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INSURANCE COVERAGE FOR HOTELS FACING FUNGI AND BACTERIA CLAIMS

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EXAMINING FRAUD & RECOVERY DOMESTIC VIOLENCE IN THE INDUSTRY

OHSA AND WHISTLEBLOWERS CONFERENCE UPDATES


Hi folks, Air travel analysts predict that the summer of 2013 will see the most people getting on planes since the summer of 2007, which means that travel risk management has never been a more timely topic! Savvy travel managers will keep a close eye on trends as we make our way through June, July, and August. HospitalityLawyer.com aims to explore this increase in travel at the 3rd Global Congress on Travel Risk Management, held from September 30 to October 1 at the Galleria Omni Hotel in Houston, Texas, as part of a comprehensive analysis of the Duty of Care equation. The impact of escalating summer travel won’t end there; hotel managers and restaurant operators have a busy season ahead of them, which means hospitality lawyers will find themselves on the frontlines of this trend! Learn, adapt, and overcome the challenges you encounter, and bring your newest experiences and knowledge to the next Hospitality Law Conference, February 10-12, 2014. Yes, this means we’re all going to put in a little overtime this summer, but it also means we’re in the right line of work at a very exciting time! If you’re interested in sponsoring, attending, or presenting at our conferences, don’t hesitate to give us a call (713-963-8800) or shoot us an email. Our door is always open.

PRESIDENT AND FOUNDER, HOSPITALITYLAWYER.COM


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Insurance Coverage for Hotels Facing Fungi and Bacteria Claims • David P. Bender, Jr. and Michael J. Stoner • Anderson Kill & Olick, P.C.

3rd Global Congress on Travel Risk Management: Teaser #1 and More!

HOTELS & RESTAURANTS

• September 30 - October , 2013

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Crime Pays: A Conversation of Fraud and Recovery • Chris Giovino • Dempsey Partners LLC

Make It Your Business: 3 Reasons Why the Hospitality Industry Should Address Domestic Violence • Lynn Fairweather, MSW • Presage Consulting & Training, LLC

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Cussing Out Your Employee May Get You Sued…By OSHA? • Howard Mavity • Fisher & Phillips


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By Chris Giovino, Partner, Dempsey Partners LLC

Please give us a brief description of your practice. ccupational fraud and crime is a significant and caused $3.5 trillion in losses. The typical fraud lasted growing exposure for all industries, including two years. The median loss was $140,000 and one in hospitality. In recent years, the challenging economy five involved losses was $1 million or more. has helped to drive the incidence of these crimes. However, the good news is that anti-fraud controls, A study by the Association of Certified Fraud including hotlines, surprise audits and anti-fraud Examiners (Association of Certified Fraud Examiners: training can significantly reduce a company’s 2012 Report to the Nations) found occupational fraud exposure to loss.

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DEVELOPMENTS With these crimes, literally anyone in an organization is a potential perpetrator. Criminals range from hourly employees all the way up to senior management, including the CEO. The size of loss correlates with annual income level, tenure, age, education, and the level of collusion involved in the crime. Among perpetrators, 87% were first-time offenders; 36% were considered “living beyond their means,” and 27% had been experiencing financial difficulties. However, more often than not, the perpetrator has done the same thing at one or more former employers. Perhaps the most significant potential financial remedy for occupational crime and fraud is crime insurance. If your company has insurance, review the adequacy of coverage and limits. In addition, see if you have “cost/fee coverage,” which can pay for the use of outside providers to help investigate a crime. Until they are victims, many businesses don’t realize they are woefully under-insured and lack cost/fee coverage.

FRAUD RISK FACTORS To help organizations assess their potential exposure to occupational crime or fraud, the Association of Fraud Examiners has identified some key considerations, often called the “triangle” or “three legs of fraud.” First, consider the impetus to perpetrate a fraud. The business driver having to “make a number” might lead one to manipulate transactions. And there’s the personal motivation, usually financial gain or desperation, to engage in theft against the employer.

Another factor is opportunity: Does a potential perpetrator have access to assets? Are controls inadequate or non-existent? Corporate culture plays a part as well. Even in a strong outward culture of integrity, the feeling may be different within specific departments or functions. Is financial aggressiveness or risk-taking part of the organization’s culture or a desired attribute for a certain class of employees?

