We published an article in Club Director, titled “Harassment and the #MeToo Movement in the Private Club Industry.” Following is an excerpt:

The recent heightened awareness to sexual harassment issues affects a wide range of industries, and has prompted employers to consider ways to get ahead of the problem. In order to reduce the risk of such complaints, private clubs may take a number of proactive steps.

Anti-Harassment Policy: Clubs should develop a zero-tolerance policy against harassment that includes, at a minimum, the following elements:

  • Expressly prohibit any sexually harassing or inappropriate behavior by staff or members toward employees, guests, members or patrons.
  • Define sexual harassment, making clear that it includes inappropriate relations, touching, and communication (i.e., emails, phone calls, text messages, or messages through social media).
  • Firmly state that any individual (staff or members) found to have engaged in sexually harassing behavior will be subject to discipline and/or immediate dismissal or expulsion.

Click here to download the full version in PDF format.

Our colleagues Jeffrey H. Ruzal, Adriana S. Kosovych, and Judah L. Rosenblatt, attorneys in the Employment, Labor & Workforce Management practice, co-authored an article in Club Director, titled “Recent Trends in State and Local Wage and Hour Laws.”

Following is an excerpt:

As the U.S. Department of Labor (DOL) appears to have relaxed its employee protective policy-making and enforcement efforts that grew during the Obama administration, increasingly states and localities have enacted their own, often more protective, employee-protective laws, rules and regulations. To ensure full wage and hour compliance, private clubs should consult their HR specialists and employment counsel and be mindful of all state and local requirements in each jurisdiction in which they operate and employ workers. Here are just some of the recent wage and hour requirements that have gained popularity among multiple jurisdictions.

Click here to download the full version in PDF format.

So far, 2018 has brought an increasing number of labor and employment rules and regulations. To help you stay up to date, we are pleased to introduce the Employment, Labor & Workforce Management Webinar Series.

Epstein Becker Green’s Hospitality service team took a deeper dive into our recently released Take 5 during the first webinar. Topics discussed include:

  • Additional measures to protect lesbian, gay, bisexual, and transgender employees in the hospitality workplace
  • Compliance training in the hospitality workplace
  • Transactional due diligence, including labor relations issues
  • The risk of self-reporting overtime and minimum wage violations under the Payroll Audit Independent Determination (PAID) program

Watch a recording of the webinar video here and download the webinar presentation slides.

The first quarter of 2018 has already stirred up an array of legal matters that employers in the hospitality industry should be conscious of, both in their day-to-day operations and long-term planning. In February alone, the U.S. House of Representatives passed legislation to curb lawsuits focused on the inaccessibility of brick-and-mortar business establishments and a federal appeals court ruled that discrimination based on sexual orientation violates Title VII of the Civil Rights Act of 1964 (“Title VII”). Earlier this month, the U.S. Department of Labor announced a pilot program that will allow employers to avoid potential penalties for overtime and minimum wage violations. In addition, the #MeToo movement continues to be top of mind across all industries, and hospitality employers should be vigilant in their training and employee awareness efforts. Due diligence in change-of-ownership transactions should include labor relations issues, especially with unionized employees.

This edition of Epstein Becker Green’s Take 5 addresses important and evolving issues confronting employers in the hospitality industry:

  1. Will Congress Slam the Breaks on ADA “Drive By” Lawsuits?
  2. Expanding Sex Discrimination Protection to LGBT Employees in the Hospitality Industry
  3. Effective Compliance Training in the Hospitality Industry in the Wake of #MeToo
  4. Transactional Due Diligence Should Include Labor Relations Issues
  5. Voluntary PAID Program Permits Employers to Escape Potential High Penalties for Self-Reported FLSA Violations—but at What Risk?

Read the full Take 5 online or download the PDF.

Our colleagues , at Epstein Becker Green, have a post on the Wage and Hour Defense Blog that will be of interest to many of our readers in the hospitality industry: “Initial Discovery Guidelines May Fast-Track Early Disclosure Requirements in Individual FLSA Cases.”

Following is an excerpt:

Depending on the jurisdictions within which they operate, certain employers and their counsel will soon see a significant change in early mandatory discovery requirements in individual wage-hour cases brought under the Fair Labor Standards Act (“FLSA”).

