It’s estimated that room poaching results in upwards of $1.3 billion in lost revenue for hotels and lost funds for consumers every year. As hotels and consumers look for a way to fight against these losses, trademark infringement may be emerging as the most effective tool.
Room poaching occurs when companies position themselves as an event’s housing bureau in order to entice attendees to unwittingly book rooms outside of the official room block. Fake or out-of-block reservations can result in lost reservation fees for hotels, surprise charges and inconvenient and expensive last minute re-booking at alternative hotels for consumers. Further, trademark infringement can erode brand equity and good will between partnering hotels and groups.
Miriam Korngold is a guest author and a tax attorney at GSB. She can be reached at firstname.lastname@example.org or at 206.816.1308.
Oregon’s legislature has broadened Oregon’s tax on short-term room rentals (also called the transient lodging tax). The new law, Enrolled House Bill (EHB) 4120, expands the scope of persons who must collect and remit the tax and file returns.
Background and Prior Law
EHB 4120 comes after a 2013 change in the law meant to treat third-party intermediaries on par with traditional hotels and motels. Apparently, the legislature now believes the earlier change did not go far enough—so in comes the amendment.
The old law and new law both require intermediaries to collect the tax along with short-term rental providers. But the old law defined intermediaries somewhat narrowly as those who simply facilitate and charge for short-term rental sales. While some intermediaries collected and paid the tax under this framework, that approach was not consistent across the market.
For example, some cities and counties reached voluntary agreements with certain intermediary companies to collect the tax; others had to rely on property owners’ individual compliance. Some intermediary companies took the position that the tax did not apply to them.
Michelle DeLappe is a guest author, and a member of GSB's State and Local Tax, and Property Tax Practice Groups. She can be reached at email@example.com or at 206.816.1403.
Washington lawmakers have decided that all types of lodging in King County should participate in funding the Washington State Convention Center. Since the advent of King County’s convention center tax in 1982, hotels and motels with 60 or more units have had to collect from guests not only the retail sales tax, but also the convention center tax. In Seattle, the convention center tax is 7 percent; in the rest of King County it is 2.8%. As smaller lodging facilities and short-term rentals have increased in popularity, it has become clear that exempting them from the convention center tax has been giving them an unfair basis for competing against larger facilities.
The future has arrived, and it has a strange sense of humor. Pokémon Go — an “augmented reality” game that requires players to travel to real world locations to capture imaginary monsters through apps on their mobile devices — is changing how millennials choose their travel destinations and hotels. These games have inspired a new generation of travelers, and present novel opportunities to businesses in the hospitality sector.
2016 Hospitality Upgrade's Executive Vendor Summit is held in Atlanta, GA on March 30 - April 1, 2016.
For those of you who attended, or did not attend the conference, my presentation, "Evolving US and EU Privacy Laws”, is available below. The presentation reviews the rapidly changing landscape of US and EU privacy regulations and how compliance with those regulations will affect hotels and their many vendors and suppliers.
California employers are currently scratching their heads over how to interpret “suitable seating” that is required under California Wage Orders. Nancy Cooper, member of our Labor and Employment Group and Hospitality, Travel and Tourism practice team, discusses how that term is defined will affect your business. Thank you for today’s post, Nancy! - Greg
Section 1198 of the Labor Code of California states that the “employment of any employee for longer hours than those fixed by the order or under conditions of labor prohibited by the order is unlawful.
References to the “order” refer to California Wage Orders, which are issued from time to time by the California Industrial Welfare Commission and establish wages and working conditions for a number of industries within California. Section 14 of the majority of the California Wage Orders say that an employer must provide “all working employees” with “suitable seats when the nature of the work reasonably permits the use of seats.” What each Wage Order does not say is what this means.
Even though these Wage Orders have been around for decades, they are only now the focus of many lawsuits. So why now? Well, that is also hard to answer. These laws were originally focused on allowing employees who worked on certain equipment or in other jobs that were essentially stationary to sit down as they performed their work. There used to be many more “suitable seating” laws across the nation. They appear to have originated in the 1950s and were focused on the increasing number of females in the workplace. They have either remained on the books (though neutralized to be gender neutral) or taken off the books altogether. The California laws came to life with the passage of the Private Attorney General Act (PAGA). Under PAGA (which was deemed to apply to the suitable seating laws) an employee can seek up to a year of civil penalties and attorney fees, including a civil penalty of $100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation. So, now there is real money tied to the law. Where there is real money – lawyers will follow.
Two of the more notable suits involving suitable seating are class actions that are currently on appeal with the Ninth Circuit Court of Appeals. As the Ninth Circuit was trying to interpret the law and make a ruling in these cases, the Court discovered that there was not clear interpretation of the law in California state court. There was not sufficient guidance from state courts to inform the Ninth Circuit what was intended under the law. Thus, the Ninth Circuit said that rather than substitute its own judgment in the interpretation of California law, it asked the Supreme Court of California to clarify three specific questions.
They first asked the California Supreme Court to clarify whether the term “nature of the work” refers to individual tasks that an employee performs during the day, or whether it should be read “holistically” to cover a full range of duties. As a sub-part to this question, if the courts should construe the “nature of the work” requirement holistically, should they then consider the entire range of an employee’s duties if more than half of the employee’s time is spent performing tasks that reasonably allow the use of a seat?
