. For the second year in a row, RHA invited me and my colleague, Jordan Schwartz, to speak on the Americans with Disabilities Act (“ADA”) and public accommodations issues that hotel and lodging operators face. The room was packed and ...
By Eric J. Conn, Head of the OSHA Group at Epstein Becker & Green, P.C.
Last month, OSHA issued an enforcement memorandum directing inspectors to scrutinize whether employers provide and maintain adequate means of exit;
i.e., unlocked, unobstructed, and clearly marked exit doors and exit routes and doors that comply with 29 C.F.R. 1910 Subpart E - Means of Egress (specifically, the various requirements of 1910.36). The memo was issued in response to a deadly explosion and ammonia release at a poultry processing plant in China on June 4, 2013, in which at least 120 employees lost their lives, many because they were unable to exit the plant due to blocked or locked exits.
In the enforcement memorandum, OSHA announced that:
“During inspections of all workplaces [Compliance Safety & Health Officers] should be mindful of whether the employer has provided and maintained adequate means of egress from work areas; e.g., adequate number of exit routes are provided, exit routes are free and obstructed, and exit doors are not locked.”
This list of items for review is consistent with the criteria OSHA identified in its Emergency Exit Routes Fact Sheet. Here are the basic requirements for complying with 1910.36 set forth in OSHA’s regulations and the Fact Sheet:
- Employers must determine how many exits routes are required in its building. As a general rule, workplaces must have a minimum of two exits, and possibly more based on the number of employees, the size of the building, and the arrangement of the workplace. One exit route may be allowed if the size of the building, its occupancy, or arrangement allows all employees to evacuate safely.
- Exit routes must be maintained unobstructed,
and the exit doors must remain unlocked from the inside. Specifically, exit routes must be free of stored materials, equipment, and especially explosive or highly flammable furnishings. Exits doors must be conspicuous, visible, free of decoration, and unlocked from the inside. - Exit routes and doors must be properly labeled and maintained. Proper labels include signs that read “EXIT” or “TO EXIT” in plain legible letters, and maintained with adequate lighting. Doors or passages along the exit route that are not exits and do not lead to exits must be marked as “NOT AN EXIT” or labeled such that their non-exit purpose is obvious (e.g., store room, office, etc.).
Although the Enforcement Memorandum features the tragic anecdote about the Chinese poultry plant, OSHA’s Director of the Directorate of Enforcement specifically instructs his enforcement team to look out for egress issues in inspections at “all workplaces.”
By Adam C. Abrahms and Steven M. Swirsky
In another major defeat for President Obama’s appointees to the National Labor Relations Board (NLRB or Board), the US Court of Appeals for the DC Circuit found that the Board lacked the authority to issue a 2011 rule which would have required all employers covered by the National Labor Relations Act (the “Act”), including those whose employees are not unionized, to post a workplace notice to employees. The putative Notice, called a “Notification of Employee Rights Under the National Labor Relations Act,” is intended to ostensibly ...
We are pleased to announce the release of a new version of our Wage & Hour Guide app that puts federal and state wage-hour laws at employers’ fingertips. To download the app, click here
The new version features an updated main screen design; added support for iOS 6, iPhone 5, iPad Mini, and fourth generation iPad; improved search capabilities; enhanced attorney profiles; expanded email functionality for sharing guide content with others; and easier access to additional wage and hour information on EBG’s website, including the Wage and Hour Division Investigation Checklist and ...
By: Allen B. Roberts
I wrote the February 2013 version of Take 5 Views You Can Use, a newsletter published by the Labor and Employment practice of Epstein Becker Green. In it, I discuss an alternative view of five topics that are likely to impact hospitality employers in 2013 and beyond. One topic involved the potential for labor organizing by pop-up unions in break-out units.
Despite some perceptions of cohesiveness and political acumen, influence and wherewithal following the 2012 election cycle, labor unions represent only about 7.3 percent of the private sector ...
Epstein Becker Green is pleased to announce the availability of a Wage and Hour Division Investigation Checklist, which provides hospitality employers with valuable information about wage and hour investigations and audits conducted by the U.S. Department of Labor (DOL). Like EBG’s first-of-its kind Wage and Hour App, which provides detailed information about federal and state laws, the Checklist is a free resource offered by EBG.
The Checklist provides step-by-step guidance on the following issues: preparation before a Wage and Hour Division investigation of the DOL; ...
I wrote the January 2013 edition of Take 5: Views You Can Use, a newsletter published by the Labor and Employment practice of Epstein Becker Green.
