Restaurant Owners Lobby Congress Regarding Affordable Care Act

Under the Affordable Care Act starting in 2015, for businesses that employ more than 50 employees, any employee that averages at least 30 hours per week becomes considered a "full-time equivalent employee."  That designation means that the business would have to offer health care benefits, or face a government penalty. The concerns for those involved in the restaurant industry is that the this government penalty could erase any existing profit margin (given the low profit margin associated with the industry), and could reduce hours for current employees. There are several bills being advanced in Congress attempting to change the definition of "full-time equivalent employee" to 40 hours. In fact, restaurant industry owners and lobbyists were on Capitol Hill on September 17, 2013 discussing these very issues.  However, in the event those measures do not pass, it is imperative that those in the industry develop a plan for ways to maintain the profit margin while complying with the new law. The Clark Hill Labor and Employment team can analyze your business, alert you to the effect of the new Act on your business, and provide you with the tools necessary to develop a plan given the intricacies related to Affordable Care Act as is, and in the event of a last minute definition change.

http://www.sfgate.com/business/article/Restaurants-fight-30-hour-rule-in-health-care-law-4834700.php
http://thehill.com/business-a-lobbying/322583-franchise-owners-plead-for-relief-on-obamacare-

Caution Regarding Sticking Staff With Cash Shortages

The Minnesota Supreme Court recently sided with the bar staff who were forced to pay cash shortages out of their tips.  The full opinion is linked below, as well as newspaper coverage. The Court held that the mandatory deductions violated Minnesota wage and hour laws, which most, if not all states have in place.
 Aside from the legal implications, the media coverage caused substantial harm to the business, which has since filed for bankruptcy.  On a practical level, employee morale may be significantly decreased if such a policy is in place in your establishment, and turnover may increase resulting in major costs.  If cash shortages are a significant and recurring problem with a certain employee, it is better to document the issues and confront the employee.

http://case.lawmemo.com/mn/karl.pdf

http://www.startribune.com/local/minneapolis/219646251.html

Jordan and Dominick's Beef a Cautionary Tale Regarding the Illinois Right of Publicity Act

The Dirksen Federal Courthouse is no stranger to celebrities, politicians, and athletes walking through the doors.  However, it still makes heads turn when his Airness himself, Michael Jordan, is summoned to a Judge's chambers.  Unlike the former Illinois governors, though, Jordan was brought in to discuss his requested damages against Dominick's Finer Foods for their advertisement congratulating him on his Hall of Fame Career. Jordan has already been granted summary judgment and won the liability of phase of his case when Judge Shadur agreed that Dominick's violated the Illinois Right of Publicity Act.

Jordan brought suit against Dominick's Finer Foods, No. 10 CV 00407, alleging violations of the Illinois Right of Publicity Act, Trademark infringement, and various violations of the Lanham Act. Jordan strategically moved for summary judgment on the violation of the Illinois Right of Publicity Act. Once that was granted, the remaining allegations were voluntarily dismissed, and all that is left to argue is how much Jordan was damaged. 

The Right of Publicity Act, effective January 1, 1999, completely replaced the common-law tort of appropriation of likeness, although it did not affect the other three common-law privacy torts." Maremont v. Susan Fredman Design Group, Ltd., 772 F. Supp. 2d 967, 972, 2011 U.S. Dist. LEXIS 26441, 99 U.S.P.Q.2D (BNA) 1384, 31 I.E.R. Cas. (BNA) 1845, 39 Media L. Rep. 1992 (N.D. Ill. 2011). The Act protects against unauthorized "commercial" uses of a person's identity.  "Commercial" use is defined as "the public use or holding out of an individual's identity (i) on or in connection with the offering for sale or sale of a product, merchandise, goods, or services; (ii) for purposes of advertising or promoting products, merchandise, goods or services, or (iii) for the purpose of fundraising." 765 ILCS 1075/5."Identity" is defined by the statutes "any attribute of an individual that serves to identify that individual to an ordinary, reasonable viewer or listener, including but not limited to (i) name, (ii) signature, (iii) photograph, (iv) image, (v) likeness, or (vi) voice." 765 ILCS 1075/30. The statute is held to be a broad and expansive approach to protecting use of a person's identity without their permission. Muzikowski v. Paramount Pictures Corp, 2003 WL 22872117, at *6 (N.D. Ill., Dec. 3, 2003).

In Jordan's case, the claim under the Act was a slam dunk (bad pun intended).  Dominick's used his name, trademark number 23, and Air Jordan emblem in order to promote the sale of their Rancher's Reserve Steaks.  Dominick's even included a coupon, and admitted that they did not receive Jordan's permission.  It was a clear violation of the Act.

As for Jordan's damages, he demanded five million dollars from Dominick's Finer Foods.  I, along with the public and Judge Shadur, wonder how Jordan came up with that number.  My initial thought was that he has lost the concept of money, or he's had too much of that Miami sun.  However, the statute also defines what are recoverable damages. Section 40 of the Act provides that Jordan can recover actual damages, profits derived from the misuse and punitive damages.  765 ILCS 1075/40. It will be interesting to see how many steaks Dominick's actually sold based on the ad, and what Jordan can show his actual damages are.

Jordan brought a similar suit against Jewel-Osco, No. 10 CV 00304. However, Judge Gary Feinerman rejected Jordan's claims. In that case, Judge Feinerman ruled that the advertisement was noncommercial speech and, thus, entitled to First Amendment protections.  The advertisements can be seen below, and the most glaring differences were that Jewel-Osco was not promoting a product, and did not attach a coupon.

