Reading the Fine Print: Changes in Legal Framework for the Assessment and Display of Service Charges

Receipt in folder Business Shopping Bill PaymentService charges, administrative charges, surcharges, house fees—whatever you call those charges assessed for food and beverage service in restaurants and in hotels—the rules about how they need to be disclosed to guests and how they must be allocated are propagating. More and more cities, municipalities and other local legal bodies are taking on service charges in detailed laws, and we expect more to come.

Interest in this issue at all levels of lawmaking seems to be increasing as living wage/minimum wage raise efforts become more and more popular throughout the country. Many such efforts result in laws that also affect how service charges may be collected, distributed and how they must be disclosed to consumers. In other words, the locus for relevant law in this area has shifted significantly from the state to the county or city level.

For example, over the last couple years, the California cities of Emeryville, Los Angeles, Oakland and Santa Monica have each addressed service charges, either generally or in hotel-specific ordinances. An amendment to a New York state labor law, effective in 2011, included a requirement that all disclosures about service charges be in 12-point font that was stuck between a rebuttable presumption that a service charge is a gratuity and how to handle tips paid with credit cards.

It’s a good idea to keep an eye on legislative efforts to raise the minimum wage across the country because, as mentioned, sometimes other important things are added when the relevant laws are passed. We are developing resources to keep track of all these various and sundry city, county and state changes in this area and encourage all hospitality industry members to do the same.

When It Comes to Liability, Whose User Generated Content Is It Anyway?

Hospitality industry stakeholders who host sites for online reviews or rely on review sites such as Yelp, Trip Advisor, Urban Spoon, or Oyster, may take comfort in the recent Ninth Circuit decision regarding the liability of the publishers of those reviews. See Kimzey v. Yelp! Inc., No. 2:13-cv-01734 (U.S.D.C. Wash. Sept. 12, 2016). But, there is an argument to be made that the protections afforded under Section 230 of the Communications Decency Act (“CDA”) may be wearing thin. As the industry looks for more ways to leverage data harvested  from online reviews, it is slipping out from the protective umbrella afforded to “passive hosts” of user generated content.

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Initiative I-124: Look Beyond the Title

On Monday, July 25, 2016, the Seattle City Council unanimously voted to place Initiative 124 (“I-124”), entitled the “Seattle Hotel Employees Health and Safety Initiative,” on the November 2016 ballot. Many voters will likely not even bother to look beyond the title before casting their vote. But they should. There is much more to this initiative than the title suggests.

I-124 is comprised of five substantive parts, plus definitions and a “miscellaneous” section (containing perhaps the most important piece of the entire initiative – more on that in the following paragraph). Each of these parts has an admirable statement of purpose (e.g., “Protecting Hotel Employees from Violent Assault and Sexual Harassment”), and a slew of requirements that are allegedly aimed at achieving that purpose. But, as with the title of the entire initiative, each part contains language that prompts countervailing concerns.

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Brexit Fallout: Why Brand Owners Should Consider Proactive Trademark Filings in the UK

Julianne Henley is a guest author and a member of GSB’s Cannabis, Hospitality, Travel and Tourism, and Intellectual Property Practice Group. You can reach Julianne at or at 206.816.1375.

Brexit, the United Kingdom’s (UK) decision to leave the European Union (EU), is headline news. Brexit is already impacting trademark rights in Europe, including in the hospitality industry.

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FDA’s Final Guidance on Menu-Labeling Regulations and What It Means to Hotel Owners and Operators

Regular readers of this blog will know that we have been following the development and implementation of the FDA’s new menu-labeling regulations with some interest. After multiple rounds of drafts and public comment periods, the agency now has issued its final guidance for compliance with the new rules. According to the FDA’s press release, the guidance is intended to respond to the most frequently-asked questions from business potentially subject to the new rules, and “differs from the draft guidance by providing additional examples and new or revised questions and answers on topics such as covered establishments, alcoholic beverages, catered events, mobile vendors, grab-and-go items, and record keeping requirements.”

Nevertheless, the final guidance does not appear to substantively change the prior drafts insofar as the hospitality industry is concerned. Perhaps most noteworthy to hotel owners and operators is that the FDA has maintained the position, described in the earlier draft guidance, that a hotel’s complimentary breakfast would not be considered food offered for sale and thus would not be subject to the menu-labeling requirements.

As before, that guidance comes with the caveat that it merely reflects the “current thinking” of the FDA and does not establish binding rights or duties. Thus, while the guidance may be called “final,” the agency’s “current thinking” could always shift as the regulations – which are set to take effect in May 2017 – begin to be enforced.  Which might lead one to wonder, what’s in a label, anyway? Only time will tell.

Tipping the Scales: Restaurants’ “Service-Included” Trend Is Not for Everyone

One big trend in the restaurant industry is no-tipping policies, replacing the optional gratuity line on the bill with a “service included” mandatory charge or higher menu prices. After a number of successful restaurants having tried and failed to transition successfully to this model, the service-included model is not necessarily the future of the industry.

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Pacific Northwest Chapter: May Education Program

The PCMA Pacific Northwest Chapter’s May education program was held on May 18, 2016 at the Metropolist in Seattle, Washington.  For those of you who attended, or did not attend the program, my presentation, “The Evolution of Contract Negotiations” is available below. The presentation covers a number of current hospitality group sales contracting issues, including some thoughts on the future of the group travel segment.  A huge thanks to the PCMA Northwest Chapter for inviting me to attend.

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The Wait Is Over – The New Overtime Rules Are Here: The Reconfiguration of Your Compensation System Is Just Beginning

Old computer clocking inThe good news is the long awaited rule on overtime has arrived – finally. The proposed rule goes into effect on December 1, 2016. The quick summary is the changes aren’t quite as bad as everyone feared. The long summary is below. We have broken out the rules into specific talking points to try and make them easier to digest. This does not erase the entire prospect of heartburn, however. The Department of Labor has also developed a page of Questions and Answers on the new rule, which includes a comparison between the old rule and the new rule.

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Can SafeHer, a Women-For-Women Ridesharing Company, Overcome the Challenges of Anti-Discrimination Laws?

Despite lawsuits and persistent legal uncertainties, the “sharing economy” is booming, and the companies at its forefront continue to grow.  Some of these businesses are a natural complement to the hotel industry, while others directly compete with it.  Whatever may become of these companies as they are reined in by regulation, one thing is certain: the rise or fall of the “sharing economy” will define the landscape of the hospitality sector in the decades ahead.

Ridesharing giant Uber raised $2.1 billion in its most recent round of funding, buoyed by a valuation of more than $65 billion – a remarkable ascendance for the five-year-old company.  Its success has attracted a wave of new entrants seeking to gain a foothold in this burgeoning market.  But the road to a share of the sharing economy is fraught with legal peril.

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2016 Hospitality Upgrade’s Executive Vendor Summit

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.