Digital Threats Continue to Confront the Hospitality Industry

shutterstock_217014265Cybersecurity and digital threats were a hot topic at ALIS Law, a conference for hotel owners and operators, in Los Angeles last month.  I had a pleasure of moderating a session on “threats in a digital world” with senior executives from national hotel management and ownership groups.  In our session, we discussed what were some of the pressing and most concerning digital threats that kept the hospitality industry up at night.  Here are some highlights and take-aways from the session:

  • Cybersecurity and hacks from foreign and domestic threats remain a top concern. Many hotels have been engaging in surveillance as one method of cyber protection.  It was noted how much the investment in technology to prevent, address, and respond to cybersecurity issues has increased for both owners and operators.  While owners may bear the cost on their profit & loss statement, and management companies are putting in policies, owners are adding property specific monitoring.  It was discussed that one global hotel company, Hyatt Hotels, recently announced a bug bounty program whereby they will be paying ethical hackers to monitor their systems, including mobile applications, for potential risks and where credible risks or threats are found – the hackers will be compensated – which is a novel approach in the hospitality industry.
  • While cybersecurity threats have been a focus, one repeated concern is the threat of harm to a hotel’s reputation due to guests and third parties spreading false information on social media sites, such as LinkedIn, Yelp, and Trip Advisor. To address these concerns, hotel operators talk with their teams daily about the consequences of false information or a bad review and take steps to remove false reviews if possible.  Others noted that removing a false review from a site like Trip Advisor can be challenging unless the company is able to prove that the review was posted for criminal reasons or demonstratively false.
  • One consequence of a cybersecurity hack beyond the disclosure of guest information is if a hacker was able to secure personal identifiable information of a hotel company’s investors and borrowers. If investors are concerned that a hotel company is not protecting their highly confidential and personal financial information, that would have a significant impact on the reputational harm to the company.
  • Some of the best practices that owner and operators have put into place is an incident response plan to respond to a threat. In doing so, a key question is who you need at the table to decide how to move forward (IT / GC / PR / Owner) and what elements do you need to put into place.  In addition, implementing policies and procedures on the front end is critical.  For example, from an accounting perspective, having controls in place that can protect where the money is going and where it is coming from and ensuring that there are multiple approvals before money is sent out electronically.  Finally, training staff on the policies and procedures so that the right people are getting the right information.  Managers need to judge and reward staff for compliance with the policies because while a company continue to monitor and audit, training is only effective if compliance is monitored.  For example, one company reported conducting more secret shoppers to determine whether someone can drop a flash drive into a front desk computer to tap into the network.

Unfortunately, cybersecurity risks and threats are not going away anytime soon, but with planning and focus on this important issue, hotel owners and operators can get ahead of some of the threats and take control and strong action if a risk materializes.

Going Through Withdrawal – Strategies for Minimizing Your Multiemployer Pension Withdrawal Liability, Protecting Your Assets and Saving Your Business

Join Conn Maciel Carey Labor & Employment Practice Group partner, Mark Trapp, on November 14, 2018 when he presents an interactive workshop to help unionized employers understand and analyze what is often the most critical challenge facing their business – multiemployer pension withdrawal liability.  Attendees will learn innovative and aggressive techniques and strategies to address this issue and proactively secure the future of their company. Increasing Money Graph

This workshop will also discuss the current legislative environment for multiemployer pension plans and issues, particularly the work of the Joint Select Committee on Solvency of Multiemployer Pension Plans, charged with preparing a report and recommended legislative language by November 30 to “significantly improve the solvency” of multiemployer pension plans and the Pension Benefit Guaranty Corporation.

Workshop attendees will:

  • Gain a broad understanding of the challenges facing employers who participate in a multiemployer pension plan

  • Discover strategies for assessing and minimizing their withdrawal liability risks through collective bargaining and business planning

  • Examine the status and possibility of legislative relief from the Joint Select Committee on Solvency of Multiemployer Pension Plans

Click here to register.