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WHAT TO DO IF FRAUD IS SUSPECTED If occupational fraud is suspected, absent any exigent or life-threatening issues, you might take the following measures:

1. Locate and read the company’s crime or fidelity insurance policy. 2. Conduct an investigation before notifying your insurer. 3. Give proper notice to your crime and property insurers. 4. Note the time on your insurance policy to file “Proof of Loss.” 5. Note the time to file suit against your insurer for non-payment of a loss. 6. Conduct a thorough internal investigation. 7. Work with your human resources, communications, operations, finance and other functions, employment attorneys and outside counsel to address potential employee issues. 8. Consider cviil litigation against the perpetrators. 9. Consider criminal prosecution.

THE LOSS ADJUSTMENT PROCESS Crime claims are unlike other claims for property damage loss or business interruption loss, or simple accidental liability matters like car damage. They are conducted within guideline time restrictions. There is a frequently exercised

provision for an extension, so, there’s no reason to rush. While claims may be paid as submitted, the norm is to be challenged and receive the carrier’s offer and negotiate. Here’s the typical sequence of events involved in filing an insurance claim:

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DEVELOPMENTS 1. Your company and its support team conduct a preliminary investigation. 2. You file a notice of a potential claim with your insurance company. 3. Establish the facts (liability) and the amount of damages. 4. File a sworn “Proof of Loss” with your insurer. 5. The insurer conducts its own investigation and audit. 6. Your team meets with that of your insurers to reconcile potential issues and differences that may arise with respect to your claim. 7. These elements are negotiated and ultimately settled. While some points of difference between you and your insurer are inevitable, it generally makes the most sense to pick spots carefully for arguing with your insurer. You may not want to stall the overall negotiation and potential settlement by disputing smaller points. 8. Understand potential subrogation, which typically takes place among insurers in situations involving overlapping coverages.

MANAGING THE INTERNAL INVESTIGATION: WHO DOES WHAT? In an internal investigation, the principal leadership roles include: The risk manager, who oversees the process and communicates directly with the firm’s insurance broker and/or insurance carrier(s). The in-house counsel, who manages the internal audit, investigation, litigation, law enforcement activities, and controls costs. The investigator and forensic accountant, who conduct the investigation under external counsel (privilege) umbrella, working with in-house resources, such as internal audit.

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WORKING WITH LAW ENFORCEMENT If there is any potential danger surrounding the circumstances of your loss, call the local police. In this context “police” refers to the appropriate law enforcement agency for the specificities of your loss. While some members of your firm may feel the police should investigate, it is not always in your best interest to call too soon.

Understand the complexity and reach of your loss. Consider that any investigation or search for assets may be outside the local jurisdiction. If all is in-state and you have a state police division with strong investigative acumen, they may be perfect. Some county sheriffs have excellent investigators. You need to know.

Nonetheless, your insurance policy may contain a provision that dictates notifying law enforcement. Pay attention to whether it is simple notice or whether you must file a report and refer the matter. They are very different.

Often, the complexity and need to reach across state lines or outside the country will dictate that you seek federal assistance. The FBI, IRS, Secret Service, ICE, Marshal Service and the Postal Inspectors have different priorities, skill sets, thresholds and capacity. For example, the U.S. Attorneys’ Offices have different thresholds and priorities throughout the country. Know which agency best fits your loss.

Remember: Once you refer your case, even though you may be the victim with certain rights, the investigators likely will make communication a oneway street. If the matter goes to a grand jury, you will be precluded from learning anything from law enforcement.

Your forensic accounting and internal investigation will be important to law enforcement; it provides them with quantum of loss, witnesses, statements, evidence and a road map. A symbiotic rapport may develop between the investigators and your forensic A crucial decision is when to call and, more importantly, whom to call. Mistakes in referring your team. A solid forensic investigation can also provide law enforcement with leads towards assets which investigation to the wrong agency or prosecutorial may be vital towards alternative restitution. office can lead to significant frustration.

