Duff on Hospitality Law

The Office of Federal Contract Compliance Programs (OFCCP) enforces regulations aimed at federal government contractors, with a specific eye towards preventing both intentional and unintentional employment discrimination based on any protected class (e.g. race, sex, or disability). Many employers think that the OFCCP has no interest in them because they do no business with the federal government. If only it were that easy. Many clients have called after receiving notice that they now are considered a federal contractor because of a service that was purchased by a previously unknown federal government group.

It is important to be aware of your status as a federal contractor because you may need to comply with complex affirmative action practices, including for hiring, and you may need to keep detailed records of your efforts to comply. In addition, OFCCP rules have been changing lately. The new rules expand the affirmative action, non-discrimination, and related record keeping obligations for contractors regarding covered veterans and individuals with disabilities. So, even if you thought you were doing it right – you may need to make changes.

As fast food workers across the country stage walkouts in a push for a $15 hourly wage and the Obama administration renews its call to boost the federal minimum wage, states on the left coast have already embraced employee-friendly increases.

Oregon, the state with the second-highest minimum wage in the country, announced last week that it will raise its minimum wage to $9.10 in 2014. It’s in good company: Oregon’s neighbor to the north just announced that Washington will raise its state minimum wage to $9.32 (the highest in the nation), and Oregon’s neighbor to the south just enacted a law that will hike California’s minimum wage to $10 per hour over the next three years in one dollar increments – from $8 to $9 on July 1, 2014, then to $10 on January 1, 2016.

I’m happy to see my quote in the recent Bloomberg article showcasing examples of private equity firms taking advantage of the rising hotel market. It’s an article worth reading!

Blackstone Seeks IPOs as Hotel Sales Climb: Real Estate

“In a nine-inning game, we’re probably in the sixth inning,” said Greg Duff, chairman of the Hospitality, Travel & Tourism practice of Seattle-based law firm Garvey Schubert Barer.“ On many levels and in many different markets in terms of occupancy, we have met or exceeded where we were pre-recession.”

The Seattle Office of Civil Rights has recently issued proposed rules to implement the Job Assistance Ordinance, which limits the consideration of criminal history information in hiring and employment decisions within the City of Seattle. See my previous post on the topic HERE. The Office of Civil Rights is seeking public comment on these proposed rules.

Tomorrow, Floyd “Money” Mayweather and Saúl “Canelo” Álvarez (“El Canelo”) will fight a much-anticipated title bout at the MGM Grand in Las Vegas, bringing in what Showtime certainly hopes will be record-breaking pay-per-view revenues.

Today, after a week of difficult negotiations with huge telecommunications companies on behalf of my hotel clients, a week of wondering what to write for this blog, and a challenging sparring session on Wednesday, it occurred to me to write a bit about boxing. A lot of people hate lawyers and a lot of people think boxing is a violent, brutish sport that should be shunned in a civilized society. I’m a lawyer and I box. Full disclosure: I'm taking boxing lessons at Cappy’s Boxing Gym in Seattle, and the gym is a client of the firm. The thoughts in this post are my own and not our client’s. Finally, and for the record, I have never punched anyone or anything at work. I promise.

To Pay or Not to Pay?

As the school year begins again, it is a great time for hoteliers to think about their unpaid internship programs. Unpaid internships can be great symbiotic relationships. College students or individuals trying out new fields are willing to work for free in exchange for real-life work experience and something to add to their resumes. However before accepting free labor, employers must be aware of the potential consequences of this relationship and take steps to ensure their internship program complies with the law.

The U.S. General Services Administration (GSA) has released its Fiscal Year 2014 per diem rates. While the standard continental U.S. per diem is up to $83, per diem rates in the Northwest have largely remained unchanged. For more information on the new rates, visit the U.S. General Services Administration website.

The U.K.'s Office of Fair Trade (OFT) is currently evaluating and accepting public comments on whether formal commitments proposed by Booking.com B.V. (Booking.com), Expedia Inc (Expedia) and InterContinental Hotels Group plc (IHG) sufficiently address its competition concerns regarding the online offering of room only hotel accommodations by Online Travel Agents. The OFT is soliciting feedback on whether the proposed commitments offer an immediate and effective means of injecting meaningful competition into the online bookings.