[Webinar] A Business Primer on Disability Access Laws: Preventive Tools and Defense Strategies

On Thursday, October 25, 2018, at 1 pm EDT, join Kara M. Maciel and Andrew J. Sommer of Conn Maciel Carey’s national Labor & Employment Practice Group for a complimentary webinar:  “A Business Primer on Disability Access Laws:  Preventive Tools and Defense Strategies

Businesses continue to be plagued by litigation under the Americans with Disabilities, Title III (ADA) over alleged access barriers.  Lawsuits against hotels and retailers, among other public accommodations, appear to be on the rise with a disproportionate share in California.

Disability Webinar

This webinar will provide an overview of ADA, Title III standards as they apply to construction existing before the enactment of the ADA in 1992 as well as to subsequent new construction and alterations.  The webinar will also address Continue reading

NLRB Seeks to Change Joint Employer Test by Rulemaking

By:  Mark Trapp

On September 14, 2018, the National Labor Relations Board (“NLRB” or “Board”) published a Notice of Proposed Rulemaking (“Notice”). In its Notice, the Board states its belief that the “rulemaking will foster predictability and consistency regarding determinations of joint-employer status in a variety of business relationships.” At base, the Notice is an attempt to return the Board to its pre-2015 standard, which the Obama-era NLRB overruled in the controversial Browning-Ferris decision issued that year.

If enacted, the rules would provide a stronger degree of clarity and predictability to business owners and tighten the standard for finding one business to be a joint employer of another employer’s employees. Moreover, by enacting the standard through rulemaking, rather than adjudication, the NLRB decreases the likelihood of the standard being overturned by a later Board. Continue reading

Hurricanes Headaches:  HR FAQs for Employers

It’s hurricane season again in the US! Be prepared!

The Employer Defense Report

Hurricane.jpgHurricane Florence is approaching the United States, and first and foremost, employers need to make sure their employees, customers, and guests are safe from the storm.

Natural disasters such as hurricanes, earthquakes and tornadoes have posed unique human resource (HR) challenges from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time.

Although no one can ever be fully prepared for such natural disasters, it is important to be aware of the federal and state laws that address these situations. Our guidance can be used by employers in navigating through the legal and business implications created by events such as hurricanes.  In addition, the information may be applicable to other crises and disasters, such as fires, flu epidemics and workplace violence.

Frequently Asked Questions 

If…

View original post 1,400 more words

SCOTUS Approves Class Action Waivers in Employment Arbitration Agreements

By:  Kara Maciel and Dan Deacon

The U.S. Supreme Court ruled on Monday that class/collective action waiver clauses in employment agreements that compel employees to settle disputes individually with a third-party arbitrator are enforceable.  In a landmark 5-4 ruling, the Justices in the majority rejected the National Labor Relations Board’s position and held that a class/collective action waiver in an arbitration agreement – which effectively prohibit employees from joining together in a class or collective action lawsuit to settle disputes – do not violate the Federal Arbitration Act (“FAA”) or the National Labor Relations Act (“NLRA”).

Background

Arbitration agreements – requiring employees to submit claims to an arbitrator instead of filing in court – are relatively common in the workplace.  Many employers favor arbitration because it tends to lower the cost of litigation and streamlines a resolution.

The legal issue that percolated through the federal Courts of Appeals over the past several years was whether a class/collective action waiver in an arbitration agreement is enforceable.  An arbitration agreement that includes a class/collective action waiver benefits an employer because it prevents employees from banning together to file costly class or collective actions and it forces employees to utilize the arbitration process rather than filing a lawsuit.  Thus, the only form of redress for an employee is a single action that must be worked out before a neutral, third-party arbitrator.

Over the past five years, the Courts of Appeals issued conflicting opinions on whether class action waivers are enforceable.   Notably, between 2013 and 2014, employers were provided favorable opinions from the U.S. Courts of Appeals for the Fifth, Second, and Eleventh Circuit which concluded that the NLRA does not invalidate class action waivers in arbitration agreements.  In contrast, in 2016, the U.S. Courts of Appeals for the Ninth and Seventh Circuit adopted the NLRB’s position that class and collective action waivers violate Section 7 of the NLRA.