MANAGING CIVIL LITIGATION As a practical matter, investigative firms and risk advisors generally do not advocate law suits. However, there may come a time when those investigating the crime will need bank records and other financial information. Law enforcement will likely get them from search warrants and grand jury subpoenas. You will not be able to share in their good fortune.

The civil subpoena and civil discovery can be valuable tools used to establish the existence and amount of loss, including an examination of vendor business records, employee bank accounts, and shell company documents. Typically, civil litigation follows the investigation in the form of a subrogation action by the carrier. If litigation is inevitable, getting the process started

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SWORN PROOF OF LOSS The proof of loss is a series of documents that will include a detailed narrative flow of what happened and who did what to whom. That is followed by a well-documented calculation of the loss. You will need to provide all source documents. This is a standard insurance policy requirement. Note the time requirements for filing the proof of loss, as well as any possible suit against the insurance carrier. Also consider how much evidence is sufficient: Insurers will go to great lengths to validate and develop the facts.

When a loss occurs, insurance coverage attorney, David P. Bender, shareholder, Anderson Kill, Ventura, California, advises businesses to construct a team “consisting of forensic accountants with experience in these cases; an insurance coverage lawyer and other technical experts as necessary to prove proof of loss. “Any insured that relies solely on the insurance company or even law enforcement to prove their loss will not get the full benefits due them under their insurance policy,” he warns.

DAMAGES AND QUANTIFICATION OF PROOF Keep in mind, proof of damages must be actual calculations and not estimates: Insurers have no incentive to pay “estimates.” You can use a variety of approaches to quantify damages, including

historical trends or any statistical anomalies that you might be able to identify. In filing your claim, be prepared to defend any assumptions.

CONCLUSION The hospitality industry finds itself constantly in the cross-hairs of employees and others who covet and criminally target the high volume of goods, foodstuff, liquor, valuables, and cash. The industry has incredible internal resources, such as security and audit, to fight fraud and theft. In spite of best practices, those who want to “take” and who have been in position to exploit flaws or openings or soft spots in the best controls will do so and you will sustain losses.

Preparation is at least as important as prevention. Those responsible for risk management should recognize the potential for a loss due to employee malfeasance and external forces alike. There should be an exercise to quantify worst-case scenarios as is done typically for physical damage and business interruption losses. Then, spend the time to cultivate relationships within the organization and create a “go to” SWAT team for that moment when fraud is suspected or in fact substantiated. Be well read, provide proper notice, and recover your loss to the fullest extent.

Chris Giovino, Partner-in-charge P: (203) 762-5052

E: chrisgiovino@dempseypartners.com


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By David P. Bender, Jr. and Michael J. Stoner

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ne nightmare scenario faced by hotel and resort executives is dealing with the former guest who claims that he or she contracted a fungal or bacterial illness at their establishment. True or not, the last thing that a hotel or resort wants associated with its name is “fungus” or “bacteria.” Yet with the increasingly widespread usage of social media and anonymous access to review sites such as Yelp or TripAdvisor, the mere allegations of “fungus” or “bacteria” can cause potential guests to, at the very least, take their business elsewhere. In addition to the public relation problems, allegations of bacterial and

fungal injuries at a hotel or resort can lead to expensive litigation and substantial liability. Too often, though, insurance companies refuse to defend or settle these types of claims under the comprehensive general liability policies they have sold, basing the denial on two common policy exclusions: a Fungi and Bacteria Exclusion and the Pollution Exclusion. In such cases, policyholders in the hospitality industry should be prepared to fight back. The insurance company’s ability to deny these claims on the basis of this exclusion may be more limited than it leads one to believe.

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FUNGI AND BACTERIA EXCLUSION The standard Fungi and Bacteria Exclusion is not as broad as the name may imply. Endorsed to many comprehensive general liability policies, the Fungi and Bacteria Exclusion does not eliminate coverage for all claims arising out of exposure to a fungi or bacteria, but only when the fungi are “on or within a building or structure…” There are numerous places within a hotel or resort where a guest could potentially be exposed to a harmful bacterium of fungi: Outdoor swimming pools, golf courses, gardens, spas, parking lots, ski slopes, etc. If it’s not in a building or structure, it’s not excluded under the Fungi and Bacteria Endorsement.

