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Meet the Money® 2014

ADA defense and compliance

EB-5 financing

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This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer. Please contact me at Jim Butler at jbutler@jmbm.com or 310.201.3526.

Published on:

24 January 2020

If you’re planning to attend the 2020 ALIS conference next week, we’d like to hear from you! Our Global Hospitality Group® attorneys are ready to discuss:

  • Successful hotel purchase strategies
  • Getting a great hotel management agreement
  • Optimizing your financing structure
  • Avoiding regulatory pitfalls in 2020
  • How to protect your company and comply with new cybersecurity regulations
  • Hotel industry litigation issues

Please contact us if you’d like to get in touch during the conference:

jim-150x150Jim Butler
Partner, Chairman
Global Hospitality Group®
310.201.3526
JButler@jmbm.com
guy-150x150Guy Maisnik
Partner, Vice Chair
Global Hospitality Group®
310.201.3588
MGM@jmbm.com
david-150x150David A. Sudeck
Partner
310.201.3518
DSudeck@jmbm.com
bob-150x150Robert E. Braun
Partner
310.785.5331
RBraun@jmbm.com
jeff-150x150Jeffrey T. Myers
Partner
310.201.3525
JMyers@jmbm.com
mark-150x150Mark S. Adams
Partner
949.623.7230
MarkAdams@jmbm.com
Published on:

23 January 2020

See how JMBM’s Global Hospitality Group® can help you.

Click here for the latest articles on ADA Compliance and Defense.

Over the years, my partner, Marty Orlick, Chair of JMBM’s ADA Compliance and Defense Group, has written about service animals used by persons with disabilities, and what hospitality staff needs to know about how to accommodate them. For example, what should the hostess of your restaurant do when a miniature horse enters your establishment with its disabled owner? What kind of animals qualify as service animals, anyway? And what is the owner’s responsibility?

Read Marty’s latest article on this topic, The ADA and Service Animals – Don’t Horse Around.

Click here to read the article.

CONTINUE READING →

Published on:

10 January 2020

See how JMBM’s Global Hospitality Group® can help you.

Click here for the latest articles on Data Technology, Privacy & Security.

 

Hotel data breaches can have significant financial and reputational impacts on a brand, as evidenced by Marriott’s $123 million GDPR fine. In the article below, Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, outlines the critical importance of data security for the hospitality industry.

— Jim

Hotel Managers and Owners Be Warned – You are Responsible for Your Hotel’s Data Security
by
Bob Braun, Cybersecurity Lawyer

The FTC Speaks

On January 6, 2020, the Director of the FTC’s Consumer Protection Bureau published a blog post with changes to the FTC’s approach to its orders and settlements of data breach enforcement actions.  One of the key elements of the report was a revision to the FTC’s routine enforcement practice to ensure that its remedial data security orders include greater specificity about compliance expectations for companies subject to enforcement action and for third-party assessors engaged to conduct FTC-mandated monitoring and audits of targeted companies’ data security practices.

Beyond greater detail guiding data security requirements, the blog post highlights that a core element of the FTC’s model for remedial orders is that senior management, on at least an annual basis, present the company’s written information security program to the board or other governing body for oversight and review, and that management certify to the FTC that the company has complied with data security obligations.

The Growing Role of Managers and Boards in Data Security

The decision by the FTC reflects a growing consensus about the roles and responsibilities of management and boards for the adequacy of enterprise programs to identify, evaluate, and manage data and information security risks.  While this is not the first time boards of directors have been held accountable for the security practices of the companies they represent, it shows that this obligation has become mainstream and should be noted by all companies, whether they

The FTC’s endorsement of data security-related corporate governance approaches, safeguards, and third-party monitoring methods is likely to impact enforcement expectations of other regulators, whether state, federal or local, responsible for administering data security compliance and breach notification regulations.

CONTINUE READING →

Published on:

07 January 2020

See how JMBM’s Global Hospitality Group® can help you.

Click here for the latest articles on Labor & Employment.

California hotel owners and independent operators must provide
human trafficking awareness training

California SB 970 went into effect January 1, 2020, requiring California hotel and motel employers to provide at least 20 minutes of prescribed training and education regarding human trafficking awareness to employees who are likely to interact or come into contact with victims of human trafficking.

JMBM’s labor and employment lawyers have represented the hospitality industry for decades and can provide effective training for employees, as well as develop policies and procedures that protect employers who are implementing programs in human trafficking awareness.

Marta Fernandez, a partner in JMBM’s Labor and Employment department and a senior member of JMBM’s Global Hospitality Group®, alerted hotel owners and independent operators of the new law shortly after it was signed by the governor in 2018.

CONTINUE READING →

Published on:

02 January 2020

Click here for the latest articles on Data Technology, Privacy & Security.

 

My partner, Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, has written extensively about the California Consumer Privacy Act that became effective January 1, 2010.  In his excellent article below, he describes how the CCPA will impact the hotel industry.

