Duff on Hospitality Law

For businesses that use social media to vet job applicants or to monitor employees, change is afoot. On Tuesday, May 21, Governor Inslee signed into law a bill that makes it illegal for any employer in Washington State to require an employee or applicant to provide access to his or her social media account. This law covers any employer with one or more employees, and it goes into effect July 28, 2013. Here’s the scoop:

The law prohibits employers from requesting, requiring, or coercing a current employee or job applicant into doing any of the following:

• • Giving the employer the login information to a private social media account
  • “Friending” a manager or other third person so the employer can view the individual’s account
  • Requiring that the employee change his or her privacy settings to make the account publicly available
  • Logging into the account in the employer’s presence so as to enable the employer to view the content

The law also expressly prohibits employers from taking any “adverse action” against an employee for refusing to engage in any of these prohibited acts. This means firing, refusing to hire, or disciplining the employee or applicant, or threatening to do so.

There is a narrow exception to the law for when access to an account is necessary for the company to make a factual determination during a workplace investigation. This applies only if the employer has information that leads it to believe (1) that some content on the employee’s account might violate the law, regulatory requirements, or prohibitions against employee misconduct, or (2) that the employee has disclosed the employer’s confidential information on the account. Even under these circumstances, however, the employer still may only ask to view the account – it may not request the employee’s password.

This law does not apply to a work-focused technology platform primarily intended to facilitate communications and collaboration among employees, such as an in-house intranet or social network. It also does not prevent the employer from requesting login information for an account, service, or device the employer provides or pays for or that is only provided by virtue of the employment relationship. The law also will not apply if the employer unintentionally learns an employee’s login information, such as through a company mobile device or program monitoring the employer’s network, so long as the employer does not use the login information to access the employee’s social networking account.

Violations of this law can have serious ramifications.  Employees may bring a civil action against employers who violate the law and, if they win, will be entitled to a $500 statutory penalty, any actual damages suffered, and – importantly – reasonable attorney’s fees and costs. An employer who is sued for a violation but prevails will only be able to recover attorney's fees if it can prove the action was frivolous.

Eleven states have now enacted laws of this nature, and similar legislation is being considered in over thirty more. If you have any questions about this development or how this law impacts your business, please don’t hesitate to contact Diana Shukis or Greg Duff.

Don Scaramastra has provided an update for our readers on the status of the class-action involving online distributors and certain hotel operators with regards to antitrust laws related to online distribution. Catch up on the original post here and continue reading for an update on this topic. – Greg 

On May 1, 2013, plaintiffs filed a consolidated amended complaint in the OTC/Hotel Booking Antitrust Litigation. The amended complaint formally consolidates the many different complaints that were consolidated before the federal district court in Dallas last December.

But the amended complaint does more; it names a number of additional defendants. Most are hotel companies: Wyndham Hotel Group, Carlson Hotel Group, Best Western, Choice Hotels, and Hyatt Hotels. But one notable new defendant, EyeforTravel, Ltd., is not. EyeforTravel describes itself as a global media company specializing in business intelligence for the travel and tourism industry. This post will focus on the allegations against EyeforTravel because they highlight issues and dangers different from those I covered in my last post regarding this case.

According to the amended complaint, EyeforTravel annually sponsored industry conferences that “became a forum where [unlawful] agreements were confirmed” and discussed. The amended complaint refers to brochures and announcements regarding these conferences, which indicate that topics discussed included “revenue management and price,” “rate parity,” “strategies for restriction of free pricing,” “how large travel suppliers are dealing with pricing pressures attributed to third party distributors,” “why rate parity is necessary,” “best practices for managing revenue in a down market and avoid rate erosion,” and the “dangers of chasing demand by lowering your prices.”

Those of you following the challenge to the Department of Labor (“DOL”) tip pooling regulations interpreting the Fair Labor Standards Act (“FLSA”) may recall the events below. You may also want to view our past updates and insights on the tip pooling topic in the following articles: DOL Restrictions, Tip Pooling Remains a Hot Topic, Tip Pooling - Update, Tip Pooling in Oregon and Washington.

• • In 2010, in a case called Cumbie v. Woody Woo 596 F.3d 577 (9^th Cir. 2010), the Ninth Circuit (with jurisdiction over Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington) ruled that the FLSA did not prohibit employer-mandated tip-pooling arrangements if the employer did not take a tip credit. This meant it was lawful for employers in the Ninth Circuit to require that their tipped employees share tips with non-tipped employees (bussers, dishwashers and cooks, for example), just so long as all employees got paid minimum wage and the restaurant did not take a tip credit. (Seven states – Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington – do not allow a tip credit.)
  • The DOL then issued regulations in April 2011 addressing ownership of employee tips, in conflict with the ruling of Cumbie v. Woody Woo. The regulations created legal uncertainty for any employers who were engaging in mandatory tip-pooling with back-of-the-house employees.
  • In February 2012, the DOL issued a field assistance bulletin to its staff, declaring ”the employer is prohibited from using an employee’s tips, whether or not it has taken a tip credit …” and the DOL would “enforce nationwide the 2011 final rule explaining that a tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit[.]” The field assistance made clear on no uncertain terms that that the DOL considered it a violation of the FLSA for an employer to institute a tip pool that required sharing tips with back-of-the-house employees, even if the employer did not take a tip credit.
  • In July 2012, restaurant industry associations and others filed a lawsuit in Oregon federal court, contending that the DOL regulations unlawfully prohibit back-of-the-house kitchen workers from sharing in tips left by customers when the employer does not take a tip credit against minimum wage. See Oregon Restaurant and Lodging Association v. Solis et al., Case No. 3:12-cv-01261 (D. Or.).

