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Duff on Hospitality Law

Does Your Employee Have a New Social Security Number? How to Comply with Form I-9 Requirements

Posted in Employment Law

Gregg Rodgers chairs GSB’s Immigration Practice Group and is a member of our Hospitality, Travel & Tourism practice team.  His post today provides important steps to take when employers are faced with an employee with a new SSN or Employment Authorization Document.  Thank you, Gregg! – Greg

How would you respond if a valued, long-time employee notified you that she has a new social security number (SSN) and/or an Employment Authorization Document (EAD) that includes different information about her than in your current records?  This happens for hotel and restaurant employees more often than you may realize.  Being ready to act quickly, and legally, can be important for you, the employee, labor relations (if in a collective bargaining situation) and your business.

The first question that many employers want to ask is, “Why did your number change?”  The employee may voluntarily provide that information without you asking.  But do you want or need to know, and can you believe whatever explanation is provided?  The safer course of action is to proceed with a protocol that you can apply uniformly in all situations.

What could be the reason for assignment of a “new” social security number?

There are few situations in which the Social Security Administration (SSA) will change someone’s legitimate SSN, including witness protection, domestic violence issues, the correction of an SSA error in which it assigned the same number to multiple individuals, or because of identity theft.  But otherwise, the most common reason to report a changed SSN to an employer is because the person has only recently become legally authorized to work and the number previously used was not legitimate.

President Obama’s Executive Actions in mid-2012 and again in late 2014 have made it possible for certain people who came to the U.S. without documentation as children, or for certain undocumented parents of U.S. citizens or Lawful Permanent Residents, to be issued time-limited EADs, which have allowed them to be issued legitimate SSNs.  Those eligible for consideration under these programs, called Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA), are the most likely to present themselves to you.  (As we go to “press,” Congress is already taking aim at eliminating both DACA and DAPA.  I will have more to say about the effects of the President’s 2014 Executive Action regarding employment-based immigration in a future blog entry.)

Long-term hotel and restaurant employees may appear to be more affected by DACA and DAPA than in many other industries.  This may be because these individuals have had little opportunity or motive to move from job to job, even in the highly mobile service industry, because of concern that Form I-9 procedures could result in a new employer’s discovery of the lack of official documentation or employment authorization.  For many affected by DACA and DAPA, job security has been more important than mobility.

Should I discipline the employee?  Am I required to discipline the employee?

What if you become aware of the fact that the SSN you have previously associated with this employee was not that person’s legally assigned SSN?  This would certainly be the case for a DACA or DAPA set of facts.  This could be considered falsification of business records or a violation of a company’s “honesty in the business” policies.

As a business, you have a couple of choices, based your policy/ies, collective bargaining agreement (if the employee is represented by a union), and/or history of action in similar circumstances.  You must be sure that, whatever you do, it does not result in disparate treatment involving any legally or contractually protected status.  Make sure that proper protocols are followed for any investigation or action taken.  If the employee is represented by a union, proper protocols should include reviewing the discipline-related articles of the collective bargaining agreement to ensure compliance, and providing representation for the employee if requested and required.

Assuming it is determined that the employee had purposely provided false information, taking disciplinary up to and including dismissal may be appropriate, considering other cases with that employer, the employer’s policy regarding honesty in the business, collective bargaining agreements, and status in any protected class.

Many employers confronted with DACA or DAPA cases are unwilling to dismiss a valued worker in this situation.  Taking disciplinary action, or taking no disciplinary action, is not mandated by the government.  However, you should be sure that whatever choice is made, it is not illegally discriminatory or in violation of a collective bargaining agreement.

How do I comply with Form I-9 Requirements?

The underlying basis of the presentation of a new SSN, or an EAD (which is likely to be accompanied by reference to a new SSN) may be of no real interest to you.  Assuming you decide to continue her employment, your focus should be on what to do with the new information, which involves the Employment Eligibility Verification form; the Form I-9.

Assuming she was hired after November 6, 1986, when the Form I-9 came into existence, and the employer has a Form I-9 for her, you need to fully verify her employment authorization.  This may allow an opportunity to run this new information through E-Verify if you are registered.

The government has prepared a helpful resource document related to DACA cases, but which is also applicable to DAPA cases and cases in which you have been advised that a new SSN has been issued.  You will see that the focus is clearly on the objective information presented, not the mystery behind it.

Your focus is on having a properly completed Form I-9 on file. 

If the information presented presents a change to any of the information in Section 1 of the previously completed Form I-9, such as name, date of birth, attestation, or SSN (which is not always required in Section 1), she and you should complete a new Form I-9, using the original date of hire, and attaching it to the previously completed Form I-9.  This applies in either situation, in which only an SSN change has been reported or an EAD has been presented.  Of course, as a part of this process, you must examine and record information from the original document(s) presented to complete Section 2 and, if your policy is to always copy documents presented, to do so.  Employers who participate in E-Verify should verify the new Form I-9 information through E-Verify.