— Jim

CCPA: Loyalty Programs, Data Retention and the Brave New World of Privacy

by Robert E. Braun

This article first appeared in the Hotel Business Review and is reprinted with permission from www.HotelExecutive.com.

The California Consumer Privacy Act (the “CCPA” or the “Act”) is a piece of consumer privacy legislation which was signed by California Governor Jerry Brown on June 28, 2018, and goes into effect on January 1, 2020. The Act is, far and away, the strongest privacy legislation enacted in the United States at the moment (although there are a number of contenders for that honor), giving more power to consumers to control the collection and use of their private data, and is poised to have far-reaching effects on data privacy.

What is the CCPA?

It is estimated that more than 500,000 companies are directly subject to the CCPA, many of them smaller and mid-size business, where the detailed requirements of the Act – disclosure and notice procedures, opt-out rights, updating privacy policies, and revising vendor agreements – is daunting. As discussed below, many hotels and hotel companies will be directly impacted by the Act, either because their qualify as a “business” as defined in the CCPA, or because they are associated with companies – brands and management companies – that are subject to the Act. Hotel owners, managers and brands that have not grappled with the requirements of the CCPA need to move quickly to do so, or risk potential liability under the penalty provisions of the Act.

Where did the Act Come From?

In early 2018, Alistair McTaggart, a California real estate developer, led an effort to include a new privacy law – the Consumer Right to Privacy Act of 2018 – on the November 2018 California ballot. By June 2018, supporters of the initiative had gathered enough signatures to earn a place on the November ballot. In response, California legislators, working with California businesses and other interest groups, negotiated and passed a substitute bill – the CCPA – in exchange for an agreement to drop the more restrictive text in the Consumer Right to Privacy Act from the November ballot.

The Act is aggressive, and cites the March 2018 disclosure of the misuse of personal data by Cambridge Analytica, as well as the congressional hearings that followed which highlighted the fact that any personal information shared on the internet can be subject to considerable misuse and theft. This prompted the California legislature to move rapidly to protect Californians’ right to privacy by giving consumers much more control of their personal information. CONTINUE READING →

Published on:

30 December 2019

Click here for the latest articles on Labor & Employment.

Hotel Lawyer with labor & employment law update for 2020

Several new pieces of California legislation will take effect on the first day of the new year, impacting nearly all employers and how they handle worker classification, discrimination disputes, arbitration agreements, and union organizing. Our round-up will help you determine which key issues may impact you in 2020; contact us to be sure you’re ready for all these upcoming changes.

Use of Independent Contractors Severely Limited as of New Year

On September 18, 2019, California Governor Gavin Newsom signed AB 5 into law, codifying the holding in Dynamex Operations West, Inc. v. Superior Court which severely curtailed when employers may use independent contractors. AB 5 is effective January 1, 2020 and sets forth an “ABC” tests to determine whether workers qualify as independent contractors.

The test examines whether:

  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact
  2. The worker performs work that is outside the usual course of the hiring entity’s business
  3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed

The “B” prong is new, and may be particularly problematic for businesses – potentially resulting in misclassification of individuals who were formerly properly classified as independent contractors.

AB 5 codifies a number of exceptions from the ABC test, including but not limited to:

  1. A person or organization licensed by the Department of Insurance;
  2. California licensed physician, surgeon, dentist, podiatrist, psychologist, or veterinarian;
  3. California licensed lawyer, architect, engineer, private investigator, or accountant;
  4. Securities broker-dealer or investment adviser or their agents and representatives registered with the SEC or FINRA or licensed by California;
  5. Direct sales salespeople;
  6. Commercial fishermen.

Workers in these categories are subject to the “Economic Realities” test set forth in Borello & Sons, Inc. v. Dept. of Industrial Relations. In applying the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control, or the right to control, the worker both as to the work done and the manner and means in which it is performed.

AB 5 also provides for limited exemptions to the ABC test for certain professional services, business-to-business contracts, construction subcontracts, relationships between referral agencies and service providers, and contracts between motor clubs and third parties. When these categories of relationships qualify, they are subject to Borello’s economic realities test.

What this means for you: All businesses using independent contractors should conduct audits and review written independent contracts under the new standards to ensure that workers are properly classified. Misclassification can result in significant penalties, wage and hour liability, EDD and other tax liabilities as well as trigger class action lawsuits.

CONTINUE READING →

Published on:

17 October 2019
Click here for the latest articles on Labor & Employment.

As of January 1, 2020, California employers will need to comply with a new law which codifies a heightened standard of classifying an individual as an independent contractor. The new law can have significant implications for hospitality industry employers. Marta Fernandez, hotel lawyer and a partner in JMBM’s Labor & Employment department, discusses the new law and what employers can expect.