In it, I summarize five actions that hospitality employers should consider taking in 2013 as the DOL steps up its audit efforts under the leadership of the reenergized Obama administration,
- Assess the Workforce
- Choose Whether to “Pay” or to “Play”
- Evaluate Existing Wellness Programs and/or Implement New Wellness Programs to Enhance Employees’ Health Profiles and to Avoid or Minimize the “Cadillac Tax”
By: Kara M. Maciel, Adam Solander, Brandon Ge and Philo Hall
As we blogged about previously, the Affordable Care Act provides unique compliance obligations for hospitality employers, many of whom employ large numbers of part-time and seasonal employees. On December 28, 2012, the Internal Revenue Service (“IRS”) released a Notice of Proposed Rulemaking (“NPRM”) on Shared Responsibility for Employers Regarding Health Coverage (the “Employer Mandate”) under the Affordable Care Act (“ACA”). The NPRM largely incorporates previously released guidance on ...
With Election Day tomorrow, employers must be prepared to respond to employees’ request for time off to vote. While there are no federal laws that require such leave, many states require that employees be provided with leave to vote. Some states, such as California, Maryland and New York, require this leave to be paid. Failing to comply with these requirements could result in financial penalties.
As illustrated below, state requirements vary greatly with regard to whether the leave must be paid, when employees are eligible for the leave, the length of the ...
Kara M. Maciel, contributor to this blog and Member of the Firm at Epstein Becker Green, has released the "HR Guide for Responding to Natural Disasters." Following is an excerpt:
Natural disasters such as hurricanes, earthquakes, and tornadoes have posed unique human resource challenges for employers. While many employers are working around the clock on recovery efforts, other employers find themselves unable to function for extended periods of time because of damage or loss of utilities.
The economic effects of a natural disaster will have long-term consequences on businesses ...
By: Kara Maciel
Hurricane Sandy is approaching this weekend, so hospitality employers along the East Coast should refresh themselves on the wage and hour issues arising from the possibility of missed work days in the wake of the storm.
A few brief points that all employers should be mindful of under the FLSA:
- A non-exempt employee generally does not have to be paid for weather-related absences. An employer may allow (or require) non-exempt employees to use vacation or personal leave days for such absences. But, if the employer has a collective bargaining agreement or handbook ...
By Paul Burmeister*
The National Labor Relations Board (“NLRB”) has ruled that negotiations between the Hotel Bel-Air and UNITE HERE Local 11 were not at impasse when the employer implemented its last, best final offer, which included severance payments to union employees. Hotel Bel-Air, 358 NLRB 152 (September 27, 2012). The NLRB upheld the ALJ’s order for the employer to bargain with the Union and to rescind all the signed severance agreements containing a waiver of future employment with the Hotel Bel-Air.
The Hotel Bel-Air is a luxury hotel located in Los Angeles. The Hotel ...
By Michael Kun and Aaron Olsen
To the surprise of few, the California Supreme Court has decided to review the Court of Appeal’s decision enforcing a class action waiver in Iskanian v. CLS Transportation Los Angeles, LLC.
We wrote in detail about that decision on this blog earlier this year.
In reaching its conclusion, the Court of Appeals relied on the April 2011 United States Supreme Court’s landmark decision in AT&T Mobility, LLC v. Concepcion. Whether the California Supreme Court will follow Concepcion or attempt to distinguish it is impossible to predict. Unfortunately ...
Jeff Landes, Bill Milani, Susan Gross Sholinsky, Dean Silverberg, Anna Cohen, and Jennifer Goldman have prepared an Act Now Advisory on the amendment to Section 193 of New York’s Labor Law, which is scheduled to take effect on Nov. 6, 2012. The amendment expands the list of employee wage deductions that New York employers may lawfully make, so long as the employee authorizes such deductions.
By: Steven M. Swirsky, Adam C. Abrahms, Donald S. Krueger, and D. Martin Stanberry
In another foray by the National Labor Relations Board (“NLRB” or the “Board”) into new territory affecting non-union workplaces, a divided three-member Board panel found that an employer’s direction that employees not discuss matters under investigation with their co-workers violated Section 8(a)(1) of the National Labor Relations Act (the “Act”) because it “had a reasonable tendency to coerce employees in the exercise of their rights” under the Act. Banner Health ...
By: Bill Milani, Susan Gross Sholinsky, Dean Silverberg, Steve Swirsky, and Jennifer Goldman
EBG has prepared an Act Now Advisory on the NLRB’s recent stance on employment-at-will disclaimers, which are generally incorporated in employee handbooks. Two recent claims filed before the National Labor Relations Board in Arizona alleged that language used in employers handbooks regarding at-will employment (and how that arrangement could not be changed) were overly broad and could therefore chill employees’ rights under the National Labor Relations Act.
Now that the Supreme Court of the United States has upheld essentially all of the provisions of the Obama administration's Affordable Care Act ("ACA"), hospitality employers are faced with looming deadlines to bring their group health plans into compliance with the ACA's numerous new requirements. We have prepared for employers a timeline of the highlights of the upcoming deadlines for compliance with the ACA that apply to non-grandfathered group health plans.