If the information presented requires no change to any information in Section 1 of the previously completed Form I-9, such as if no SSN had been noted and no attestation change is required, you may complete Section 3 of the previously completed Form I-9 if the version used for the previous verification is still valid for use as of the current date.  If Section 3 of the previously completed Form I-9 has already been completed, or if the previously completed Form I-9 is not currently valid for use, you should complete Section 3 of a new Form I-9, being sure to write the employee’s name at the top of Section 2.  Attach any newly completed Form I-9 to the previously completed Form I-9.  This situation does not require or authorize a new E-Verify check.

In all cases, be sure to examine the original documentation.  You must certify that you have done so, and that the documentation appears to be genuine and relates to the employee presenting it.

The employee may choose which documents to present, either List A, or List B and List C.  In only very limited circumstances may you legally suggest to the employee what documentation to present for Form I-9 purposes.  Rather, provide the employee with the List of Acceptable Documents included with the Form I-9 and let the employee choose what to present to you.  An employee who has a “new” SSN may choose to present an EAD as a List A document and is not necessarily required to present an SSN card as a List C document.

  • In all cases, be sure to record the document title, document number, and its expiration date (if any).
  • In all cases, be sure to sign and date the Form I-9 in the appropriate space.
  • Remember to reverify the employee’s documentation by the date the validity period of a List A document expires, except for passports or Lawful Permanent Resident cards.  Never reverify List B documents.

I also suggest that you consider preparing a memo to the file, also to be clipped to the Form I-9, explaining what happened and when, signing and dating that.  This will allow an auditor to consider this, potentially years from now when none of the parties may be available to explain it, to understand exactly why this action took place.

Forms I-9 and related attachments must be retained for at least three years after the date of hire or one year after the date the individual’s employment is terminated, whichever is later.

What to do?

It is important to recognize that an employee’s presentation of the kind of information referenced here is a very serious matter in that employee’s life.  Emotions can be high for that employee, co-workers, representatives, and yes, even you.  Like anything you do in your job, planning for your response to a situation like this, and responding in a manner that can be seen as fair and reasonable can go a long way toward maintaining good employee relations and legal compliance.

If you have any questions about I-9 compliance, please call me or Gregg.

FCC Update: FCC Will “Aggressively” Investigate and Take Action Against Illegal Blockage of Wi-Fi Hot Spots

Posted in Hotels, Wi-Fi hotspots

Any uncertainty regarding the FCC’s position on hotels’ interference with Wi-Fi hot spots was answered yesterday.  In its January 27, 2015 Enforcement Advisory, the FCC spoke directly to the “disturbing trend” of hotels and other commercial establishments that block personal Wi-Fi hot spots.  Colin Andrews, member of our Communications practice team in Washington, D.C., brings us the latest development in Wi-Fi blocking practices.  Thank you, Colin!  - Greg

Yesterday’s Advisory stated that any “willful or malicious” interference with guests’ personal hot spots is a violation of Section 333 of the Communications Act, which prohibits any person from interfering with any radio communications equipment licensed or authorized by the Act.

The FCC’s Advisory expanded upon a recent Consent Decree between the FCC and Marriott International, Inc. which resulted from a complaint to the FCC filed by a Marriott customer.  In the Consent Decree, the FCC concluded that Marriott had deliberately blocked its guest hot spots in order to require guests to pay for the hotel’s Wi-Fi.  Marriott entered into a three-year compliance program and agreed to pay $600,000 to settle the case.  A discussion of the Marriott Consent Decree can be found in our blog’s archives here.

Yesterday’s FCC Advisory is based upon similar complaints received in response to the Marriott settlement.  The Advisory commits the FCC to investigate such complaints “aggressively” and to take appropriate action, including “substantial monetary penalties,” against any violators.   The Advisory also encouraged consumers to file Wi-Fi blocking complaints with the FCC.

In a separate statement, FCC Chairman Tom Wheeler directly targeted both Marriott and the hotel industry by declaring that “consumers must get what they pay for… [and] Marriott’s request seeking the FCC’s blessing to block guests’ use of non-Marriott networks is contrary to this basic principle.”  The FCC Chairman was referring to a still-pending August 25, 2014 Petition for Declaratory Ruling filed by the American Hotel & Lodging Association, Marriott International, Inc. and Ryman Hospitality Properties.  The Petition requested that the FCC “declare that the operation of… authorized equipment by a Wi-Fi operator in managing its network on its premises does not violate [Section 333], even though it may result in ‘interference with or cause interference to’” a guest’s hot spot.

If you have any questions or for more information, please feel free to contact me or Colin.