“Building” and “structure” are usually not defined in the standard Fungi and Bacteria Exclusion. Alert policyholders can employ this vagueness in their evaluation. Exclusions are construed narrowly and ambiguous terms are resolved in favor of the policyholder in most jurisdictions. Therefore, if there are reasonable grounds to say that something is not a building or structure, then it’s not a building or structure with respect to the Fungi and Bacteria Exclusion. So long as it is possible that the exposure occurred somewhere on the property other than a building or structure, the insurance company will generally owe a complete defense in the matter.

POLLUTION EXCLUSION industry’s reasoning. The court reasoned that if fungi and bacteria were included within the scope of the Pollution Exclusion, there would be no reason at all for the existence of a Fungi or Bacteria Exclusion. Westport Insurance Co. v. VN Hotel Group, LLC, 2013 WL 1196957 (11th Cir. Mar. 22, 2013). Because every claim triggering the Fungi or Bacteria Exclusion would already be excluded under the Pollution Exclusion, the Fungi or Bacteria Exclusion would serve no useful purpose. Such a result would fail to give full meaning and operative effect to the entire policy – a standard rule for interpreting insurance policies. See id. at * 9. As such, the Court rightly recognized that the fungus and A recent decision by the Eleventh Circuit Court of bacteria fell outside the scope of “pollutant” Appeals highlights a flaw in the insurance under the policy. Perhaps recognizing that the Fungi and Bacteria Exclusion did not completely eliminate the potential for coverage, more and more insurance companies are seeking to expand the scope of the pollution exclusion to include Fungi and Bacteria. “Pollution” is often defined as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste . . .” As virtually any substance could theoretically be shoehorned into that definition by a clever insurance company, many carriers have aggressively relied on the pollution exclusion to limit coverage.

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CONCLUSION Dealing with bacteria and fungus claims can be a headache for any hotel or resort for many reasons – but uncooperative insurance companies should not be one of them. By understanding the limits of the Fungi and Bacteria Exclusion and the Pollution Exclusion, a hotel or resort can substantially increase its chance of recovery from its insurance company

without the need to resort to expensive litigation. Of course, given the complexity of these cases and the nuances of each individual insurance policy, it is always recommended that coverage counsel be consulted for any specific matter.

david p. bender, jr. managing shareholder P: (805) 288-1300

E: dbender@andersonkill.com

David P. Bender, Jr. (dbender@andersonkill.com) is the managing shareholder in the Ventura, California, office of Anderson Kill & Olick, P.C. Mr. Bender co-chairs the firm’s Hospitality Industry Practice Group and is a member of the Board of Directors of the Academy of Hospitality Industry Attorneys. A long-time advocate of policyholder’s rights, Mr. Bender represents public and private corporations, financial institutions, private and public educational institutions, and boards of directors.

michael j. stoner associate P: (805) 288-1300

E: mstoner@andersonkill.com

Michael J. Stoner (mstoner@andersonkill.com), an associate in the firm’s California office, is a member of the firm’s Hospitality Industry Practice Group. His practice focuses on insurance recovery, corporate and commercial litigation, and environmental law

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HOTELS & RESTAURANTS

Make It Your Business 3 Reasons Why the Hospitality Industry Should Address Domestic Violence By Lynn Fairweather, MSW, Presage Consulting & Training, LLC

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s a threat assessment and management consultant, I often face the challenge of convincing employers to heed potential workforce “time bombs”, including those they can’t hear ticking just yet. Sometimes new clients seek me out because a “personnel land mine” just exploded inside their organization, seemingly without warning. The danger I’m referring to comes from domestic violence, and

unfortunately many businesses don’t realize they have a problem until an assault occurs on premises, as it will for one in four large companies. Current estimates indicate that nearly two thirds of all women have been physically, sexually, or severely emotionally abused by an intimate partner. Men can also be abused, but statistics show that the majority of victims are female.