California limits use of independent contractors,
creating significant liabilities and penalties for California employers

by Marta Fernandez

On September 2019, California Governor Gavin Newsom signed Assembly Bill No. 5 (AB 5) into law, regarding the classification of workers as employees or independent contractors. The new law will have far-reaching effects with respect to employee classification, tax ramifications, and corporate structuring in California.

AB 5 will become effective on January 1, 2020.

On the most basic level, the law codifies the heightened standard of classifying an individual as an independent contractor and will affect employer costs with respect to Social Security and Medicare taxes, unemployment and disability insurance, workers’ compensation costs and coverage, sick leave, minimum wage, overtime, and rest breaks and meal periods.

The new law codifies the “ABC” test for determining independent contractor status, which was adopted as the default classification test by the California Supreme Court in its 2018 decision in Dynamex Operations West, Inc. v. Superior Court. CONTINUE READING →

Published on:

26 September 2019

Click here for the latest articles on Resort Fee Litigation.

Note: If you are a consumer with a Resort Fee issue, please do NOT contact us! We do not represent consumers with complaints against hotels. We advise hotel industry clients on litigation, compliance and risk mitigation strategies. We have provided counsel on Attorney General investigations. We understand the best defenses to consumer and government agency claims that Resort Fee practices constitute violations of state consumer protection actions, the Federal Trade Commission Act and other causes of action based on misrepresentation, consumer fraud, and unfair business practices.

On September 25, 2019, a bill was introduced in the House of Representatives that would expressly make hotel resort fees and other mandatory charges illegal.

H.R. 4489 is entitled the Hotel Advertising Transparency Act of 2019. It was introduced as bipartisan legislation by Representative Eddie Bernice Johnson (D-TX) and Representative Jeff Fortenberry (R-NE).

H.R. 4489 declares that the practice of charging mandatory fees which are not disclosed with the advertised rate of a hotel room (excluding taxes and fees imposed by a government) is unfair and deceptive to consumers. It expressly authorizes the Federal Trade Commission (FTC) to enforce the legislation and also permits State Attorneys General to do so as well, coordinating with the FTC.

Click here to see the complete text of H.R. 4489, the Hotel Advertising Transparency Act of 2019.

How angry are consumers? Will hotels lose guests over resort fees? Will H.R. 4489 become law? What will be the outcome of the litigation filed against Hilton and Marriott?

We don’t know the answers. But these questions are being asked not only by attorneys general and legislators, they are on the lips of movers and shakers throughout the industry.

How to get help with Resort Fee litigation issues CONTINUE READING →

Published on:

24 September 2019

Click here for other cannabis-related articles.

The column below was first published in the October 2019 issue of Hotel Management and is reprinted with permission.

Why are so many hoteliers talking about cannabis hotels?
by
Jim Butler, Hotel Lawyer

Legal cannabis sales exceeded $10 billion in 2018, and are expected to exceed $20 billion by 2025. 33 states plus the District of Columbia have legalized marijuana for recreational  or medical purposes (or both). With all this activity, many sense an opportunity to generate more guests and profits by developing “cannabis hotels”.

Are you recommending your hotel clients dive into this?

No, except as a limited opportunity to explore carefully. Our law firm is extremely active in the hospitality industry and is one of few full-service firms in the country with a dedicated cannabis group, so we would certainly present a cannabis opportunity to the hotel industry if we thought it was viable. But we think cannabis is a “false flag” opportunity for hotels, presenting more problems than opportunities.

You say more problems than opportunities. Why?

Cannabis is still a Schedule 1 substance prohibited by Federal law. Federal agents can seize product and arrest people trafficking in cannabis products, even in states where it is legal.

The Federal illegality spooks banks with FDIC insurance. Does any hotel want to risk its banking relationships and lines of credit to dabble with cannabis?

The IRS can deny ordinary and necessary business deductions to taxpayers who traffic in Schedule 1 substances.

The regulatory situation is very complex with widely divergent state and local regulations, making it difficult or impossible to formulate uniform procedures and business approaches.

In many jurisdictions, it is likely that the property would lose all liquor licenses if it distributes cannabis products. CONTINUE READING →

Published on:

07 August 2019

Click here for the latest articles on Data Technology, Privacy & Security.

Many hotels operate internationally and are frequently subject to the European Union’s 2018 General Data Protection Regulation. The financial consequences of a breach can be significant, as recent fines imposed on Marriott International demonstrate.

Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, explores the impact of last year’s breach on the hotel brand below.

Marriott’s GDPR Fine – Lessons to be Learned
by
Bob Braun, Cybersecurity Lawyer

On August 5, 2019, Marriott International announced that it had taken a $126 million charge in the second quarter, primarily as a result of the data breach it announced in 2018. Coincidentally, on July 9, 2019, The United Kingdom’s Information Commissioner’s Office (ICO), which enforces the General Data Protection Regulation in the UK, announced that it intends to impose a fine of £99,200,396 ($123,705,870) on Marriott for last year’s data breach. CONTINUE READING →