A new set of initial discovery protocols recently published by the Federal Judicial Center (“FJC”), entitled Initial Discovery Protocols For Fair Labor Standards Act Cases Not Pleaded As Collective Actions (“FLSA Protocols”), available here, expands a party’s initial disclosure requirements to include additional documents and information relevant to FLSA cases. These Protocols apply, however, only to FLSA lawsuits that have been filed in participating courts that have implemented the Protocols by local rule or by standing, general, or individual case order. …

Read the full post here.

Employers often struggle to provide employees with their requested accommodations and to comply with disability laws while still effectively running their business. This struggle has been compounded with the Equal Employment Opportunity Commission’s aggressive pursuit of litigation in this area in recent years.  A New York federal court recently weighed in on the issue in Kelly v. Starwood Hotels & Resorts Worldwide, Inc., 15 Civ. 6309 (DLC), 2017 U.S. Dist. LEXIS 43485 (S.D.N.Y. Mar. 24, 2017), holding that an employer is only required to provide an employee with a “plainly reasonable” accommodation, not the employee’s requested accommodation.

In Kelly, the plaintiff, a service express agent (“agent”) at the Westin Hotel, alleged that Starwood failed to provide her with reasonable accommodations for her disabilities in violation of the Americans with Disabilities Act (“ADA”) and the New York City Human Rights Law (“NYCHRL”).  Agents at the Westin are staffed 24 hours a day across three shifts, morning, afternoon and overnight, and are responsible for answering hotel guest phone calls, and facilitating guest services such as wake up calls and room service.  The shifts are generally determined by seniority pursuant to the collective bargaining agreement but are subject to change depending on the hotel’s staffing needs.

In December 2014, the plaintiff provided Starwood with a doctor’s note indicating that she had been diagnosed with hypertension, hyperthyroidism, osteoarthritis, chronic elbow pain and cardiac arrhythmia, and recommending that the plaintiff avoid working long hours and night shifts, which could exacerbate her condition. The plaintiff requested that Starwood accommodate her by not assigning her to work double shifts or overnight shifts.  Starwood denied the requested accommodation because granting that request would have violated the seniority system dictated by the collective bargaining agreement.  Starwood proposed alternative accommodations that it would make for the plaintiff, including: (1) she would not be required to work double shifts; (2) when she was scheduled to work overnight, Starwood would post a sign-up sheet to allow other employees to volunteer to switch shifts with the plaintiff; and (3) when the plaintiff was unable to switch out of an overnight shift, Starwood would allow her to use paid time off, sick leave or leave pursuant to the Family and Medical Leave Act of 1993 (“FMLA”), with the assurance that she would not be disciplined for doing so.

Despite the fact that the plaintiff did not work a double shift or overnight shift after she requested an accommodation, she nevertheless argued that Starwood violated Federal and City disability laws because it did not provide her with the specific accommodation she had requested. Specifically, the plaintiff maintained that Starwood should have either refrained from assigning her any overnight shifts or should have offered other agents overtime pay as an incentive to take her assigned overnight shifts.

The Court disagreed. In granting Starwood’s motion for summary judgment and dismissing the Complaint, the Court held that “[h]aving offered a plainly reasonable set of accommodations to [the plaintiff], Starwood is not required to do more.”  Even under NYCHRL’s more liberal standard, the Court held that Starwood was not required to provide the plaintiff with the specific accommodation that she requested, but rather any “reasonable accommodation,” which it had done; the Court found that the accommodations offered by Starwood in not assigning the plaintiff to double shifts, and affording her opportunities to avoid working overnight shifts, were reasonable.  Additionally, the Court noted that the plaintiff was unable to identify any essential functions, benefits or privileges of employment from which she was excluded.  On the contrary, the Court held that the accommodations that Starwood offered the plaintiff allowed her to “satisfy the essential requisites of a job” and “to enjoy the right or rights associated with the position.”

Employers defending the reasonableness and sufficiency of an accommodation presented to an employee should take heed of the Court’s analysis in Kelly.  An accommodation need not be the employee’s preferred accommodation.  Rather, an accommodation will meet the statutory requirements so long as it provides the employee with the ability to perform the essential functions of the job, while also enjoying full and equal benefits and privileges of employment.

Chipotle recently obtained decertification of a conditionally certified collective action of salaried “apprentices” under Section 216(b) of the Fair Labor Standards Act (“FLSA”) in Scott et al. v. Chipotle Mexican Grill, Inc. et al., Case No. 12-CV-8333 (S.D.N.Y. Mar. 29, 2017), a case in New York federal court involving claims of unpaid overtime based on misclassification.  In that case, Chipotle effectively leveraged disparities between the job duties and activities of putative class and collective action members across six states to show that they were not similarly situated.