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HOTELS & RESTAURANTS One study in particular tells us that 74% of abused women are employed, and for many, the maltreatment received at home continues at work.1 For example, abusers frequently call victims on the job to check up on, harass, or threaten them. They may show up in person to do the same, bothering or intimidating customers and other workers as well. In fact, current or former husbands and boyfriends commit over 14,000 violent incidents in the workplace each year.2 For the hospitality industry, the risks may be particularly elevated. Why? First, hotel lobbies and restaurants are generally open to public access, making it easier for an abuser to reach his target. Second, the hospitality field is often a place where younger, more transient workers find employment. Many are in lower paid, entry level positions and more than half are female, all factors that correlate with victimization. Third, in the

hospitality industry, domestic violence can occur on a number of fronts, involving line workers, executives, customers, or overnight guests. Employers must take action on multiple levels to prevent violence in their workplace. Although workplace attacks are never completely avoidable, there are concrete steps companies can take to protect employees and customers, while simultaneously reducing health care costs, absenteeism, and legal risks. Organizing and implementing a corporate domestic violence response program is easier and more cost effective than you might think. Here are three compelling arguments for the investment, beginning with the most urgent:

#1: Safety Of all the things that could possibly cause a female worker’s death on the job, from falls to electrocution, in most years the leader of the pack is homicide. In roughly 20% of these murders, the alleged killer was the victim’s current or former intimate partner.3 Such was the case in Orlando, FL on September 27, 2012. That was the day Michelet Polynice brought a handgun to the Quality Suites Inn where his ex-girlfriend Carlene Pierre was working at the front desk. Two weeks before, Polynice had been served with a restraining order for hitting Carlene with his car in the hotel’s parking lot. Carlene and her co-worker Vanessa Gonzalez-Orellanes were shot and killed instantly. Polynice then drove to the Westgate Lakes Resort parking lot where he shot and wounded Carlene’s best friend Jean Guerline before killing himself. This tragedy is, of course, a worst case

scenario, but its occurrence proves that such an attack (or even a larger one) could be looming just around the corner. Research has shown that most corporate security directors are already aware of the threat domestic violence in the workplace poses. In fact, in a recent survey, 94% of them ranked domestic violence as a high security problem at their company. 4 Yet oddly, another study found that although a significant majority of corporate executives recognized the devastating impact of domestic violence in the workplace, only 13% thought their company should address the problem. 5 If the safety of their employees and the general public is not enough to sway the C class, perhaps this next point will get their attention:

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#2: Cost Being abused at home (and possibly at work) can result in a number of problems for employees, and thus multiple costly issues for their employer. For example, a victim of domestic violence may sustain injuries, causing them embarrassment and pain which then produces absenteeism and health care costs for their company. When they do return to work, they may arrive late or leave early, because their abuser has kept them up all night or sabotaged their childcare and transportation plans. While on the job, victims can suffer from anxiety, humiliation, and an inability to concentrate, due to threatening phone calls or visits from their abuser. The victim’s co-workers experience difficulty when these things happen as well, because they may be worried for her safety, frightened for their own, or resentful that they have to take up her extra work. Over time, these concerns can produce low morale and a high turnover rate. When translated to dollars, the cost of abuse becomes colossal: U.S. employers collectively pay out more than $5.8 billion each year in lost productivity, absenteeism, and health care costs related to domestic violence.6

Employee victimization isn’t the only part of the equation that affects your bottom line. Although you may not know who they are, statistics say there are probably batterers working for your company right now. And according to one study, their abusive habits often crossover into the workplace. In addition to displaying bullying tendencies and aggressive behavior on the job, 78% of them admitted to using company resources and equipment to harass, threaten, or check up on their victim.7 Furthermore, 42 percent admitted being late to work, and 48 percent had difficulty concentrating on the job as a result of their abusive behaviors.8 Curious about how much domestic violence may be costing your company? Check out the Texas Health Resources Domestic Violence Cost Calculator at https://www2.texashealth.org/dv/. Your accountants may be in for an expensive surprise.

#3: Liability If you’re starting to see the benefits of addressing domestic violence, but still aren’t sure you could get company wide buy-in, consider bringing on the only team members who might seal the deal: the corporate lawyers. Attorneys have a keen understanding of liability issues, and therefore can help to drive home the following point: neglecting to take action against domestic violence could leave your company open to massive legal and financial risk. To begin with, there is the General Duty clause

of the Occupational Safety and Health Act of 1970, which says employers must take steps to protect their workers from acts of violence. If the employer fails to do so, the result may be a substantial OSHA fine, or worse. Jury awards for inadequate security suits average $1.2 million nationwide and settlements average $600,000.9 Considering that domestic violence makes up a quarter of all workplace violence, it’s an area well worth an employer’s focus.