Click here to access a copy of the timeline.
Earlier this year, we were pleased to introduce our free wage-hour app for iPhones and iPads. The app puts federal wage-hour law, as well as that for many states, at users’ fingertips.
We have recently added New Jersey law to the app, as well as updated it to reflect changes in California law following the long awaited Brinker v. Superior Court decision clarifying meal and rest period laws.
The app may be found here: http://itunes.apple.com/app/wage-hour-guide/id500292238?mt=8
By: Kara M. Maciel
In April of 2011, the U.S. Department of Labor (“DOL”) changed its rule defining the general characteristics of tips in an attempt to overrule the U.S. Court of Appeals for the Ninth Circuit’s decision in Cumbie v. Woody Woo, Inc. ruling that the FLSA does not impose any restrictions on the kinds of employees who may participate in a valid tip pool where the employer does not claim the “tip credit.”
DOL’s Recent Position on Tip Pool Participation
The DOL’s amended rule provides that tips are the property of the employees, and may not be used by the employer ...
By: Kara M. Maciel and Jordan Schwartz
A recent allegation of disability discrimination from the parents of a three-year old boy with special needs has resulted in a national fitness club chain revising its policies and procedures and implementing staff training. The alleged discrimination occurred after the child had been playing with toys in the fitness club’s Kids’ Club and had refused to move from his position in front of a slide. Upon learning from his parents that he had autism, a staff member informed them that, had the staff known that he was autistic, they would not have ...
By Michael Kun
On Monday, June 25, 2011, the California Supreme Court issued its long-awaited decision in Coito v. Superior Court, addressing the issue of whether a party in litigation could rely upon the work product doctrine to withhold witness statements obtained by its attorneys or the identities of persons who had given such statements.
In short, while parties in California have long relied upon dicta in the Court of Appeal decision known as Nacht v. Lewis for the proposition that such information is protected from disclosure by the work product doctrine, case-by-case ...
By Matthew Sorensen and Dana Livne
One of the major ways in which American employment law has traditionally differed from its British counterpart has been its entrenched employment “at-will” doctrine. The “at-will” employment doctrine provides employers with the right to terminate their relationships with their employees at any time, with or without notice or cause. UK companies doing business in the US are often relieved to be advised that they become “at-will” employers to their US-based employees. In the US, unless an employer has entered an employment contract ...
The OSHA/Hyatt Hotels saga continued with a recent exchange of letters between OSHA and the hotel chain’s attorney. In April, OSHA issued a “5(a)(1) letter” to the CEO of Hyatt Hotels, indicated that OSHA believed there were ergonomic risks associated with the daily work activities of the company’s housekeeping staff. The letter put the hotel chain “on notice” that while OSHA did not believe that a “recognized hazard” existed at the time of the inspection, such that a General Duty Clause citation should issue, if the same hazard was later ...
Continuing its effort to “outreach” to non-union employees and educate them on their rights under the National Labor Relations Act, the NLRB has launched a new webpage on Concerted Activity. The NLRB’s announcement of its new webpage made clear the page is designed to inform employees of their rights “even if they are not in a union.”
The webpage, in addition to giving basic descriptions of concerted activities, asserts that “The law we enforce gives employees the right to act together to try to improve their pay and working conditions or fix job-related ...
By: Paul Rosenberg
Last week the National Labor Relations Board (“NLRB”) urged the U.S. Court of Appeals for the Sixth Circuit to uphold its controversial Specialty Healthcare decision. The NLRB’s 3-1 split decision in Specialty Healthcare and Rehabilitation Center of Mobile, overturned a 1991 decision and held that an employer that challenges a proposed bargaining unit on the basis that it improperly excludes certain employees is required to prove that the excluded workers share “an overwhelming community of interest” with those in the proposed unit.
The NLRB ...
By Evan Rosen
Hospitality employers continue to get hit with class action lawsuits alleging that they are unlawfully taking the tip credit for their employees. Under federal law, and the law of most states, an employer may pay less than the minimum wage to any employee who regularly and customarily receives tips. The difference between the minimum wage and the hourly wage rate is called the "tip credit."
This compensation system, when administered correctly, has the advantage of saving employers a significant sum of money. But employers must implement ...
ByMichael S. Kun and Aaron F. Olsen
Earlier this week, the California Court of Appeals issued a ruling in Iskanian v. CLS Transportation Los Angeles, LLC that illustrates how the legal landscape in California has shifted in favor of enforcing arbitration agreements with class action waivers. This, of course, is a welcome development for employers with operations in California, which have been besieged by class action lawsuits alleging wage-and-hour violations for the past 10+ years.
In 2006, the plaintiff in Iskanian filed a putative class action complaint against his ...
