November 2000 - The Consumer Advocacy Group�s actions against hotels has been continuing for two years now.  As you may know, Proposition 65 (The Safe Drinking Water and Enforcement Act of 1986) requires businesses of 10 or more employees to provide �clear and reasonable� warnings, prior to exposing individuals to certain chemicals at significant (very minute) risk levels. If the required warnings are not given, the penalty can be $2,500 per day, per violation. The plaintiffs have leveraged the prospect of Proposition 65 fines and penalties in a cynical manner and allege violations of Proposition 65 due to exposure to tobacco smoke.

JMBM has been in the thick of these cases � litigating if necessary, settling as appropriate, and providing comprehensive compliance advice to minimize exposure to penalties and  future actions. We are actively participating in the ad hoc defense group formed around the cases filed in Los Angeles and we are resolving several cases filed in San Francisco. Plaintiffs have also filed cases in San Francisco to avoid the impact of the Los Angeles court-ordered stay on proceedings while plaintiffs appeal an initial ruling throwing out the cases first filed.

If your hotel has been lucky enough to avoid a 60-day notice of intent to sue letter from the Consumer Advocacy Group, Inc., or others, don�t be lulled into complacency. Notwithstanding JMBM�s favorable trial court rulings, the plaintiffs remain undeterred, and new cases are being filed weekly. It is highly likely that your hotel will be targeted eventually as it appears the plaintiffs have become familiar with the many hotel directories and listings.

We recommend that each of your facilities promptly conduct a Proposition 65 compliance evaluation. First, review the requirements of Proposition 65.  It is codified at California Health and Safety Code section 25249.5 et seq.  Second, obtain compliance assistance from experts to provide �clear and reasonable� warnings.
 

In a landmark decision, the California Supreme Court addressed the enforceability of agreements to arbitrate employment claims.  Although the Court in Armendariz v. Foundation Health Psychcare Services, Inc. found the arbitration agreement at issue to be unenforceable, it authorized the use of arbitration agreements by California employers so long as they meet certain procedural safeguards.  

This is good news for California employers in the labor-intensive hospitality industry, who can now require their employees to arbitrate all employment-related claims (including claims of employment discrimination) and avoid risky jury verdicts.  

However, the Court emphasized that there must be a written agreement with safeguards to ensure fairness.  At a minimum, arbitration agreements must:

• Be �mutual� � in other words, require both parties to arbitrate disputes
• Provide that all costs be absorbed by the employer
• Permit adequate discovery
• Not limit the remedies available to an employee in the arbitration;  that is, an employee must be able to recover all remedies which would be available in a lawsuit, including punitive damages and attorneys fees

Jeffer, Mangels, Butler & Marmaro's Labor & Employment Department would be happy to evaluate your existing arbitration agreements or assist you in the preparation of new ones.