 

The Bitter Truth: Lagunitas Tastes the Complexity of Trademark Infringement Suits

Posted in Brands and Trademarks

Ruth Walters, member of our Hospitality, Travel and Tourism practice team, focuses on hospitality operations, general intellectual property and technology transactions.  In today’s post, she describes how trademark infringement suits can be tricky at best and the various factors to consider before filing suit.  Thank you for today’s post, Ruth! – Greg

Lagunitas Brewing Company filed a federal trademark infringement lawsuit against rival Sierra Nevada Brewing Company. A mere day or so later, Lagunitas dropped it. In addition to providing some writers the opportunity to make awesome (see above), or groan-worthy puns, the situation is an interesting example of how legal justification and the money to sue are not the only ingredients to consider when policing a brand.

In its complaint, Lagunitas alleged that the label for Sierra Nevada’s new Hop Hunter IPA infringed a family of trademarks owned by Lagunitas representing its own IPA labels. In particular, Lagunitas alleged that the large block letter style in the center of the label used by Sierra Nevada plus the prominence of the term IPA was likely to create consumer confusion as to the affiliation of Sierra Nevada with Lagunitas with regard to this particular beer. Pictures of the labels can be found here or here, for example.  It’s possible Lagunitas would have won the suit, but as soon as the public got wind of what was brewing, trouble began fermenting and Lagunita’s founder tweeted that he was dropping it.

This subreddit post and comments provide some interesting discussion of past, similar lawsuits and the tone is generally negative or mocking (and also contains some NSFW words). While the craft brew industry has been exploding since the 70s, it seems from the backlash against Lagunitas that at least some of its members and consumers believe the industry should behave like a small artisan’s guild where mutual adoration of the product and commitment to the craft make legal disputes like this as unseemly as bar brawls.

The reality, of course, is that craft breweries are facing increasing competition in the marketplace and must fight ever harder to distinguish themselves from their competitors. This means working harder and harder to choose distinct brands and to protect them.  Every trademark attorney, including this one, hammers into the heads of his or her clients that a failure to police trademarks can result in a loss of rights, so it is always important to watch the marketplace (and trademark registries) for potential infringers.

And yet, deciding whether to proceed with a demand letter or lawsuit is always risky and not just because litigation costs money and is uncertain. Non-legal considerations, like customers’ perception of the brand and its market position, public relations issues and other very fuzzy (fizzy?) factors might influence a trademark (or copyright) owner to let matters lie or even help them come up with more creative solutions to the issue.  Like Linden Lab did back in 2007 when Darren Barefoot made a parody of their MMORPG Second Life (here’s an archived copy of GetAFirstLife.com, with the link inviting a cease and desist letter at the bottom and some content about bodily functions).  A legal parody using other’s trademarks and copyrighted material is difficult to achieve; this all could have gone a very different way.

None of this is to say that Lagunitas’ suit was frivolous and merely intended to intimidate Sierra Nevada or the rest of the industry, or to do else that might be called “brand name bullying,” nor that what is perceived as bullying is, in fact, bullying and not protection of one’s property. It is simply to point out that the benefit of taking legal action in intellectual property matters, even with perfect justification, may pale in comparison to how taking that action may be perceived by the folks on whom the business’ existence relies—its customers.

If you have any questions or for more information regarding trademarks, please feel free to contact me or Ruth, directly.

US Trademark Office Reduces Fees in 2015!

Posted in Brands and Trademarks, Hotels

Do you need to register or renew your trademark?  Claire Hawkins, Chair of our Intellectual Property Practice group and member of our Hospitality, Travel and Tourism practice team, shares the good news of reduced application fees being offered by the US Trademark Office in 2015.  Thank you for today’s post, Claire! – Greg  

If you’ve waited until 2015 to register or renew your trademark, you are in luck: this year it will be $50 cheaper to file a trademark application and $100 less expensive to renew a trademark registration with the US Trademark Office, which is great news for all hospitality businesses looking to build, refine, or maintain their US trademark portfolios.

In the December 16, 2014 issue of the Federal Register, the PTO issued Final Rules reducing fees for trademark applications and renewals. The purpose of the new rules is to increase end-to-end electronic processing, to encourage electronic communications, and promote efficiency. The changes go into effect on January 17, 2015.

According to the PTO the reduction is possible due to efficiencies that have allowed the PTO to create an operating reserve and that the revised fee structure maintains a reserve sufficient to manage operations and address long-term investments. The changes will also help to continue with an appropriate and sustainable funding model; support strategic objectives relating to online filing, electronic file management, and workflow; and improve efficiency for operations and customers.

The fee reductions are applicable if a trademark application or renewal for the Principal or Supplemental Register is filed using the Trademark Electronic Application System (“TEAS”). In addition, applicants must authorize email communication and file specified documents electronically throughout the application process. Failure to fulfill the requirements under the new rules will subject the applicant to an additional processing fee of $50.00 per class.

The fee changes are as follows:

  • $275.00 per class, a $50.00 reduction, for filing a new trademark application using the standard TEAS application form. This option will be known as TEAS Reduced Fee (“TEAS RF”).
  • $225.00 per class, a $50.00 reduction, for filing a new TEAS Plus trademark application. A TEAS Plus application is one in which the goods/services description comes directly from the PTO’s Acceptable Identification of Goods and Services Manual.
  • $300.00 per class, a $100.00 reduction, for the renewal of a trademark registration.