We are pleased to announce that “Preparing for Non-Compete Litigation,” a guide published by The Practical Law Company and authored by EpsteinBeckerGreen’s Peter A. Steinmeyer and Zachary C. Jackson, is now available in PDF format. The guide is a valuable discussion of the primary considerations for employers seeking to initiate legal action to enforce a non-compete agreement.
By Kara Maciel and Aaron Olsen
After five years of litigation, a Los Angeles Superior Court has denied class certification of a class action against Joe’s Crab Shack Restaurants on claims that its managers were misclassified as exempt and denied meal and rest periods in violation of California law. The court found that the plaintiffs had not established adequacy of class representatives, typicality, commonality or superiority, and emphasized a defendant’s due process right to provide individualized defenses to class members’ claims.
Because the case was handled by our ...
By Forrest Read
In recent years, the Equal Employment Opportunity Commission (EEOC) has taken the aggressive approach of expanding charges it receives from one or a few individuals into larger-scale class actions in federal courts. Last week, in EEOC v. United Road Towing, Inc., the U.S. District Court for the Northern District of Illinois declined to challenge the adequacy of the EEOC’s administrative practices, thus giving ammunition to the EEOC to continue its approach of widening litigation involving alleged discrimination.
In that case, the employer, URT, argued that the ...
By: Kara Maciel
On March 15, 2012, the U.S. Department of Justice (“DOJ”) had temporarily postponed compliance with the 2010 ADA Standards as it relates to providing accessible entries and exits to pools and spas. That day was set to expire later this month, on May 21, 2012, but the DOJ has announced that it will extend that compliance date to January 31, 2013 – a nine month extension from the original compliance date of March 15, 2012.
This extension to January 31, 2013, however, does not change the substance of the DOJ’s requirement that lifts be “fixed.” The DOJ failed to ...
By: Kara M. Maciel and Elizabeth Bradley
The U.S. Court of Appeals for the D.C. Circuit is rapidly becoming the champion of employers in the fight against the National Labor Relations Board’s (the “Board”) attempt to implement radical new rules governing the workplace.
Last month, on April 17, 2012, the D.C. Circuit enjoined the implementation of the Board’s rule requiring that employers post a notice informing employees of their right to join or form a union. Yesterday, the D.C. Circuit struck another blow to the Board by holding that its proposed union election rules ...
By Kara Maciel and Casey Cosentino
The restaurant and hospitality industries are no strangers to the tidal wave of wage and hour class action lawsuits. Restaurants and hotel operators located in states with employee-friendly laws like Massachusetts, New York, and California, are particularly vulnerable. This vulnerability was recently confirmed on April 30, 2012, when Texas Roadhouse, Inc. agreed to pay $5 million to settle a putative class action suit filed by wait staff employees from nine restaurants in Massachusetts.
In Crenshaw, et. al, v. Texas Roadhouse, Inc. (No ...
By Jeffrey M. Landes, Susan Gross Sholinsky, and Jennifer A. Goldman, with Teiko Shigezumi
On April 25, 2012, the U.S. Equal Employment Opportunity Commission ("EEOC") issued an enforcement guidance document titled "Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et. seq." (the "Guidance"), with respect to employers' use of arrest and conviction information in connection with employment decisions.
Disparate Treatment v. Disparate Impact
Although ...
By Eric J. Conn and Casey M. Cosentino
In what has been good news for hospitality employers, the past month has been a rough stretch for OSHA in terms of Injury and Illness Recordkeeping enforcement. As we reported last month on the OSHA Law Update Blog, in March, the Seventh Circuit beat back OSHA’s attempt to expand the meaning of “work related” for purposes of determining whether an injury or illnesses is recordable. Then last month, the District of Columbia Circuit further and dramatically limited OSHA’s authority to cite Recordkeeping violations, by insisting that the ...
By Eric J. Conn and Casey M. Cosentino
For years, OSHA’s Hazard Communication Standard (“HazCom”) has been the standard most frequently cited against hotel and other hospitality employers.
In FY 2011 37 hotel companies were cited for violations of the HazCom Standard, including, primarily, alleged failures to:
(1) maintain a written Hazard Communication Program;
(2) ensure each container of hazardous chemicals (such as cleaning agents) is labeled, tagged, or marked;
(3) maintain a complete set of Material Safety Data Sheets (“MSDS’s”) for each hazardous ...
By: Kara M. Maciel and Matthew Sorensen
Social media has become an increasingly important tool for businesses to market their products and services. As the use of social media in business continues to grow, companies will face new challenges with respect to the protection of their confidential information and business goodwill, as several recent federal district court decisions demonstrate.
Christou v. Beatport, LLC (D. Colo. 2012), Ardis Health, LLC v. Nankivell (S.D. N.Y. 2011), and PhoneDog v. Kravitz (N.D. Cal. 2011) each involved former employees who took the login ...