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HOTELS & RESTAURANTS For example, when Francesia La Rose’s employer State Mutual Life Assurance Co. failed to take adequate action to protect her against a specific threat, they paid in both blood and money. Francesia was murdered by her former boyfriend at her work site, causing not only heartbreak for her family and trauma to her co-workers, but an $850,000 settlement by the company as well.10 Other legal considerations include the possibility of a discrimination claim, an Americans with Disabilities Act complaint, or a wrongful termination lawsuit from a victim who has been fired, not hired, or passed over for a promotion due to the fact that he or she is a victim of domestic violence. A company can also be sued if it is determined that they violated a victim’s privacy, ignored harassment from other employees toward the victim, imposed substandard or punitive job changes, or failed to allow a legitimate absence under the Family Medical Leave Act. Don’t forget about those batterer employees either. Successful lawsuits in many states have proven that companies can be held liable for the dangerous acts of employees if they don’t use reasonable care in hiring, training, supervising, or retaining them when harm was in any way foreseeable. A final but significant point for the hospitality industry to consider is that they are responsible not only for their employee’s safety but also that of customers, guests, and others invited onto their premises. For instance, if a hotel desk clerk issues a copy of a woman’s room key (without permission) to her estranged husband, who then enters the room and harms her, the hotel can held accountable. And no one wants to imagine the cost in lives and lawsuits that could accompany a domestic violence

related mass shooting in the workplace. As leaders of our country’s workforce, directly or indirectly employing 1 out of every 17 Americans, the hospitality industry is in prime position to effect change and take a stand against domestic violence. Not only might lives be saved, but individual companies could profit through both hard and soft benefits. If you are considering addressing domestic abuse within your workplace but don’t know how to begin, please read part two of this article in the next issue when I explain the steps required to create an effective, in-house domestic violence program.

REFERENCES 1) Report on Costs of Domestic Violence, Victim Services of New York, 1987. 2) Workplace Crime 1992-1996, Bureau of Justice Statistics, July 1998. 3) Bureau of Labor Statistics’ (BLS) Census of Fatal Occupational Injuries (CFOI) 2003 and U.S. Department of Labor, Women’s Bureau, Facts on Working Women, No. 96-3, October 1996. 4) Domestic violence can become public matter in the workplace. Amy Pavuk and Arelis R. Hernández. Orlando Sentinel, Orlando, FL. September 28, 2012. 6) The Cost of Violence in the United States. 2007. Centers for Disease Control and Prevention, National Centers for Injury Prevention and Control. Atlanta, GA 7) Employers Against Domestic Violence. http://employersagainstdomesticviolence.org/effects-on-workplace/workplace-dv-stats 8) Maine Department of Labor. 2004. Impact of Domestic Offenders on Occupational Safety & Health: A Pilot Study. 9) Perry, P. 1994. Assault in the workplace. Law, May 1, 41. 10) Burke, D.F. January, 2000. When employees are vulnerable, employers are too. The National Law Journal.

lynn fairweather, MSW PRESIDENT P: (503) 956-5444

E: lynnfairweather@ymail.com


HOTELS & RESTAURANTS

Cussing Your Employee Out May Get You Sued... By Howard Mavity, Partner, Fisher & Phillips

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opefully you’re already aware of the continuing escalation of all forms of whistleblower and retaliation claims, including under the 20+ Anti-Retaliation laws enforced by special investigators from OSHA’s Whistleblower group. If not, check out www.whistleblowers.gov. One of OSHA’s recent news releases states that the Labor Department has filed a lawsuit in the federal district court against Duane Thomas Marine Construction, and its owner Duane Thomas, for

By the OSHA?. terminating an employee who reported workplace violence, in violation of Section 11(c) of the OSH Act. Sounds fairly standard. OSHA asserts that an employer fired an employee for complaining about unsafe work conditions. It’s a bit unusual to hear that the alleged unsafe conditions involved fear of workplace violence, but who can blame an employee in the current environment? But as you read on, it turns out that the complained-of hazard was the owner!