Read full Press Release and Notice

What these commitments will mean for pricing parity in the future remains to be seen. Stay tuned for more updates in the weeks ahead.

Please welcome new author and GSB attorney, Julia Holden-Davis, to the Duff on Hospitality blog! She has over 15 years of experience in the legal aspects of design and construction and works out of our new office in Anchorage, Alaska. Welcome, Julia, and thank you for today’s recommendations on selecting an appropriate contractor. – Greg 

Selecting the “right” contractor is one of several key steps in ensuring a hotel project has a strong likelihood of success. At times, the selection of the contractor might seem obvious – for example, a developer entering a new geographical market might bring with it a contractor with whom it already has extensive experience in other markets. However, contractor selection should consider a broader number of criteria, tailored to the particular needs of the project, to maximize the likelihood of success.

1) Pick the right people to make the selection

Consider first with whom to place the responsibility of making the selection, recognizing that within the typical hotel ownership and management structure, not to mention other project participants such as an architect or designer, not everyone has the same priorities, experience, or end goals. For example, one person (e.g. franchisor) might care the most for the aesthetic-related capabilities of a contractor. Another might prioritize timely performance (e.g. operator), yet another lowest cost (e.g. owner/developer). An outside architect may have a relationship (be it good or bad) with certain contractors. Selecting an individual or a team who understands the needs of the facility, the critical points, and the overall goals can lead to a much better evaluation process – and ultimately, identification of the most suitable contractor.

2) Consider industry dialogue

Consider discussing the project or portions of the project with a variety of contractors or other industry professionals before actually evaluating or selecting a contractor. The information gleaned in early discussions can play a significant role in defining realistic expectations, developing innovative ideas, selecting new products, and improving the overall quality of the project. For example, a franchised property whose intended aesthetic is cutting edge, top of the line, with new and fresh ideas may want to carefully consider the use of new materials which may not yet have a proven service record. Similarly, contractors with a depth of building experience with the chosen brand may have good suggestions to the design, phasing, or to other aspects of the project that could improve the overall quality or decrease the time or cost of construction.

In December 2012, the U.S. Department of Justice (DOJ) settled a case with Lesley University, requiring Lesley University to take significant, comprehensive measures to accommodate the needs of students with serious food allergies. Details on the settlement can be found here. DOJ took the position that food allergies may constitute a disability under the ADA, and that the many steps required in the settlement were mandated by the ADA’s requirement that public accommodations make reasonable modifications to their policies, practices, and procedures that are necessary to ensure that individuals with disabilities have access to their goods and services.

However, the ADA does not require a public accommodation to engage in any measures that would “fundamentally alter the nature of the goods, services, facilities, privileges, advantages, or accommodations” offered.  Perhaps Lesley University could have relied on that defense if it had litigated, rather than settled with DOJ, but it is impossible to predict what the outcome would have been and no one can blame Lesley University for declining to find out.

The DOJ – Lesley University settlement has had many of us worrying that restaurants are already or will soon be in DOJ’s sights for examination of allergy-free items and allergen-free facilities. While we are still concerned about the potential impacts of the DOJ - Lesley University settlement, we have not yet seen evidence of increased investigations by the DOJ. Even more encouraging, a technical assistance document released by the DOJ after the settlement with Lesley University gives some hope that DOJ is taking a reasonable approach that is consistent with the ADA. The technical assistance document confirms that “a restaurant may have to take some reasonable steps to accommodate individuals with” food allergies, such as “omitting or substituting certain ingredients upon request if the restaurant normally does this for other customers.” However, DOJ confirmed that the ADA does not require restaurants to change their menus to offer gluten or allergen-free foods. DOJ also emphasized that Lesley University’s situation was unique because it involved mandatory meal plans.

We will continue to monitor this issue along with other ADA public accommodation issues, but for the moment we wanted to pass along some good news on this issue.

Please contact me if you have any questions.