The second question the California Supreme Court was been asked to clarify is whether an employer's business judgment should be considered in determining whether the nature of the work “reasonably permits” the use of a seat, as well as the physical layout of the workplace and the employee’s physical characteristics.
The third and final question posed to the California Supreme Court was to clarify whether the employee must prove what would constitute a “suitable seat” in order to prevail.
So, what does this mean to the California hospitality industry? It could change the way in which operations are designed and how job expectations are defined. What if a sous chef wants a stool as he does prep work? Can the kitchen design handle the arrangement? How does that reconcile with the hazards of the kitchen workplace? Can it be set up in the often narrow passage ways of the kitchen?
How does the hostess position effectively use a seat and still present a welcoming atmosphere to the clientele? What about the wait staff? If they are given a seated area for use when the floor is not busy – what happens if someone is sitting down when they really should be tending to tables or cleaning the stations?
What about the reception desks at hotels and the spas? Do they give the same image if they are sitting down – even if on a high stool? More importantly, do you now have to change the lay-out of the reception area? Is there enough room for the employees to be seated or use a stool? Is a stool even considered “suitable seating”?
If a job or worksite has been modified as an accommodation to an individual in a wheelchair, does that mean that it is now considered to be a job that automatically can be performed when seated – even when it historically has not been?
It is not known when the California Supreme Court will provide answers to the questions posed by the Ninth Circuit. Any guidance offered by the Court will still be open to interpretation and lead to more suits. The answers will not be specific to any given industry. The Court is unlikely to provide guidance on the interplay with other laws (e.g. workplace safety, OSHA, etc.) as well as define who has the burden to prove the violations exist and that the solutions are or are not reasonable.
Some of the early California cases regarding suitable seating suggest that there may be some considerations available to employers. If a company can demonstrate that there is a genuine customer-service rationale for requiring the employees to stand, the company may have an argument. Depending on the nature of the service provided by the employee, it is acceptable for a Company right to be concerned with efficiency – and the appearance of efficiency – of the delivered service. These early cases have expressed concern not only about safety, but also about the employee’s ability to project a “ready-to-assist attitude” to the clientele. It is not clear that these arguments will survive the California Supreme Court’s analysis. It is anticipated that the answers will only create more questions, so it is well advised to start looking at your facilities as well as your job descriptions now so you can be prepared to take steps to not become the next lawsuit target.
Lately, we’ve been hearing from a number of our clients and friends in the industry of a startling increase in the number of letters and emails alleging patent infringement. As hospitality- and restaurant-industry businesses become bigger and bigger users of patentable technology, we expect we may see many more of these claims. In an effort to provide a straightforward set of guidelines to our clients and friends, I went to my litigation partner, Tom Richardson, who happens to be defending a number of alleged patent infringement claims right now, and good friend and patent attorney, Charles Moore, and asked them for a streamlined checklist of how to handle receipt of such a letter or email. Tom brings over 35 years of litigation experience to a broad range of complex cases, including anti-trust and business torts; securities; trademark, copyright and patent disputes; complex commercial contract cases; and product liability and warranty claims and risk avoidance. Charles is a patent attorney with the Portland, OR intellectual property firm of Alleman Hall McCoy Russell & Tuttle, LLP, where he represents clients in a variety of patent matters, including helping them defend against patent troll claims, and preparing and prosecuting patent applications before the U.S. Patent and Trademark Office. Charles also has over 13 years of in-house practice, most recently as Senior IP Counsel with Hewlett-Packard Company. Here are their suggestions:
Our friends at Seattle's Convention and Visitors Bureau have issued a "Call to Action" regarding Substitute House Bill 1371: Boards and Commissions. They have requested our help with the following:
Happy New Year (belated)! The new year means new opportunities, and in the Hospitality industry that means it’s events time! The calendar of upcoming events is varied, but here are a couple that I plan to attend:
ALIS (America’s Lodging Investment Summit): I will be attending this San Diego event, January 24 through 26. According to the website, ALIS is the “leading and largest hotel investment conference in the world, attracting more than 7,000 delegates from around the globe over the past three years.” If you plan to attend, and you’d like to get together, please email me.
2011 Hospitality Law Conference: Held at the Omni Houston Hotel in Houston, Texas, this event covers the latest trends and issues in hospitality law. This year, I’ll be speaking at the conference on the topic of distribution. I would love to meet up with you in Houston; just send me an email and let’s get together.
Of course, I’ll be providing updates and a thorough follow up after each conference. If there is a topic to be covered at either of these events that you’d like particularly to hear about, please let me know and I’ll do my best to cover it.
Given the recent attention paid by clients to local security issues (including the recent and well received Hotel Industry Security Forum sponsored with the Washington Lodging Association – see Ruth Walter’s recent post on this event), I thought it a good time to review the obligations imposed by law on hoteliers and restaurateurs in Washington and Oregon to protect their guests and customers from crimes committed by third parties. In other words, what responsibility does a hotel or restaurant owner have for guests or customers who are injured (or whose property is damaged or stolen) by criminals. As I explain below, the more a hotel or restaurant owners knows about potential criminal conduct at her establishment, the more likely it is that she may be held responsible for not warning and/or protecting her guests or clients against it.
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.