By: Jay P. Krupin and Dana Livne
Historically, the United States has continuously attracted international commerce and investment. In recent years, in spite of a challenging economic situation, international hospitality groups continue to seek opportunities in the US for financial growth, promotion, and strategic reasons. When they do so, they must comply with unfamiliar and complex labor and employment laws which are constantly changing. In the US especially, the increasingly litigious environment can affect every step of the enterprise – right from the start ...
by Amy J. Traub, Anna A. Cohen, and Jennifer A. Goldman
Effective April 3, 2012, the Equal Employment Opportunity Commission ("EEOC") extended its existing recordkeeping requirements under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act to employers covered by Title II of the Genetic Information Nondiscrimination Act of 2008 ("GINA"). The burden on employers to comply with the recordkeeping requirements under GINA will likely be minimal, as employers should already have recordkeeping policies in effect for personnel and other employment ...
Wage garnishment can pose a number of potential problems for hospitality businesses. This is particularly true where the employee whose pay is subject to garnishment receives tips.
Garnishment is a legal procedure in which an employee’s earnings must be withheld by an employer for the payment of a debt under a court order. When faced with a garnishment order involving a tipped employee, the employer must determine whether all or part of the employee’s tips must be included in the amounts withheld under the garnishment order. This question turns on ...
Remember that all new H-1B petitions must be filed on March 30, 2012, to ensure that they are counted toward the 2013 H-1B cap.
The annual H-1B season has arrived! The federal government is authorized by statute to approve only 65,000 new H-1B visas each fiscal year, plus an additional 20,000 H-1B visas set aside for applicants who have master's degrees from accredited American universities. The federal government's fiscal year begins on October 1, but the governing regulations permit employers to apply for new H-1B non-immigrant visas up to six months in advance. Hence, the filing ...
By: Kara M. Maciel
Today, March 15, marks the effective date of the 2010 ADA Standards for hotels, restaurants, retailers, spas, golf clubs and other places of public accomodation. As we have written about previously, there are several new requirements and obligations that the hospitality industry must implement in order to ensure their properties are compliant with the new regulations. Below are five steps every hospitality owner and operator should consider to avoid costly fines and lawsuits:
1. Implement new reservation policies for blocking off rooms and ensuring ...
By: Mark M. Trapp
In these challenging economic times, many private clubs are finding it increasingly difficult to attract new members, or to retain existing members. Over the last few years many clubs have lost members, and many more are facing substantial drops in revenues due to a decline in money spent by members on activities such as golfing or dining out. Many golf, country and social clubs are finding it difficult to sustain their amenities and level of service.
Because the economic situation is decreasing the potential membership pool, many clubs are offering incentives to ...
By: Casey Cosentino
A hotel management company was recently hit with a putative class action in federal court for allegedly failing to compensate hotel employees overtime pay at one and one-half times their regular rate of pay for all hours worked over 40 hours in a workweek. As the chief engineer, the lead plaintiff was classified as an executive employee and, thus, was exempt from overtime requirements under the Fair Labor Standards Act (“FLSA”). The lead plaintiff asserts, however, that he was misclassified under the Executive exemption because he “regularly and ...
Arbitration agreements can be an effective way for employers in the hospitality industry to streamline and isolate an employee’s potential claims on an individual basis and protect themselves from a proliferation of lawsuits with many plaintiffs or claimants. But the National Labor Relations Board’s (“Board”) January 6, 2012 decision in D.R. Horton, Inc. and Michael Cuda, notably finalized by two Board Members on departing Member Craig Becker’s final day, has caused significant confusion as to how employers can enforce such arbitration ...
By: Ana S. Salper
No governmental body has been more active in addressing social media’s impact on the workplace than the National Labor Relations Board (“Board”). For both unionized and non-unionized employers, the Board has been aggressively scrutinizing the contours of employer discipline of employees for their activities on social media sites, and has regulated and constricted the scope and breadth of employer social media policies. Following his first report in August 2011, National Labor Relations Board Acting General Counsel Lafe Solomon has now released a ...
By: Evan Rosen
As Hospitalty Labor and Employment Law Blog readers are aware, on August 30, 2011, the National Labor Relations Board (the “Board”) issued a rule requiring employers to post notices informing employees of their right to join or form a union. We blogged about the impact of the notice and its requirements on hospitality employers here. The rule was originally supposed to go into effect in November, but was subsequently pushed back to January 31, 2012 as a result of mounting criticism against the rule. Indeed, several lawsuits have been filed by business ...