As expected, the public comments to the proposed changes supported the fee reductions. The changes are seen as good news for small businesses and individuals who saw the fees as a barrier to trademark registration. In addition, two commenters suggested increasing fees for filing paper applications; however, the PTO advised that there are no current plans to increase any filing fee.

If you have questions about trademarks or any other intellectual property, please contact me or Claire.

TripAdvisor Doesn’t Have to Disclose Anonymous Identity of Bad Reviewer Due to Oregon’s Shield Law

Posted in Hotels, Technology

Following up on her previous blog posts,  Hospitality, Travel and Tourism practice team member, Judy Endejan, shares the latest legal developments in the battle over negative on-line reviews.  Thank you, Judy! – Greg 

The latest skirmish between businesses and negative on-line reviewers resulted in a win for TripAdvisor.  On December 30, 2014 an Oregon trial court ruled that Oregon’s Shield Law protects TripAdvisor from having to disclose the true identity of a poster on its on-line reviewing service.  The Ashley Inn, from Lincoln City, sued TripAdvisor reviewer, “12Kelly,” who posted several scathing reviews about the Inn.  The Ashley Inn sought to compel the identity of “12Kelly.”  A Multnomah County circuit judge refused to do so by applying Oregon’s Media Shield Law, ORS 44.520.  That statute protects a reporter from having to disclose the source for information used to prepare a news report.  The court found that the Shield Law protected TripAdvisor because it is a “medium of communication.”  Hence, TripAdvisor did not have to disclose the identity of its “source” – “12Kelly.”

This case is significant because this is one of the first rulings to apply a state media shield law to preclude the identification of an anonymous on-line reviewer.  Traditionally, a shield law protects reporters from compelled disclosure of confidential information or sources in state court.  (There is no federal shield law yet.)  The policy behind a shield law is to further First Amendment goals by protecting the news gathering process, thereby enhancing the free flow of information.  This process can depend upon information from anonymous sources.  Without protection against disclosure, such sources may not come forward with information of great public concern.

As a result of the trial court’s ruling, the Ashley Inn cannot proceed with its defamation case because it cannot discover the party responsible for the alleged defamation in the bad review.  The Inn’s owners contend that 12Kelly’s negative statements were false, because 12Kelly never registered as a hotel guest, based upon what could be learned about him from the on-line reviews.

The Oregon ruling contrasts with one from Virginia currently pending at the Virginia Supreme Court.  That case Yelp!, Inc., v. Hadeed Carpet Cleaning, Inc., is being closely watched because the issue in that case is whether a business owner can unmask an anonymous blogger that posted specific critical reviews of his carpet cleaning company.  However, the Virginia ruling appears based on a Virginia statute, and not upon a shield law.  That Virginia statute requires only that a business prove that a negative review is, or “may be defamatory,” or that it has a legitimate good-faith basis for believing that the review is defamatory in order to learn the identity of the reviewer.  Hadeed Carpet Cleaning presented evidence that could prove that the seven negative reviewers were not actual customers of the carpet cleaners, which the court found could mean that the reviews could be defamatory.

We will report the Virginia Supreme Court ruling once it is handed down, but the Virginia case may be an anomaly because courts seem more inclined to do what it takes to preserve the freedom of on-line reviewers to post comments, as in the recent Oregon decision.

Please contact me or Judy by email if you have any questions.

U.S. Supreme Court Distinguishes Between Donning and Doffing and Waiting in Line

Posted in Employment Law, Food and Beverage, Hotels

Nancy Cooper, member of our Labor and Employment group and Hospitality, Travel and Tourism practice team, discusses how the recent Supreme Court ruling, Integrity Staffing Solutions v. Busk, may impact potential employee wage and hour claims for hourly employees in the future.  Thank you for today’s post, Nancy! – Greg

The Supreme Court ruled recently that employers did not need to pay employees for the time the employees spend waiting to go through a security screening to make sure they were not stealing from the company.  The case is Integrity Staffing Solutions v. Busk.  While many employers applauded this ruling they were also confused because it is initially difficult to determine how going through the security clearance is different than the requirement that you must pay certain employees for the time it takes to change in and out of uniforms or special apparel, also known as donning and doffing time.  This article will explore those differences and attempt to make some sense in the distinctions.

First, the history behind the law.  The Fair Labor Standards Act (FLSA) and its regulations require that employees are paid for all hours worked.  The courts immediately started to broadly interpret this obligation and Congress was concerned about the financial impact on the businesses of the country.  As a result, Congress passed the Portal-to-Portal Act to more clearly define what time was actually considered to be work time.

