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 10 Ways to Bulletproof Your Hotel
Against Legal Attacks

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By: Diana S. Barber, Esq., June 2004

How can you dramatically reduce legal attacks while building a wall of defense around your company?  Follow these ten simple steps and you will be on your way to protecting your company by building a fortress of defense.

1.  Investigate and take action on all reports of harassment and discrimination.  All managers and directors must report to the human resources director or other personnel any and all incidences or claims made by employees in connection with sexual harassment or any other type of harassment or discrimination.  If managers do not report the incident or claim and an investigation does not occur, the company is at risk.  Every employee should undergo annual anti-harassment and anti-discrimination training.  The company’s policy of prohibiting harassment and discrimination of any kind should be clear, in writing, and effectively communicated to every employee. Newly hired employees, as well as seasoned veterans, need this training. During any investigation, if new incidences are discovered, those incidences should also be thoroughly investigated.  A report, which includes written statements of witnesses and the resolution of the claims, needs to be well documented and placed in the appropriate personnel file.

2.  Make sure all agreements with vendors and suppliers are in writing and their insurance has not expired.  The financial officer of each hotel or restaurant should undertake a careful review of all agreements.  Be particularly mindful of indemnification clauses (in which one person agrees to protect another person from claims by third parties), waivers and releases, automatic renewals of the term of the agreement and assignment clauses that prohibit the hotel or restaurant from transferring the agreement to a new purchaser or new operator.  Make sure all vendor and supplier agreements allow for the hotel or restaurant to cancel for any reason or no reason on thirty-(30) day’s written notice. Obtain current certificates of insurance from every vendor and supplier and ask for updated certificates periodically.  Make certain that the insurance certificate lists the hotel or restaurant operating or managing company, as well as the owner of the establishment, as additional insured parties on the policy.

3.  Keep accurate maintenance logs on all equipment.  Many cases have been settled or lost in court due to the failure of the property owner to maintain accurate maintenance logs on equipment owned or serviced by a hotel.  This includes the monthly, quarterly or annual maintenance checks on elevators, bicycles, fitness equipment, pool equipment, etc. It is important to maintain clear and accurate records to show a judge, jury or opposing lawyer the diligence that went in to ensuring the property was safe.  Among other things, the records should reflect the times and dates of inspection, any and all repairs made and the name(s) of the qualified employee(s) responsible for maintaining the records.  Accidents happen, of course, but an accurate maintenance log will go a long way in reducing your liability.

4.  Follow all rules for proper notification to guests of in-room telephone charges.  Due to the popularity of cell phones and PDAs, hotel guestroom telephone usage has declined.  However, many hoteliers may not be aware that there are federal and state laws stating what must be clearly communicated to your guests prior to them making telephone calls from guestrooms.  Written notice of all fees and charges must be given to the callers in the guestrooms as directed by the statutes, and should be featured in a prominent location.  The in-room guest directory should include the following information and applicable charges: local calls, directory assistance, alternate carrier access (for other long distance carriers than the one the hotel does business with), toll free calls, international calls and long distance calls.

5.  Don’t send unsolicited faxes to customers without their written permission. The 1991 Federal Telephone Consumer Protection Act prohibits the sending of unsolicited fax advertisements in all states. Specifically, business owners are not allowed to send unsolicited faxes that advertise the commercial availability or quality of property, goods or services to customers without first obtaining their permission. The recipient of such faxes can successfully sue the sender and collect $500 per fax.  Plus, if they can prove you willfully violated the law, they could recover $1500 per violation.  Although some companies are challenging this law based on First Amendment issues, until the law is changed, compliance will eliminate these claims. 

6. Have all employees who pour, serve or sell alcohol beverages, and all managers, attend an alcohol awareness program.  Not only is it important for this training to occur, your legal adviser (and most likely, your insurance carrier) will insist that your employees learn the legal basics of pouring, serving and selling alcohol beverages to your patrons and guests. Most states have “dram shop laws” that require establishments to adhere to alcohol safety and awareness standards.  If someone leaves your establishment and is personally injured or injures another person or property, the patron’s lawyer will look to the establishment to see if alcohol was consumed on the premises.  Be smart and implement preventative measures now. 