By: Kara M. Maciel
As hoteliers and hospitality employers know, the upcoming March 15, 2012 deadline for the 2010 ADA Standards will have significant impact on hotel operations. Some of the regulations involve new features that previously had not been regulated by the ADA, including swimming pools, spas, exercise facilities, golf and sauna and steam rooms. All newly constructed recreational facilities built after March 15, 2012 must comply with the new standards; whereas, existing facilities must meet the new standards as soon as readily achievable. For hoteliers, some of ...
by: Matthew Sorensen
1. Deadline For Compliance With New ADA Accessibility Rules Approaching:
On March 15, 2012, hospitality establishments will be required to be in compliance with the standards for accessibility set by the Department of Justice’s final regulations under Title III of the ADA (2010 ADA Standards). The regulations made significant changes to the requirements for accessible facilities, and will require additional training of staff on updated policies and procedures in response to inquiries from guests with disabilities. Among the most significant ...
By: Jordan Schwartz
The holiday season is often the busiest time of the year for hospitality employers. At the same time, employees may appreciate the opportunity to earn more during these busy months. Consequently, there may be occasions when an employer places an employee in a dual capacity role. For example, from November through January, a hotel may permit (or require) a housekeeping attendant to also function as a front desk reservation assistant. While assigning (or permitting) an employee to work at another post with a different rate of pay is generally permissible ...
By: Evan Rosen
Yesterday, the National Labor Relations Board (the “Board”) voted, 2-1, to approve its Resolution to drastically amend the rules governing union elections. While the Board’s stated reason for the amendment is to reduce unnecessary litigation, it is apparent that this purpose is a sham, and that the real reason is to make it significantly easier for unions to organize employees, especially those in the highly targeted hospitality industry.
The Board did not vote on the entire proposal detailed in their June 22, 2011Notice of Proposed Rulemaking, but rather ...
By: Forrest Read
The new Americans with Disabilities Act (“ADA”) standards (the “2010 Standards”), set to take effect on March 15, 2012, create new compliance obligations and contain technical specifications impacting what have become fixtures in most hotel lobbies or common areas: automatic teller machines (“ATMs”). As is customary when new standards are set to take effect and become enforceable, hotels with existing ATMs want to know whether and how their ATMs will be impacted by the 2010 Standards and whether they will be afforded any safe harbor protections for ...
OSHA’s recent string of hotel inspections in response to formal safety and health complaints filed by UNITE-HERE and others on behalf of hotel housekeepers is under serious scrutiny from the House of Representatives Subcommittee that oversees OSHA’s operations. OSHA leadership is defending its decision to inspect hotels, and is signaling that OSHA will not shy away from inspecting employers in the midst of organizing campaigns and/or contentious bargaining over labor agreements.
Over the last year, OSHA received a number of formal, written ...
By Casey M. Cosentino and Eric J. Conn
There is an on-going trend by the U.S. Department of Labor (“DOL”) to leverage popular technology to increase public and consumer awareness of the laws and regulations it enforces. Indeed, the DOL is continually exploring creative ways to share information with the public using the fastest and most-wide reaching means available. Through technology, the DOL is intentionally providing employees and consumers with enforcement data about companies, particularly hotels and restaurants, so that they can make informed employment and ...
By: Ana S. Salper
With the recent surge in class action wage and hour lawsuits, hospitality employers have developed a heightened sensitivity to tip pooling arrangements, distributions of service charges to employees, and application of the “tip credit.” A case before the U.S. Supreme Court this month, Applebee’s International Inc. v. Gerald A. Fast et al., is likely to add further fuel to the fiery “tip credit” world, as the high court will have to decide whether tipped employees should be paid minimum wage for nontipped tasks employees perform.
Under the Fair Labor ...
By Casey M. Cosentino and Eric J. Conn
OSHA recently renewed a Local Emphasis Enforcement Program (“LEP”) that targets hotel operators in OSHA’s Region 2, which includes New York, New Jersey, Puerto Rico, and the Virgin Islands. The directive outlining OSHA’s Hotel LEP is available on OSHA’s website.
The Hotel LEP was launched in October 2010, and during the first year of the initiative, OSHA limited enforcement inspections to hotels in the Virgin Islands. According to an OSHA Region 2 official, the agency started in the Virgin Islands because of a high number of ...
By: Kara M. Maciel
On August 25, 2011, the National Labor Relations Board (“NLRB”) adopted a final rule to require all employers to post a notice of employee rights under the National Labor Relations Act (“NLRA”). The required posting provides information to employees about the right to organize a union, bargain collectively, and engage in protected concerted activity – as well as the right to refrain from such activity. Significantly, this posting requirement is required for all hospitality employers – large and small -- regardless of whether your operations are ...
By: Kara M. Maciel and Mark M. Trapp
On August 23, 2011 the Washington D.C. area experienced a 5.9 magnitude earthquake. A week later, a “labor law earthquake” of far greater magnitude had its epicenter in a federal agency in D.C. In the coming weeks and months, its aftershocks will be felt by unprepared employers, particularly those operating hotels, restaurants, spas and clubs in the hospitality industry.
In an opinion that America’s largest private sector labor union called a“monumental victor[y] … for unions,” the National Labor Relations Board ...