The portion of the Portal-to-Portal Act that is implicated by this opinion is the portion that discusses what activities before (preliminary) and after (postliminary) must be paid.  Generally, those activities that are preliminary or postliminary to the performance of the principal activities that an employee is hired to perform must be compensated.  “Principal activities” includes all activities which are an “integral and indispensible part of the principal activities.”[1]  In order to be considered an “integral and indispensible” activity, it must be one that is intrinsic to the employee’s duties and one which he cannot dispense if he is to perform his principal activities.

Now that the law and terms have been defined, let’s turn to the facts of the case.  The employees were hired by Integrity Staffing Solutions to work in a warehouse fulfillment center that filled orders for Amazon.  The employees were responsible for receiving an order and picking the items from the proper locations within the warehouse to fulfill the orders.  Integrity Staffing Solutions required the employees to clock out from work and then stand in a line to go through security clearance – essentially a metal detector similar to those at an airport – as they left work for the day.  This allowed Integrity Staffing Solutions to control the loss of merchandise through employee theft.  The lines for these clearances were often long and would take as long as thirty minutes to get through.  The employees sued on the basis this 30 minute wait time was actual work time and they should be paid for waiting in line.  The Supreme Court disagreed.

In order to be paid for such preliminary or postliminary activity the activity must be so related to the employee’s duties that the job could not be performed if the preliminary or postliminary activity did not occur.  The Court decided the focus should not be on whether or not the activity was required by the employer.  Instead, the focus should be whether not the activity was actually tied to the work the employee was hired to perform. For example, employees required to wear protective clothing due to the nature of their work, such as dealing with chemicals used in the battery making process, could not perform the work they were hired to do without putting on the protective clothes.[2]  The same is true of the time that meat packers spend sharpening their knives.[3]

So, what does all this mean to the hospitality industry?  Does it really change the rules on donning and doffing?  The short answer is no, it doesn’t change the rules.  What it does do is make sure that employers really look at the activity and determine just how integral to the job the activity is.  For example, the employer who puts a lot of emphasis on uniforms as a part of the brand (including defining the level and quality of customer service associated with the uniform) may have to pay for the time it takes to don and doff the uniform.  This is true if the employer places a lot of emphasis on the public face of the uniform and the associated internal expectations of customer service created by the identity.  In short, the uniform becomes a part of the job since it defines the customer service portion of the job.

In contrast, a server who wears a uniform simply as a uniform, but not as a part of the customer service brand and standards may not have to be paid for the time spent changing clothes.  The server can still perform the integral functions of the position (serving food and beverages) without the uniform.  It is somewhat removed from the position, unless of course the policies of the employer indicate otherwise as discussed above.

What is the takeaway?  If there is a question about preliminary and postliminary requirements, take the time to look at the relationship between the activity and the job the employee was hired to perform.  Be critical of the situation and candid with yourself as you analyze the situation.  If there is any question, reach out to your legal counsel.  Be sure that you understand the risks and benefits so that you are not facing a potential wage and hour claim.

If you have any questions or for more information regarding this ruling, please feel free to contact me or Nancy, directly.

[1] Steiner v. Mitchell, 350 US 247, 252-253.
[2] Steiner v. Mitchell, 350 US 247, 249, 251.
[3] Mitchell v. King Packing Co., 350 US 260, 262.

Full Disclosure: The Impact of New Food-Labeling Regulations

Posted in FDA, Food and Beverage, Update

What is the impact of the FDA’s New Food-Labeling Regulations?  The new rules cover any restaurant or “retail food establishment” selling “restaurant-type food.”  Does that include the wide array of retail and hospitality businesses, including bakeries, cafeterias, coffee shops, convenience stores?  Dan Vecchio, a litigator in our Seattle office, has been watching the latest developments.  As our guest author today, Dan can shed his insights on how these new regulations might affect hoteliers and restaurateurs.  Thank you for today’s post, Dan! – Greg

In the spirit of the giving season, the FDA has finally issued its long-awaited final rules on menu labeling, which had languished in draft form for several years.  But for many hospitality businesses, the agency’s year-end gift is little more than a lump of coal.  That is because when the rules go into effect on December 1, 2015, they will require restaurants, hotels, and other sellers of “restaurant-type food” to provide nutrition information for the items on their menus, closing what the FDA perceived as a “regulatory gap” in the food-labeling sphere.

The new rules apply primarily to chain or franchise establishments (although the FDA is quick to point out that other businesses may voluntarily opt in if desired)! Specifically, the rules cover any restaurant or “retail food establishment” that is part of a chain of twenty or more locations doing business under the same name, serving substantially similar food items at each location.  Sounds simple enough, but it is the FDA’s definition of “restaurant” that has caused considerable heartburn.  In the view of the agency, a restaurant can be any one of a wide array of retail and hospitality businesses, including  bakeries, cafeterias, coffee shops, convenience stores, delicatessens, bowling alleys, amusement parks, grocery stores, fast food restaurants, table service restaurants, or any establishment offering for sale what the FDA has helpfully dubbed “restaurant-type food.”