7.  Have a written email policy prohibiting jokes, off-color remarks, and other potentially offensive activities. As part of their lawsuits against companies, plaintiffs are requesting that defendant companies produce all email transmissions in order to collection incriminating information about the company and its employees.  These messages, although may appear to be deleted by each user, are not gone forever.  They actually are maintained on back-up tapes that carry this information forever (at least a very long time until they are erased by an IT professional).  Remind employees that although email messages appear to be a quick and casual way of communicating, it can be hazardous to your company’s bottom line.  Advise them not to put anything in an email message that they would not want to see as a headline in your daily newspaper. Every company’s written email policy should require all employees to avoid creating, viewing or forwarding offensive or inappropriate emails or Internet postings related to a person’s race, color, national origin, religion, sex, sexual orientation, age, disability or veteran status.  Also, they should avoid creating, viewing or forwarding jokes, cartoon, games or chain letters.  The email policy should also provide for immediate disciplinary action or termination of employment, if necessary, for violations.

8.  Be aware of scams.  There are numerous scams ongoing for many years that managers need to be aware of and need to educate all employees.  For example, con artists are targeting companies with the Nigerian letter scam.  This scam begins with a letter or message that is mailed, faxed or emailed informing a business that there is a certain surplus of funds that exist and by providing your business bank account information to hold these funds for a short time, the business will receive a portion of these funds.  This is an attempt to empty your company’s bank account. Also, be aware that certain companies may be marketing a hotel directory that is not pre-approved or in line with your company’s marketing strategies. An unsuspecting employee may obligate your company by agreeing to a long-term commitment to have your property listed in the directory.  A good resource for learning more about scams can be found at www.snopes.com.

9.  Inform your guests about laptop computer theft.  In too many cases, laptop computers are left in hotel meeting rooms and are easy targets for thieves.  To anticipate your guest’s needs, provide a safe to store laptop computers when not in use or when the group is taking a break from their meeting.  Provide computer-cabling locks to assist your guests in securing their laptops.  Lock or control entry to meeting rooms when not in use.  While not a preventative measure, hoteliers can also post a warning in the area so that the hotel is not responsible for stolen or damaged property.  Prior to posting the sign, review your state’s limitation of liability statute to determine your liability in such cases.

10.  Don’t release guest information to anyone other than the guest.  Releasing guest information to the wrong person can result in a claim being filed against your property. Guests have a certain expectation of privacy that needs to be acknowledged and recognized by all employees.  A written policy needs to be established whereby (i) the registered guest makes the request in person and either the guest is recognized by the employee or provides sufficient identification or (ii) the guest submits a signed, written request and the hotel or motel is able to verify that the signature belongs to the registered guest.  Certain exceptions to the policy would include those circumstances when the hotel or motel is compelled by law to produce the guest information (a court order or subpoena, for example) or when a crime has been committed against the hotel or motel.



Diana S. Barber, former vice president and associate general counsel for The Ritz-Carlton, is a lawyer in private practice specializing in hospitality law, an adjunct professor at Georgia State University and a member of the Georgia Hospitality & Travel Association.  She can be reached at diana.barber@lodge-law.com or www.lodge-law.com

This article is written for general information purposes only. It is not designed to be and should not be relied on as your sole source of information when analyzing and resolving a specific legal issue. Each fact situation is different; the laws are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult with competent legal counsel.


 
 
Contact:
 Diana S. Barber, Esq. 
Barber Law Associates, P.C.
5925 Masters Club Drive 
Suwanee, GA  30024
(770) 813-9363 
diana.barber@lodge-law.com
www.lodge-law.com
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Also See: Accepting Minor Guests in Your Hotel; A Checklist for Handling the Challenges of Underage Guests / Diana S. Barber / May 2004
High Speed Internet Access in Hotels; A New Amenity Opens Up New Liabilities / Diana S. Barber / March 2004
How to Safeguard Your Guests from Being the Next Identity Theft Victims / Diana S. Barber / February 2004
LodgeLaw, P.C., a Hospitality Specialty Law Firm, To Open in Northeast Atlanta; Firm President is former Ritz-Carlton Vice President and Associate General Counsel / June 2003


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