Many of our hospitality clients are revisiting immigration requirements to see if there are any advantages that they have overlooked. One overlooked advantage is the USCIS’s E-Verify system. Employers know that the IRCA requires them to satisfy the Form I-9 requirements. Many have found this difficult to implement and have been the targets of worksite enforcement operations by U.S. Immigration and Customs Enforcement (“ICE”) that are costly to defend and often result in significant fines. Traditionally, many hospitality employers have looked at ...
By: Kara M. Maciel
The Department of Labor’s Wage and Hour Division in Norfolk, Virginia has announced that it will be stepping up its compliance audits and enforcement efforts against area hotels. In the past few years, the DOL stated it found violations at about 60% of local hotels. According to the DOL, the agency recently made spot checks at 10 area hotels since April. This is just one part of the agency’s nationwide enforcement program and its “Plan/Prevent/Protect” initiative against the hospitality industry. Common violations assessed by the DOL include:
· ...
By Jay P. Krupin, Kara M. Maciel, and Eric J. Conn
As we reported in our blog post in November of 2010, hotel housekeepers across the nation launched a concerted program of filing complaints with the Occupational Safety and Health Administration (OSHA) alleging a range of ergonomic and chemical exposure injuries sustained on the job. Government regulators and legislators are now taking action in response to these complaints. We have attached a series of articles discussing the nature of the complaints and the government’s response to them.
By: Michael Kun
Employers who do business in California are already well aware of the wage-hour class actions that have besieged employers in virtually every industry. Class claims for misclassification of employees as exempt employees or independent contractors first began to be filed more than a decade ago, and continue to be filed on a daily basis. Claims for alleged work off-the-clock and missed meal and rest periods by non-exempt employees generally began later, but continue to be filed at an alarming rate.
Now we can add to those cases a new wave of California class actions ...
On January 14, 2011, EpsteinBeckerGreen helped one of its restaurant clients, the Brasserie Ruhlmann, obtain summary judgment “in its entirety” in a lawsuit brought by former waiters, bussers, and runners (“Plaintiffs”). Similar to many such wage and hour cases currently being litigated in the hospitality industry, Plaintiffs sought to invalidate the restaurant’s tip pool with assertions that captains and the banquet coordinator performed managerial functions and, thus, were not “tip eligible.” If Plaintiffs had succeeded, they would have also ...
By: Kara M. Maciel and Evan Rosen
In recent weeks the Obama Administration’s National Labor Relations Board (the “Board”) has been very active in soliciting public comments and amicus briefs on a wide range of decisions and proposed regulations that could drastically change the labor relations landscape. One of these topics are the rules surrounding the scope of union solicitation on a non-unionized employer’s private property.
We have received many inquiries from our clients about the Board's review of whether to change the solicitation rules. In light of the ...
In a recent article “Food Safety and Whistleblowing – New Federal Law May Deliver a Full Basket of Claims,” EBG partners Allen Roberts and John Houston Pope discuss the FDA Food Safety Modernization Act (“FSMA”), which was signed into law on January 4, 2011.
This new federal law could have a significant impact on restaurateurs, clubs, and other hospitality employers who manufacture, distribute, transport, receive, hold or import food. FSMA opens wide a new door to whistleblower activity and protection, necessitating employer attention to related compliance ...
By: Kara M. Maciel
The United States District Court for the Northern District of California has denied certification of a class action against Joe's Crab Shack restaurants on claims that employees worked off-the-clock, were denied meal and rest breaks, and were required to purchase t-shirts to wear at work. Because the case was handled by our EpsteinBeckerGreen colleagues Michael Kun and Aaron Olsen, we do not believe it is appropriate to comment on the decision or its implications. If you would like to read the decision, a copy may be found here.
By: Michael Casey, Peter Panken, and Steven Swirsky
The new Obama National Labor Relations Board (“NLRB” or the “Board”) has signaled that it will likely be granting union organizers the right to enter employers’ premises to conduct union organizing activity. This would reverse a trend in the last few years of preserving an employer's property rights, and of confining union organizers to areas outside of an employer's private premises, including those areas open to the public, in hotels, restaurants, clubs and other hospitality venues where non-employees ...
by Michael Kun and Doug Weiner
It is no secret that employers have been beseiged by wage-hour litigation, including wage-hour class actions and collective actions. These lawsuits have hit the hospitality industry as hard as any other industry, perhaps harder.
It is also no secret that the persons who benefit most from these actions are often plaintiffs' counsel, who frequently receive one-third or more of any recovery.
Now, as a result of an unprecedented new program initiated by the the Department of Labor's Wage and Hour Division ("WHD"), the WHD will be practically delivering ...