Chipotle could not repeat its success in a more recent FLSA collective action brought by plaintiff employees and former employees filed in Minnesota federal court. In Harris et al. v. Chipotle Mexican Grill, Inc., Case No. 13-CV-1719 (D. Minn. June 12, 2017), hourly employees who worked in Chipotle’s Crystal, Minnesota restaurant asserted claims for unpaid wages and overtime under the FLSA and Minnesota law.  The Minnesota federal court found that the named and opt-in plaintiffs were similarly situated for purposes of pursing their claims in an FLSA collective action, and denied Chipotle’s motion to decertify.

In Harris, five named plaintiffs holding various hourly positions – including crew member, kitchen manager and service manager – claimed that Chipotle had a company-wide unwritten policy of requiring hourly employees to work “off the clock” without pay.  Specifically, the plaintiffs alleged that after the restaurant stopped serving the public and the closing shift ended, employees were required to clock out and continue working until the restaurant was fully cleaned and all work was completed.  Chipotle’s timekeeping system also reset at a certain time each night, automatically clocking out any employee who had not already done so.  These unwritten policies, the plaintiffs alleged, resulted in hours of unpaid work time each week.

Early on in the Harris litigation, the court conditionally certified as a collective employees at Chipotle’s Crystal, Minnesota restaurant who either (1) were automatically punched off the clock by the timekeeping system and continued to work, or (2) otherwise worked “off the clock” during closing shifts, resulting in non-payment of regular wages or overtime wages.  Twenty-three opt-in plaintiffs subsequently filed a consent to join the collective action.

Chipotle argued in its recent motion to decertify that the only “superficial common thread” binding the putative collective action members was the location of the restaurant at which they worked, and that the alleged unpaid after-hours work stemmed from scattered and unrelated causes, rather than a common policy (i.e., managerial directive versus automatic clock-out, among other reasons).  Disagreeing with Chipotle’s argument, the court pointed out that the FLSA collective it had conditionally certified encompassed both types of off-the-clock work, and noted that the collective was “limited to a single store, a single shift, and to a relatively small number of plaintiffs who worked in generally three positions (crew member, kitchen manager, and service manager), for a limited number of general managers and apprentice managers.”  The court also rejected Chipotle’s contention that the alleged FLSA violations were attributable to different types of work for varying amounts of time.  To the contrary, the court held, the collective action members at issue performed the same duties in one restaurant:  cleaning, counting money, prepping food, locking up, and attending meetings. Viewing the facts in this context, the court held that decertification was not appropriate.

The court further found that Chipotle’s assertion of individualized defenses against certain named and opt-in plaintiffs similarly did not warrant decertification, including the following: (1) lack of notice to Chipotle of any work performed after an automatic clock out due to the timekeeping system’s nightly reset; (2) lack of evidence that managers issued directives to work off-the-clock; (3) certain types of activities allegedly performed by the plaintiffs did not constitute compensable work; (4) work allegedly performed off-the-clock was de minimis and therefore not compensable; (5) employees failed to utilize Chipotle’s procedures for accurately recording hours or remedying errors in recorded work time; and (6) criminal history of certain plaintiffs affecting their credibility.  The court held that each of these defenses went to the merits of the plaintiffs’ claims and did not weigh in favor of decertification.

Based on the lack of discernible differences among the named and opt-in plaintiffs, the court found that the issues in the case were appropriate for classwide resolution and that a collective action would serve the interests of judicial economy and more efficiently resolve the plaintiffs’ claims.

* * *

The Harris decision highlights the types of issues owners/operators in the hospitality industry face when defending against collective actions under the FLSA, even those in which the universe of putative plaintiffs may be small or limited to one or two locations.  Minor nuances in the nature of work performed, variety in the reason for the work, and individualized defenses that go to the merits of the claims at issue may not be sufficient to decertify a collective action.  In seeking to obtain decertification, owners/operators should emphasize as many disparities as possible in the policies and practices governing work time and timekeeping that may result in differences that would prevent a putative collective group of employees from being considered a similarly situated class.