We all know the importance of appearance and design in the hospitality industry. We also know the importance and priority of saving money. Garvey Schubert Barer's client, V*Starr Interiors, founded and led by another inspirational client Venus Williams, was kind enough to put together a guest blog post on staying in budget through re-purposing. V*Starr Interiors' experience ranges throughout the US, and the team’s portfolio includes hospitality, educational facilities, public/amenity spaces, clubhouses and fitness centers. Their hospitality portfolio includes a full renovation of the presidential suites, executive suites, and club lounge at Intercontinental Hotel- Downtown Miami, Florida. Today’s post is from V*Starr Project Designer, Ariana Ranieri. We look forward to several more design-oriented posts from V*Starr in the months ahead. – Greg

B u d g e t  |  WAYS TO STAY IN BUDGET THROUGH RE-PURPOSING THE STAGNANT ELEMENTS Working within a budget is something that ultimately controls a project. However, approaching the design in a more resourceful manner can enable the dollar to go further. When deciding which elements to maintain or re-purpose, think about the space from multiple perspectives. Here are some important aspects to consider:

1)  Versatility | Look at the atmosphere and determine which style are you aiming to achieve. If you want to move from a traditional setting to a contemporary setting, assess your current surroundings and see what you can salvage. Can the room’s trim work be painted or re-finished? Then look at the furniture in the room. When it comes to furnishings be sure to carefully examine each piece. You may find a style that is classic throughout time and could possibly be re-upholstered or re-finished. You may also find furniture with a neutral shade that will marry into any color palette. For example: An old sofa with great form will look much livelier once it is paired up with new pillows. Save money by taking note of the current paint color as some neutral shades can be spruced up with the addition of an accent wall.

2)  Condition | How is the condition of the current components in the room? Think about legs, arms, finish, and filling. Also, how long has the piece been in the space and does it stand the test of time? How durable is the piece within a short period of time? If there is a component that seems to be problematic you’ll want to make sure that any reworking will not compromise the item. Let’s say you have a historic Dining Buffet with a great body but worn legs. Changing out the legs and hardware may give it a fresher look at half the cost of a new Dining Buffet. Lastly, inspect the existing plumbing fixtures and appliances and determine if there’s another fixture that could be more cost effective.

Just when it seems that businesses spend more time ensuring employment law compliance than they do on actual business, the Department of Labor (DOL) has announced they intend to increase the frequency of their FMLA audits while also increasing the number of site visits during these audits. What, you may ask, is a FMLA audit and why should I care?

For employers who qualify for the Family Medical Leave Act (“FMLA”) (over 50 employees within a 75 mile radius) the required paperwork is an administrative process and the tracking is done by the Human Resources Department. It is a formality that also provides certain job protections, but it really isn’t that big a deal once the processes are in place. Right? The short answer is, no. The FMLA is form driven and form dependant – but it takes more than the forms to make sure you are complying with the law. Audits of an employer’s FMLA practices are not something new – at least in theory. The DOL has always had the right to conduct audits, but it is not a right often exercised. It has not been unusual to see the EEOC investigating employee claims under the FMLA, but rarely has the DOL investigated. That is about to change.

DOL Branch Chief for FMLA, Diane Dawson, recently announced that the DOL’s national office has instructed the regional offices to identify occasions when an audit would include an on-site visit. These visits could be announced or unannounced. The investigations may be triggered by an employee complaint they were not given all their rights under the FMLA, that they were about to lose their job (or had recently lost their job) due to exercising their rights under the FMLA, or because DOL is seeing a pattern of FMLA issues within the target company. Violating the FMLA can be costly. The employee can sue you and the government can fine you. The DOL is opting to increase the on-site investigations because the actual visit can reduce the time an audit may take. The investigators have ready access to the records, policies and files. More importantly, they have ready access to the employees for a face-to-face discussion while reviewing the forms.

So, what can an employer do to prepare? First and foremost, an employer should be proactive and review their current processes and forms. The DOL forms were updated recently and all employers should be using the updated forms. The current poster should also be placed in the appropriate locations. It is important to note that the poster must be able to be seen by both employees and applicants.

One of the most important things to do is to review (or develop) your FMLA policy. The DOL will start with a review of the policy (and the forms) to ensure the March 2013 regulations are incorporated. So, make sure your policy is up to date. At a minimum, the policy must incorporate issues such as the leave year calculation (calendar, rolling backward, rolling forward), eligibility requirements for leave, the reasons for leave, your call-in procedures, substitution of paid leave, the employee’s obligations in the FMLA process, medical certification process, explanation of intermittent leave and that the employee is responsible for telling you when an absence is covered under approved intermittent leave, benefit rights under leave, fitness for duty requirements and any outside work during FMLA prohibitions.