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When the Owner is the Hazard The employee alleged that, on numerous occasions between 2009 and 2011, Mr. Thomas committed workplace violence and created hostile working conditions. He allegedly behaved abusively, made inappropriate sexual comments and advances, yelled, screamed, and made physically-threatening gestures, in addition to withholding the employee’s paycheck. The employee, who worked directly for Thomas, reported to him that he was creating hostile conditions. On Feb. 25, 2011, the employee filed a timely whistleblower complaint with OSHA alleging discrimination by Thomas for having reported the conditions to him.

investigation found merit to the employee’s complaint. And we’re not just talking reinstatement: OSHA seeks back wages, interest, and compensatory and punitive damages, as well as front pay in lieu of reinstatement. Additionally, it seeks to have the employee’s personnel records expunged with respect to the matters at issue in this case and to bar the employer against future violations of the OSH Act. Wow…. But first, the usual caveat: we don’t know all the facts.

The employer may have really behaved badly and given the complainant the ability to make out a viable claim. Or, the employee may have exaggerated, or even made up the whole thing. On March 18, 2011, Thomas received notification of the complaint filing. Five days later, Thomas had But while I have yet to see an employee lawsuit that was completely accurate, there must be at computer passwords changed in order to deny least some pretty bad facts to make OSHA take the employee remote access to files and then the action it did. terminated the employee. OSHA’s subsequent

Lessons and Action Points This atmosphere may or may not have presented a valid safety hazard, but guess what? Under the law, the violation is the act of terminating the employee for complaining about a safety concern. The concern does not have to be valid! (There is a different standard if the employee refuses to work because of an unfounded and unreasonable concern). For all we know, the employee could have annoyed his boss with unfounded complaints until the boss fired him in a moment of anger… but that too is a potential violation.

Our advice: eliminate from your vocabulary the two phrases: “Boys will be boys,” and “You had to be there.” The problem is that lawyers and Uncle Sam will also be there if one’s conduct is foolish enough. Train your supervisors to behave professionally regardless of the setting, and remind them of all the many behaviors, including some of the offbeat ones, that are protected as Whistleblowing.

howard mavity, partner P: (404) 231-1400

E: HMavity@laborlawyers.com


The Venza Group and Hospitality Evolution Resources are joining forces to develop the first robust and insightful training curriculum dedicated to the hospitality industry on the topic of protecting “Personally Identifiable Information” (PII). Scheduled for launch June 2013, the initial 4-pack of online training modules will teach hospitality staff about the crime of identity theft and the subsequent importance of protecting guest data – including the risks and consequences of guest data breaches along with steps to take to better safeguard the personal information of guests, employees, executives, and hotels. “We are pleased to be partnering with the leading hospitality online training provider, The Venza Group, to drive this initiative. Training hoteliers and hospitality staff about the importance of protecting Personally Identifiable Information or PII is a top line priority in 2013” said Evelyne Oreskovich, President of Hospitality Evolution Resources. “The industry is realizing that PCI compliance is just the tip of the iceberg. Encrypting credit card information is the first step

and protecting valuable identity information typically tied to hotel guest data is next. Often stored in raw, unprotected files, staff regularly shares PII both internally as well as externally; this unique curriculum truly offers the first hospitality driven course and presents the topic in detail from the victim’s perspective, while educating staff on the hotel’s liability. It is also the first system developed by the hotel industry for the hotel industry.” “Our team is excited to announce this partnership as we continue to focus on the development of online training modules with the hotelier in mind,” said Daniel Johnson, COO of Venza Group. “Hospitality Evolution Resources brings an incredible wealth and depth of knowledge with regards to privacy information awareness from the hotel perspective. We are sharing this groundbreaking training curriculum in a very consumable package that is far more robust than any other such program developed to date. We are thrilled to present this exciting new level of information on the topic of PII to the world.”