The Supreme Court’s Decision

The Supreme Court’s ruling brings finality to an issue that sparked years of debate and caused significant uncertainty for employers.  Oral arguments took place in October 2017 with the justices appearing split along ideological lines – except for Justices Clarence Thomas and Neil Gorsuch who did not speak at all during the session.  Interestingly, however, it was Justice Gorsuch who wrote the opinion – which was his first major opinion since joining the Court last spring.

As alluded to in our prior blog post, President Trump’s ability to fill Justice Scalia’s vacancy was ultimately a deciding factor in what appears to have been a partisan showdown.  Speaking for the conservative wing on the bench, Justice Gorsuch explained that the law is clear that Congress in enacting the FAA instructed federal courts to enforce arbitration as written, including those terms calling for individualized proceedings, and that the “decision does nothing to override” what Congress has done.  In a lengthy dissent, Justice Ginsburg criticized the majority for overturning 80 years of NLRB precedent.  Justice Ginsburg commented that the majority’s decision is “egregiously wrong” and expressed concerns that many employees with small claims, such as minimum wage and overtime violations, will be disinclined to pursue potential claims individually.

The expected fall-out and the future of this ruling now rests with Congress.  Congress certainly has the ability to revise the FAA and the NLRA through legislation.  Given the deep split amongst party lines, however, it is unlikely that Congress will act any time soon.

Take Aways for Employers 

In light of the Court’s decision, employers should immediately review their practices and policies governing employment agreements with arbitration clauses.  For those employers who do not require arbitration of disputes, now may be the time to reconsider whether to implement such an agreement with current employees.  For those employers who have arbitration agreements in place already, now is the time to ensure the agreement contains an enforceable class/collective action waiver, especially for wage and hour disputes.  Employers may want to evaluate whether to restrict class/collection actions for other types of disputes, such as discrimination or harassment cases.  Importantly, any arbitration agreement must be drafted with the company culture in mind.

In short, employers now have the ability to utilize a new forum to resolve legal disputes on an individual basis.  In some circumstances, especially for class/collection claims, an arbitration may be less expensive than lawsuits, take less time, and do not typically result in years of appeals.  Ultimately, the Supreme Court’s decision is welcome news for employers.  Employers can proactively mitigate litigation risk through carefully drafted employment agreements and more effectively manage legal disputes.

Conn Maciel Carey Welcomes Former CSB Attorney-Investigator to the Firm

beeta lashkariWashington, D.C.-based Labor & Employment and OSHA / Workplace Safety boutique law firm Conn Maciel Carey LLP is pleased to announce that Beeta B. Lashkari has joined the firm as an attorney in its Washington, D.C. office.

Ms. Lashkari, a former attorney-investigator at the U.S. Chemical Safety and Hazard Investigation Board (CSB), has extensive experience handling government investigations and is equipped to defend clients in an array of matters before federal, state, and local government agencies, including OSHA 11(c) and whistleblower retaliation claims and EEOC investigations and enforcement actions.

Ms. Lashkari will assist the Labor and Employment practice group in advising and representing clients in a wide-range of inspections, investigations, and enforcement actions, including those from the EEOC, the Department of Labor’s Wage and Hour Division, the U.S. Occupational Safety and Health Administration (OSHA), the U.S. Environmental Protection Agency, the CSB, and state and local employment agencies.  In addition to her work with the Labor and Employment practice group, Ms. Lashkari will assist the OSHA Workplace Safety practice group in advising and representing clients in a wide-range of inspections, investigations, and enforcement actions before federal OSHA and state OSH agencies.

“We are thrilled to have Beeta join our growing niche practice and look forward to utilizing her government investigation experience to the benefit our employer clients,” said Kara M. Maciel, Chair, Labor & Employment Practice Group.