What is “restaurant-type food,” exactly?  According to the new rules, it is food that is usually eaten at the restaurant, or while walking away, or “soon after arriving at another location,” and is either sold for immediate consumption or is ready-to-eat somewhere else.  In other words, whether it’s take-out, dine-in, or maybe a deli sandwich for dinner tonight, the rules will apply.

So, what makes a restaurant part of a chain?  According to the agency, it must be doing business under the same name (or a substantially similar name, such as “Restaurant” and “Restaurant Express”) as at least nineteen other locations, and must serve the same or substantially similar menu items.  “Locations” include restaurants within other facilities, and indeed multiple restaurants within the same building (a mall, for example) are counted individually.  If the restaurant has no name of its own – for example, a cafeteria in an office building or an unnamed hotel café – then the restaurant is considered to be doing business under the name of its parent entity.  So, that means that if each of a hotel’s twenty or more locations has an identically-named or unnamed restaurant (including the one providing room service), the rules will apply to them.  On the other hand, the rules would not apply to a hotel restaurant if it has its own unique name.

To comply with the rules, businesses must include calorie and other nutrition information on their menus, menu boards, signs adjacent to the food, or the like – essentially, wherever the standard food items and prices are listed.  They also must print a “succinct statement” informing customers of the recommended daily caloric intake for adults or children, depending on the menu’s target audience.  Restaurants also must keep nutrition information for their standard fare on hand in case it is requested by a customer – and the restaurant must note on the menu that such information is available.

Failing to adhere to the rules is sure to cause quite the bellyache, as well.  In response to public comments, the FDA noted that any person exercising authority and supervisory responsibility over a restaurant or similar retail food establishment could be liable for a violation.  That could mean that even the owner of a single franchise could get his or her goose cooked if that location isn’t up to snuff.

If there is any silver lining for the hotel industry, though, it is that these rules today don’t apply to alcoholic beverages that are “food on display” and not self-service, such as those bottles of liquor behind the hotel bar.  Of course, any drinks that are listed as standard menu items still will need to be labeled.  Bon appétit!

For more information about the new Food Labeling Regulations, please visit the Federal Register website. Also if you have any questions, please contact Greg Duff or Dan Vecchio.

Washington State Liquor Control Board Rules Now Prohibit Marijuana Consumption in Liquor Licensed Premises: Implications for Licensed Hotel Properties

Posted in Cannabis, Garvey Schubert Barer, Hotel Guest Room Privacy, Hotels

Jared Van Kirk is a member of Garvey Schubert Barer’s Labor and Employment Group and a previous blog contributor.  Jared has been following how legalized recreational marijuana in Washington affects all employers and how the Washington State Liquor Control Board (WSLCB) will regulate marijuana consumption in premises holding liquor licenses, which will have a direct impact on the hospitality industry in Washington State. Jared is also a member of Garvey Schubert Barer’s Cannabis Industry Group and has been involved in opposing challenges to Washington’s recreational marijuana laws.  Thank you, Jared, for sharing this very important update. – Greg

Since Washington voters passed I-502 in 2012, there has been much discussion concerning how hoteliers should respond to guests who seek to use (or are caught using) marijuana on a hotel property, either in a public area or in a guest room. Could a hotel even promote itself as friendly to marijuana tourists?

Use of marijuana in view of the general public remains illegal under state law and Liquor Control Board regulations have long required liquor licensees to conduct their licensed premises in compliance with such state drug laws.  Allowing guests to smoke anything, including marijuana, in public spaces may also violate public smoking laws and smoke-free workplace laws.  So, it was fairly clear that guests could not use marijuana in the public areas of a hotel, and a hotel could not allow guests to use marijuana (smoked or otherwise) in any public place.  But that left open the question of whether a hotel could allow guests to use marijuana in smoking-friendly rooms, either explicitly or simply by taking no affirmative action against use of marijuana in guest rooms.

Amended Liquor Control Board rules that went into effect earlier this year appear to answer this question with respect to properties with hotel liquor licenses.  WAC 314-11-015 addresses the responsibilities of all liquor licensees, including hotel licensees.  The amendments state that licensees and their employees may not:

Engage in or permit any employee or other person to engage in the consumption of any type of marijuana, usable marijuana, or marijuana-infused products in a liquor licensed business, including outdoor service areas or any part of the property owned or controlled by the licensee.

or

Permit any person consuming, or who has consumed within the licensed premises, any type of marijuana, usable marijuana, or marijuana-infused products to remain on any part of the licensed premises.

Licensed premises” includes all areas under the legal control of the licensee and available to or used by customers, which would include guest rooms.

It is unclear whether the Liquor Control Board intended these amendments to require hotels with premises licenses to exclude marijuana use in guest rooms and require licensed hotels to remove patrons who have used marijuana in guest rooms. However, as written, the amended rule states that a hotel licensee may not permit any person to consume marijuana in any part of the property owned or controlled by the licensee nor remain on any part of the licensed premises after consuming marijuana on the licensed premises.  The letter of these rules require licensed hotels to prohibit use of marijuana in all areas of their property, including guest rooms, and to remove patrons who are found to have consumed marijuana on their property.