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HOTELS & RESTAURANTS The four initial training modules that comprise the new “Personally Identifiable Information” Curriculum include: 1. Introduction to PII: This essential PII introductory course is designed for all team members. It defines “Personally Identifiable Information” (PII), describes the crime of identity theft and highlights how identify theft can personally impact employees. Participants will learn how thieves get access to PII (PII is compromised online and offline as well as via third parties); procedures for protecting employee and guest data; employee responsibilities; tips and best practices for protecting employee and guest PII; as well as consequences to hotels and employees if breaches occur. 2. PII for Guest-Facing Staff: Whether part of the Call Center team or Reservations, Front Desk or Food & Beverage staff, this module teaches all those involved with point of sale or guest-facing services about how much PII they are exposed to every day. This course will train participants where threats exist in their day-to-day jobs, review possible scenarios and reflect on common practices that may benefit thieves, as well as identify the best practices that should be employed by point of sale staff to ensure safety of PII.

countries, and reviews the overall impact and consequences of PII breaches, including current lawsuits in the industry, negative press, liabilities and terminations. 4. PII for Executives: With the increasing focus on commercial entities by the media and government agencies, this training program addresses the roles and responsibilities of hotel executives with regard to protecting guest PII. The module reviews statistics about privacy violations and identity theft in the hotel industry, uncovers legal concerns and legislation, and touches on Human Resource requirements. Participants will review examples of how PII is compromised (onsite, offsite, via third parties); learn about laws affecting guests from certain states and other countries regarding how long their data can be stored post-departure; as well as develop an understanding for how the Federal Trade Commission protects privacy for consumers. Executives will learn real world best practices including: How to securely share and store data; how to train staff on PII policies; as well as the basic risks, mistakes, and consequences of breaches. This innovative PII online training curriculum consists of four standard modules described above and will be available in June, 2013. Three additional a la carte modules on the topics of PII for Human Resources, Accounting & Finance, and IT & Security are in the works - projected for completion in July, 2013. For additional information or to explore pre-launch promotional pricing call 770-685-6500.

3. PII for Sales & Marketing: This module addresses the growing fear of privacy violations and identity theft vs. the need for customer recognition and effective CRM in the hotel industry. Specifically created for Sales and Marketing team members, this course more clearly defines the types of hotel data that can be considered PII. Participants will learn the dangers, mistakes and best practices for using PII both internally and externally with Hospitality Evolution Resources (HER) provides a third party vendors. The course also uncovers lesser comprehensive array of services and solutions dedicated to the Hospitality industry including expert project known issues surrounding hosting guests from foreign Founded in 2008, the Venza Group® bridges the gap between technology and user competency for the travel/hospitality and retail industries worldwide. Software providers and hotels leverage the Venza Group’s expertise and unmatched passion for service to achieve system adoption and maximize operational efficacy. Armed with keen industry knowledge and a suite of products (e.g. Bridge™ and the PEAK™ Compliance and Performance training series), the Venza Group generates results. More than 5,000 hotels in over 100 countries look to the Venza Group for tools, technology and strategic thinking.

management, clear thought-leadership, strategic vision, gap analysis, RFP design, vendor vetting and training. Led by award-winning industry veterans with knowledge in diverse areas of the lodging business, HER provides Hospitality-related companies with “solutions that pack results” — effectively bridging the gap between Management, Operations, Technology and Marketing to motivate teams, improve productivity, lower costs, and increase revenue. The company additionally enjoys acclaim for its robust training curricula focused on a range of Hospitality focused topics including Distribution and PII security. For additional information, visit the company’s website at www.HER-Consulting.com.


FIND-A-LAWYER Need legal advice or representation for your company?

Check out HospitalityLawyer.com’s Find-A-Lawyer database to locate national and international attorneys with experience in the hospitaliy industry. You can search by country, state, industry area, and practice area. Visit us at www.HospitalityLawyer.com for more information.

Attorneys, join the Global Alliance of Travel, Tourism & Hospitality Attorneys (GATTHA) to receive: • • • • •

Global exposure to the hospitality community Listing in Find-A-Lawyer on our website Branded article placement in our publications Access to white papers, forms, checklists, and more Discount for the annual Hospitality Law Conference

SolutionsStore The HospitalityLawyer.com Solutions Store offers a variety of safety and security products, services, and solutions from companies with solutions specifically for hotels, restaurants, and country clubs. Visit www.HospitalityLawyer.com for more info.

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CONVERGE May/June 2013  

The official magazine of HospitalityLawyer.com!