 Even if Jewel and Dominick's intent was only to honor Jordan, this is another example that no good deed goes unpunished. Companies, big or small, planning to use a celebrity's identity in Illinois should think long and hard before running an advertisement.  The Illinois protection goes even further than the federal protections, as an identity has been held to afford even broader protection than a trademark.  It is imperative to either (1) receive permission, which usually will include paying some kind of royalties; or (2) examine the advertisement long and hard to make sure its noncommercial speech, knowing full well that some courts hold that any company advertisement can be held to be commercial speech. The risk may very well outweigh the reward

Article

Interesting article about concerns for the restaurant industry based on the new healthcare laws...  Would love to hear feedback on what questions you are encountering as an employer.

7th Circuit Strikes Down Illinois Conceal and Carry Law

The Seventh Circuit struck down Illinois Conceal and Carry Ban today. The Court held

"The Supreme Court’s interpretation of the Second Amendment compelled the appeals court to rule the ban unconstitutional, the judges said. But the court gave 180 days to "allow the Illinois legislature to craft a new gun law that will impose reasonable limitations, consistent with the public safety and the Second Amendment as interpreted in this opinion, on the carrying of guns in public."

Now the ball is in the legislature's hands in order to craft time and place restrictions in the next six months.  Most likely, there will be additional permits and training requirements, in line with the City of Chicago's handgun restrictions.

http://www.chicagotribune.com/news/local/breaking/chi-us-appeals-court-strikes-down-states-concealedcarry-ban-20121211,0,7034171.story?track=rss

Employer considerations for employee's religious needs

*** Recent article I wrote for the Chicago Daily Law Bulletin -- it contains some considerations for those that have employees when considering accomodations for their religious needs.  The law protects our rights to practice our religion, however, it balances that right with the needs of our employers. 

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In a recent opinion, the Seventh Circuit shed light on what is a reasonable accommodation for an employee’s religious needs.  In doing so, the Court gave employers some guidance and framework for how to deal with such issues. In Porter v. City of Chicago, No. 11-2006 (Decided November 8, 2012), the Seventh Circuit upheld a district court's ruling granting summary judgment for the employer, the City of Chicago, in a Title VII action. The decision, authored by Circuit Judge Bauer, affirmed District Judge Virginia Kendall's opinion that the employee was offered reasonable accommodations for her religious needs by the City.

Ms. Porter was a Senior Data Entry Specialist for the City of Chicago in the Field Services Section of the records department for the Chicago Police Department. The data specialists are civilian employees that process information into electronic databases, such as processing the location about towed, stolen, or repossessed vehicles. The Field Services Section operates twenty-four hours a day and seven days a week. Ms. Porter, who identified herself as Christian, attends church services, bible studies, and prayer services at the Apostolic Church of God. She would attend church services every Sunday, as well as church related events on Tuesday, Wednesday and Friday nights. It was undisputed that church services were held on Sunday at 9:00 am, 11:45 am, and sometimes 4:00 pm.

Prior to 2005, Ms. Porter had the Sunday and Monday shifts off.  Based on a need in her division at the time, Ms. Porter’s off-days were switched to Friday and Saturday. She requested an accommodation so that she could attend her church services on Sunday. She requested to be switched back to the group with Sundays and Mondays off. The City did not grant her request, but instead offered to change Porter to a later watch on Sundays starting at 3 pm to allow her to attend church services in the morning. Porter filed suit alleging that the reassignment of her off days violated Title VII because it failed to accommodate her religious practices and discriminated against her based on her religion. The City moved for summary judgment arguing that they attempted to reasonably accommodate Porter.

The Seventh Circuit agreed with the district court that the City attempted to reasonably accommodate Porter by offering to change her shift time on Sundays. The Court held that the offer to assign Porter to a later shift on Sunday was sufficient accommodation for purposes of Title VII where the assignment would allow Porter to attend morning church services without affecting her pay or benefits. The Seventh Circuit cited the Supreme Court decision in Ansonia v. Bd. Of Educ. v. Philbrook, 479 U.S. 60,70, 107 S.Ct. 367, 93 L.Ed.2d 305 (1986) and held that Title VII is meant to ensure that an individual can observe religious practices, but is not meant to mandate an employer to grant every accommodation at all costs.

The fact that plaintiff wanted entire Sundays off as her preferred accommodation did not mandate a different result. In fact the Seventh Circuit's holding cites the Supreme Court's decision in Philbrook, where the Supreme Court held that the accommodation need not be  the employee’s preferred accommodation, but only needs to reasonably "eliminate the conflict between employment requirements and religious practices." Philbrook, 479 U.S. at 70.

The Seventh Circuit’s strong opinion should give employers confidence as they encounter issues with employees of any religious background.  If the employer makes a legitimate effort to accommodate the employee’s religious needs, the employer should feel somewhat secure from Title VII liability. Further, in this holding the Seventh Circuit reiterated that the act of offering an accommodation is sufficient if it would reasonably cure the conflict between the employment and religious practice, regardless of whether the employee actually accepts the offer.

 In reiterating the concepts from the Supreme Court’s opinion in Philbrook, the Seventh Circuit continued its pro-business stance.  The Court certainly takes into consideration the difficulties employers face, especially in tough economic times, and will not require an employer to grant every accommodation request. In this holding, instead, the Seventh Circuit has reiterated that employers need only make reasonable efforts to accommodate.

 Of course, in Porter, the accommodation offered was an easy solution because services were held at three different times on Sundays. This holding would not necessarily carry the day if the employee’s religion dictated that she could not work at all that day, or if the accommodation somehow would have affected her pay or benefits.  As the Court noted, an employer cannot be asked to grant every accommodation at all costs, but instead is asked to make reasonable accommodations.  The district courts will certainly continue looking at the facts of each situation and utilizing a balancing test to determine whether the accommodation offered is reasonable, just as Judge Kendall did in this case. Employers need to be aware of this balancing when weighing the accommodation offered against the religious need of the employee.