A New York federal court recently declined to certify under Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”) six classes of salaried “apprentices” at Chipotle restaurants asserting claims for overtime pay under New York Labor Law (“NYLL”) and parallel state laws in Missouri, Colorado, Washington, Illinois, and North Carolina, on the theory that they were misclassified as exempt executives in Scott et al. v. Chipotle Mexican Grill, Inc. et al., Case No. 12-CV-8333 (S.D.N.Y. Mar. 29, 2017).  The Court also granted Chipotle’s motion to decertify the plaintiffs’ conditionally certified collective action under Section 216(b) of the Fair Labor Standards Act (“FLSA”), resulting in the dismissal without prejudice of the claims of 516 plaintiffs who had opted in since June 2013.

The putative class and collective action of apprentices working in certain of Chipotle’s 2,000-plus restaurants nationwide were provisionally employed while being trained to become general managers of new Chipotle locations. The Scott action challenged Chipotle’s blanket exempt classification of the apprentice position, claiming that the duties plaintiffs actually performed during the majority of their working time were not managerial, and therefore, as non-exempt employees they were entitled to receive overtime pay.

According to their motion papers, the named plaintiffs’ work experience was common to all apprentices in each of the six state-specific classes they sought to certify. While the Court acknowledged that certain factors supported class and collective treatment of plaintiffs’ claims – such as a singular job description and corporate policies that applied nationwide and Chipotle’s classification of all apprentices as exempt – a number of factors impacting apprentices’ daily activities rendered a class and collective action certification of plaintiffs’ state and federal wage and hour claims inappropriate.

Denial of Rule 23 Class Certification

Applying Rule 23(a), the Court held that there was commonality and typicality among the plaintiffs and their claims. First, the question of whether apprentices were misclassified could be answered with common proof, particularly as Chipotle uniformly classified all apprentices as exempt, used a company-wide job description, and expected that their core duties would be the same regardless of the market in which the apprentice worked. The predominance requirement was also satisfied because the plaintiffs’ claims were based on the same legal theory and factual predicates, i.e., that Chipotle misclassified apprentices, depriving them of overtime pay to which they would otherwise be entitled.  The parties did not dispute the numerosity and adequate representation prongs of Rule 23(a) were met.

Rampant differences among the named plaintiffs and the opt-in plaintiffs led the Court to conclude that plaintiffs could not satisfy the predominance and superiority requirements of Rule 23(b). For example, of the six named plaintiffs, no two had like experiences in terms of what managerial duties they performed and how frequently they performed other non-exempt tasks on a daily basis.  The testimony of the opt-in plaintiffs also “rang dissonantly from the record” when it came to their performance of managerial tasks.  Factors like store structure, sales volume, staff size and managerial style affected the amount of time apprentices spent making personnel decisions, scheduling, supervising, and training, resulting in wide divergence among opt-in plaintiffs across the country.

The Court found that these differences were fatal to plaintiffs’ motion for class certification because: (1) plaintiff’s entitlement to relief would require individualized proof; and (2) the significant variation between the state laws under which the plaintiffs’ claims were brought would effectively require the court to conduct numerous “mini-trials” to determine whether Chipotle misclassified each individual apprentice as exempt. The Court therefore denied the motion for class certification under Rule 23.

Section 216(b) Decertification of Collective Action

Turning to Chipotle’s motion to decertify the FLSA collective action, the Court drew on its comparison of the named plaintiffs and opt-ins and concluded that apprentices had “vastly different” levels and amounts of authority in exercising managerial tasks. According to the Court, such disparities in job duties “seem[ed] axiomatic” given that the 516 opt-in plaintiffs worked in 37 states across Chipotle’s nine geographic regions.  In light of such differences, it would be difficult for Chipotle to rely on representative proof while asserting its defenses based on the “executive” and “administrative” exemptions from overtime pay.  For these reasons, the Court granted Chipotle’s motion to decertify the conditional collective action.

As shown in Scott, the question of whether misclassification claims may be certified to proceed on a class and collective action basis under Rule 23 and Section 216(b) will not be answered definitively by generic job classifications and/or job descriptions.  Rather, courts will assess the individualized work experiences of the named plaintiffs and opt-ins to determine whether generalized proof will be conducive to a class-wide resolution of those claims.  Employers and practitioners defending against such motions should focus their opposition on identifying differences and variation among the named plaintiffs and opt-in plaintiffs, and using outliers to highlight divergence among individual plaintiffs.  Otherwise, a court could find that the proposed class is homogeneous enough to warrant class and collective action certification.

A Full Menu of Potential Legal Issues for Hospitality Owner/OperatorsIn the new issue of Take 5, our colleagues examine important and evolving issues confronting owners, operators, and employers in the hospitality industry:

Read the full Take 5 online or download the PDF.