If you have any questions about the issues raised in Jared Van Kirk’s post, please contact us! Greg Duff or Jared Van Kirk.

“I know it when I see it”: Considerations for Soft Branding

Posted in Brands and Trademarks, Trade Dress Protections

What is soft branding?  Is it better to be a soft brand or a hard brand? Claire Hawkins, Chair of Garvey Schubert Barer’s Intellectual Property Practice and member of Garvey Schubert Barer’s Hospitality, Travel and Tourism Practice, gives serious consideration to the outer edges of soft branding and offers her insights on the intellectual property components hoteliers and restaurateurs need to consider.  Thank you for today’s post, Claire! – Greg  

 “I know it when I see it”: Considerations for Soft Branding

Independent hospitality businesses can benefit from the appeal of freedom, individuality, and uniqueness, but over time may also struggle with the lack of convenience and efficiency that established, consistent, and defined brands have. One-of-a-kind hotels, restaurants, or the like are great at capturing customers preferring “hidden gem,” “independent,” “boutique,” “local,” or “customized” venues, but by not going so far as to define the scope or consistent aspects of their brand, may not have the resources necessary to adequately protect the time and effort it took to develop and implement the unique aspects of the brand. A sign of success is surely competition, and it takes real cash and resources to stay ahead of trends. How then is it possible to have the flexibility of a unique and undefined brand, but also to prevent brand infringement and consumer confusion from copycats?

The décor or trademarks of major brands such as Marriott, Applebee’s, or even Motel 6 and Olive Garden are easy to define and identify. Recognition is one benefit of defined branding, along with the ability to set and meet customer expectations. The counterpart to these hard brands is of course the soft brand. Soft brands essentially define what a brand is supposed to do, rather than what elements make up that brand. Is it better to be a hard or a soft brand?  Hard brands have the perception of strength and solidity, and soft brands communicate of grace and fluidity. With either, consistency is key, but consistency is much harder to achieve with soft brands.

If it is at all possible, building a more defined brand portfolio is helpful when trying to keep hold of your good idea, and to stop others from appropriating efforts or styles you worked so hard to establish. One way to protect and be better able to police a brand is to have definitions, uniformity, and registrations.

Not just logos or words can be registered and protected with the US Trademark Office, but décor, product packaging, and color schemes as well in the category of “trade dress.” Trade dress protection is intended to protect consumers from packaging or appearance of products that are designed to imitate other products and to prevent a consumer from buying one product or service under the belief that it is another. For example, an arrangement of a children’s clothing line, the design of a magazine cover, the appearance and décor of a chain of restaurants, and a way of displaying wine bottles in a wine shop can all be protectable trade dress.

To register trade dress with the US Trademark Office, the trade dress must be defined and consistently used, but also be distinctive and not simply functional.  These requirements serve the purpose of trademark or trade dress protection generally, which is to allow customers to identify the source of a product or service by creating recognition in the consumer’s mind.

Given these seemingly strict requirements, before dismissing trade dress registration out-of-hand as to restrictive to your one-of-a-kind brand, consider whether you might still be able to meet the minimum threshold to register some aspects of your brand, which could go some distance to both building a portfolio of intellectual property assets that can be leveraged, but also allow you to stop infringers and copy-cats:

1.            The US Trademark Office requires a clear statement of the goods or services offered in connection with the trade dress, e.g., “retail store services featuring communication products and services,” “hotel and motel services,” “casino services,” “resort hotel, restaurant, bar, and lounge services,” or the like.

 2.            You must also submit an image and description of the trade dress to be protected:

 

           Color is not claimed as a feature of the mark. The mark consists of trade dress consisting of a three-dimensional building with concave facade, a curved roofline sweeping up toward the left top corner when viewed from the front and the word “WYNN” in a stylized script in the top left corner. The horizontal lining does not indicate color, but is a feature of the trade dress.

          Color is not claimed as a feature of the mark. The mark consists of trade dress of a hotel’s exterior. At one corner of the building is a tower featuring several windows beneath a ledge, above which is a pedestal featuring the stylized text “MOTEL 6″. The elements in the drawing shown in broken lines show the position of the mark as applied to the building in which the services are provided and are not claimed as features of the mark.

          The color(s) white, orange, gray, dark orange, and beige is/are claimed as a feature of the mark. The mark consists of trade dress consisting of the interior of a hotel room. The walls in the room are white except for two walls that are colored orange: the wall behind the combination TV stand/hanger rod and the wall behind the bed. The bed features a gray blanket with a dark orange sash. Above the bed are two white rectangular wall lights. On one side of the bed is a built-in luggage rack that spans the distance to the wall featuring the window and on the other side is a built-in nightstand that spans the distance to a beige seat, which conforms to the wall. The seat is immediately adjacent to a writing desk, beneath which is a four legged chair, and above which is a mirror with a small ledge beneath it and below a rectangular white light. At the far end of the room is a window covered by a dark orange curtain that matches the bed sash. The elements in the drawing shown in broken lines show the position of the mark as applied to the room in which the services are provided and are not claimed as features of the mark.