Please join me, Jay P. Krupin, Michael S. Kun and other attorneys from our firm, Epstein Becker Green, as we present a full-day program covering labor and employment law topics that have increasingly impacted hospitality employers over the past two years. In addition, we will offer an outlook of what we should expect in the coming two years.
Our keynote speaker is Darrel Thompson, Senior Advisor to Senate Majority Harry Reid, who will offer comments concerning the agenda of the 112th Congress. We are particularly pleased that Norah O'Donnell, MSNBC Chief Washington Correspondent, is ...
Missouri Man Convicted in Scheme to Place Undocumented Workers in Hotels
On October 28, 2010, a Missouri man was convicted by the U.S. District Court in Missouri for his role in a racketeering scheme that involved placing undocumented workers at hotels in 14 states, including several hotels in the Kansas City, Missouri, area. United States v. Dougherty, No. 4:09-CR-00143 (W.D. Mo. Oct. 10, 2010). Beth Phillips, the U.S. Attorney for the Western District of Missouri, indicated that “Mr. Kristin Dougherty was found guilty of racketeering, participating ...
By Jay P. Krupin and Kara M. Maciel
Last week, on November 9, 2010, housekeepers employed by Hyatt Hotels filed complaints with OSHA alleging injuries sustained on the job. The complaints were filed in eight cities across the country, including Chicago, Los Angeles, San Francisco, Long Beach, San Antonio, Honolulu and Indianapolis. Similar OSHA actions may occur in Boston, NYC, DC, Atlanta, Las Vegas, Miami, and Orlando with higher concentrations of hotel properties. This is the first time that employees of a single private employer have filed multi-city OSHA complaints, and ...
By: Jay P. Krupin and Kara M. Maciel
Last week, on November 9, 2010, housekeepers employed by Hyatt Hotels filed complaints with OSHA alleging injuries sustained on the job. The complaints were filed in eight cities across the country, including Chicago, Los Angeles, San Francisco, Long Beach, San Antonio, Honolulu and Indianapolis. Similar OSHA actions may occur in Boston, NYC, DC, Atlanta, Las Vegas, Miami, and Orlando with higher concentrations of hotel properties. This is the first time that employees of a single private employer have filed multi-city OSHA complaints, and it ...
On November 2, 2010, the Government Accountability Office (GAO) released a Report on the H-2B nonimmigrant program (Report). This Report examines fraud and abuse by examining 10 criminal prosecutions of recruiters and employers participating in the H-2B program. This program allows employers in the hospitality and other industries with a onetime occurrence, peak load, seasonal or intermittent employment needs to supplement their domestic workforce with foreign workers whenever U.S. workers cannot be located for the positions.
The Report found ...
By: Amy J. Traub
The New York State Department of Labor recently issued a proposed rule which would combine the current wage orders for the restaurant and hotel industries to form a single Minimum Wage Order for the Hospitality Industry. If adopted, the Wage Order would affect requirements related to the minimum wage, tip credits and pooling, customer service charges, allowances, overtime calculations, and other common issues within the restaurant and hotel industries. Additionally, the Wage Order would provide helpful guidance for traditionally ambiguous wage issues such as ...
U.S. Department of Labor Issues Proposed Rule on H-2B Wage Rates
On October 4, 2010, the Employment and Training Administration, U.S. Department of
Labor (“DOL”), issued a proposed rule that would require employers to pay H-2B and
American workers recruited in connection with an H-2B job application a “wage that meets
or exceeds the highest of: the prevailing wage, the federal minimum wage, the state minimum
wage or the local minimum wage.” The proposed rule was published on October 5, 2010, in
the Federal Register. Interested parties have 30 days to ...
EBG is holding its annual NY briefing for clients and friends on Oct. 28. This full-day program will feature a special, two-hour workshop just for employers in the hospitality and retail industries, updating the many recent and significant labor and employment law developments affecting the industry. We will provide real-world guidance on how to manage the risks your company faces from increasingly aggressive plaintiffs' lawyers and government investigators who have openly and unabashedly targeted the industry.
Topics on the workshop agenda include:
- Wage and hour class ...
Employers with operations in California continue to await a ruling from the California Supreme Court on the question of whether employers must "ensure" that meal and rest breaks are taken, or merely make them "available."
The issue has long been before the Court in the similarly-named Brinker and Brinkley cases, and will turn largely on a single question: what does the word "provide" mean.
This, of course, is much more than a minor semantic issue. The ultimate decision about what "provide" means will have a dramatic impact upon the wave of wage-hour class actions that have plagued ...
By Michael Kun
The California Supreme Court has announced what can only be considered a major victory for hospitality employers in California.
California Labor Code section 351 probibits employers from taking any tip that customers may leave for employees. Many hospitality employers have long used tip-sharing policies, whereby tips left by customers are divided among those involved in service. In recent years, those tip-pooling practices have been challenged under section 351 as part of the wave of wage-hour class actions brought against California hospitality employers.
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