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Posts from August 2012.

Have you ever seen the iconic advertisements on the side of the Hotel Figueroa in Los Angeles?  I bet you have - if not on a commute opportunity through the metropolis, then in a movie.  Or, perhaps your business is similar to the Pier House 60, Clearwater Beach Marina Hotel where a condition of approval required compliance with both the public art requirements for the development and the local sign code. If you are interested in how to avoid an eight-armed strangle on your business’ commercial speech, read on for the latest on the enforceability of local sign regulations.

Some employers don’t take the Form I-9 seriously, but they should.  The government has significantly increased its audits of all kinds of employers – not just the bad guys - and are assessing hefty fines for mere technical violations.  This is particularly true in the hospitality industry, which can be a target for audits and which, because of employee turnover, has seen disproportionately high fines.

Every employer knows that the government’s one-page form, the “Form I-9, Employment Eligibility Verification,” must be completed for every new employee.  And most make sure that they get theirs completed in a timely manner.  But failure to be vigilant regarding the timelines or whether the forms are completed fully or correctly can cost even the best employer thousands of dollars in fines.

Most employers consider themselves good guys.  They don’t purposely seek out or hire employees who are not authorized to be employed in the U.S.  But those employers are mistaken if they think that Immigration and Customs Enforcement (ICE), the enforcement arm of the Department of Homeland Security, only audits unscrupulous employers.  ICE does focus on certain industries in which there is a history of unauthorized employment, but the reality is that ICE has become very good at conducting audits, and has a team of forensic auditors on staff that it wants to keep busy.  ICE does that by initiating seemingly random individual audits or nationwide actions in which up to 1,000 audits are served in a single day, providing as little as three days’ notice before documents have to be surrendered.  The writing is on the wall – employers should plan for and expect a government audit of its Form I-9 documentation.

Nancy Cooper, current chair of the firm's Labor and Employment Group, discusses the importance of documentation when managing employees.

Managing a business is hard.  Managing a hospitality business is even harder.  You try to have your employees understand that top notch customer service is the be all and end all of your business.  They are your reputation.  They are your “face.”  But, there is always that one employee…

Reality shows that use mystery diners or guests to demonstrate how the bad employee can drag down the entire business may be entertaining for the public, but are nightmares for hospitality managers.  It is easy to do the immediate firing when the mystery diners have the bad behavior on film, but that rarely happens in the real world.  So, how do you manage the employee who is causing you endless headaches?  Set expectations, respond consistently and document your efforts to change the bad behavior.

The United Kingdom's Office of Fair Trading (OFT) issued a Statement of Objections this Tuesday alleging that industry giants B.V., Expedia, Inc. and InterContinental Hotels Group violated the UK’s Competition Act of 1998. The Statement of Objections will not be made public, but from OFT’s comments, it’s rate parity and best rate guarantees that are causing the trouble.

Requiring on-line travel agents (OTAs) to honor a hotel supplier’s best rate guarantee (at retail) and requiring hoteliers to provide inventory to distributors at the same price across all distribution channels are as close to universal practice in this industry as I have seen. And now, OFT appears to consider them by a less salubrious name: price-fixing.   However, the Statement of Objections is not “the final word." It is a sort of pre-trial opinion in which OFT provides official notice of a “proposed infringement [of the Competition Act 1998] decision” and the parties to the dispute may make written and oral arguments to be considered before final decision is rendered. 

OFT’s statement was issued at the end of an investigation begun in 2010 after a complaint was made by Skoosh, a small British OTA. Skoosh contacted OFT after Skoosh’s own hotel suppliers demanded that Skoosh raise its retail rates to a certain figure (among other allegations). The hoteliers, of course, were apparently acting to meet pressure applied by Booking and Expedia not to violate what was almost certainly a contractually required rate parity obligation of some sort. In effect, Skoosh raised concerns with OFT that rate parity and best rate guarantees operate together to artificially fix prices in the marketplace and therefore act as a barrier to competition, particularly for new or smaller players, like Skoosh, who might be willing to undersell the larger OTAs to grow its business.

If OFT formally issues a finding of an infringement, despite its jurisdiction being limited to the UK, the finding will cause--at a minimum--a shift in the way a significant majority of the hospitality industry conducts its distribution business, as well as the amount of competition in the marketplace. The Internet, after all, is international. So please stay tuned!

Back in February, we gave you the heads up that Oregon was in the process of adopting the 2009 FDA Food Code. Bar and food cart owners, restaurateurs, and folks employed in the food industry were urged to prepare for new changes in labeling laws and implement best practices to protect themselves from liability once the new rules were announced.

We’d hoped to update you on the Code on July 1, 2012 when the new rules were to go into effect.  The only problem? A bitter public debate around another rule — the proposed “no-bare-hands rule” – brought implementation to a screeching halt. The “no bare-hands” rule forbade food handlers from contacting “exposed, ready-to-eat food” with their bare hands; “suitable” utensils, such as spatulas, tongs and single-use gloves had to be used instead. In addition to the environmental, financial, and efficiency issues raised in opposition to the rule, restaurateurs voiced concerns as to whether the rule would actually increase food safety.

The power of public opinion won out. Nearly two weeks after the July 1 deadline had passed, Oregon's Public Health Division Foodborne Illness Prevention Program announced that “At this time, the ‘No Bare Hand Contact’ section of new food safety rules will not be adopted” and that adoption of the Food Code would be moved to September 4, 2012. The Public Health Division also explained that in the wake of the contentious debate, they would convene workgroups in the next few months to “allow restaurateurs, chefs, government inspectors and interested consumers . . . to have a hand in future food safety decisions.”

Until the final rules come out in September, check out the Fact Sheets provided by Oregon Public Health to see what other changes may affect your business and check back here to see what new legal issues you may face come September 4.

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Greg Duff
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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