           The color(s) green is/are claimed as a feature of the mark. The mark consists of a three-dimensional trade dress depicting two exterior doors. Each door has a green frame, a green bottom portion, and a glass panel in the upper portion. The wording “ROCCO’S TACOS AND TEQUILA BAR” appears on the glass panel. Door elements shown in dashed lines are not part of the mark. The colors black and white represent background, outlining, shading and/or transparent areas and are not part of the mark.

          The color(s) blue and white is/are claimed as a feature of the mark. The trade dress consists of repetitive wording in blue on a white box, the wording consists of the following, all in blue and in no particular order; hot burgers, pop, cool and frosty soda, luscious frosty soda, creamy shakes, luscious mouth watering warm buns, firm fries, warm buns. The words POP BURGER are in blue and appear at the center of the top of the box, which logo consists of the word POP with the image of a burger in place of the letter O, and the word BURGER written across the patty of the burger.

 

3.            To secure US registration of trade dress you must submit a date of first use and to maintain the registration, consistently use the mark as shown on the registration.

The benefits of federal registration include formal, public notice of your claim of ownership of the trade dress; a legal presumption of your ownership of the trade dress and your exclusive right to use the trade dress nationwide on or in connection with the goods/services listed in the registration; the ability to bring an action concerning the trade dress in federal court; the use of the U.S. registration as a basis to obtain registration in foreign countries; the ability to more easily stop competitors from engaging in behavior that is likely to cause consumer confusion; and the inclusion of the asset in your intellectual property portfolio.

If a definitive brand is not your thing, here are some additional options to help protect your investment in a soft brand:

  Agreements – consider non-compete language in agreements with employees, franchisees, licensees, and the like with respect to specific or general brand aspects.

  Remaining fluid – put time and energy into staying ahead of the trends to minimize mimicking, and be willing to jettison aspects that become trendy or are appropriated by others.

  Distinguish yourself – stay aware of competitors or similar businesses and avoid any similarities so that any copying of your own style is easily identified.

  Selective registration – choose one aspect in a softer brand that is key, use it consistently, and obtain registration for that aspect.

It is a great time to be an independent business in the hospitality industry, but be aware of both the limitations of an intentionally un-defined brand and the benefits of identifying, registering, or otherwise adding some protection to the business you are building.

If you have any questions about brand or trade dress protection, please feel free to contact me directly chawkins@gsblaw.com.

 

Photo credits:  images are from the US Trademark Office’s website and are used as examples of successful trade dress registrations.

On the road – highlights from 2014 PhoCusWright Conference in Los Angeles, CA

Posted in Conference Notes, Hotels

This week finds me at LA Live in downtown Los Angeles attending this year’s PhoCusWright Conference.  Those in the hotel industry know LA live well – for the past few years the JW Marriott at LA Live has served as the host hotel for the industry’s annual ALIS Conference. While ALIS is known for bringing together the hotel industry’s best and brightest, I would submit that the 1600 plus attendees (from 40 plus countries) at this year’s PhocusWright represent the future of travel and the hotel industry.

The first day of the Conference featured no less than 32 companies (of varying size and age) presenting their newest travel innovations. I sat through many of these presentations, which provided me an incredible look into the future of travel, distribution, the use of travel data and content and other travel innovations.  Some key takeaways . . .

- Web transparency (and its many effects) continues – a number of the presentations featured functionality allowing travelers to hold or book a specific rate and then cancel that booking and book at a new, lower rate in the days, weeks or months prior to arrival.

- Content is king – studies of travelers continue to show the value and influence if relevant, superior content – a number of the innovations presented either promoted their content (or access to third party content) or their ability to curate or organize content in a way no one else can (debatable)

- Cloud computing is ubiquitous – if you are in the computing world, you’ve known this for years.

- The travel experience – from the top of the travel “funnel” through the trip itself is becoming more segmented and bifurcated every day – no wonder hoteliers struggle to get theirs arms around and control guests’ experiences – from inspirational searches, to pre-arrival communications and up-sells, to in-destination marketing, to post-stay feedback and evaluation – there are increasing numbers of industry participants that wish to control the guest’s experience.

- Focus on ancillary services continues to grow. Innovators are looking beyond the large air and hotel components of travel to smaller, more fragmented ancillary services and products – rental cars, public transportation, restaurants and travel insurance.

The second day of the Conference featured a number of interesting substantive presentations leading up the afternoon’s “keynote” addresses by Cvent, Ctrip, Homeaway and Expedia.  Similar presentations are scheduled for the third and final day.

Look for my  post-Conference blog post later this week!