Monday, March 17, 2014
Bar Business Magazine Features Clark Hill Attorney Jonathan Boulahanis
issuu.com/barbusinessmagazine/docs/mar_2014_bar_business_magazine_issu?e=11263118/7128828
Page 38-39: Is Automatic Gratuity Coming To an End?
Shiftgig Q&A: McDonald's Napkin Suit
Q: Is McDonald’s really being sued for 1.5 million dollars for denying a customer a napkin?
A: Oh Ronald McDonald, you continue to be the butt of every legal joke (Disclaimer: I hate clowns). Between the “beef fries” fiasco, (where Mickey D’s admitted beef flavoring is added to their fries that they boasted as vegetarian in advertisements, resulting in payment to vegetarian groups of over 10 million dollars in a settlement), and the “hot coffee” fiasco (where a 79 year old woman was awarded 2.9 million dollars in damages when she spilled hot coffee on her lap causing third degree burns), McDonald’s has had a rough time with the US court system.
But who lives in the past, right? We have a new, even more outrageous lawsuit to joke about. The NAPKIN suit. All the headlines scream that McDonald’s is being sued over a napkin. However, that’s not the whole story. I was able to obtain a copy of the actual complaint* filed in the case, which explains the Plaintiff’s basis for the suit. Usually, outrageous lawsuits are blamed on the lawyers…. but, for once, my brethren are safe. This is a pro se lawsuit, meaning the Plaintiff filed suit on his own – without a lawyer.
According to the Plaintiff, after being seated with his food, he approached and asked for more napkins. Allegedly, the manager denied him more napkins because he already put them in the bag. Plaintiff alleges that he said “I should have went to eat at the Jack-in-the-Box, because I didn’t come here to argue over napkins, I came here to eat.” Allegedly, the manager started yelling, and Plaintiff asked if he was being yelled at because he was Black. Allegedly, the Defendant responded “You People.” Plaintiff alleges he suffered severe emotional damages and should be compensated to the tune of 1.5 million dollars.
All things considered, I don’t think the lawsuit goes very far, or at least it wouldn't under Illinois law. His claims for intentional infliction of emotional distress, discrimination, slander, and defamation would probably be dismissed for failure to state a claim under the law. Based on his allegations, the conduct likely does not rise to an actionable claim and Plaintiff would have a lot of trouble proving his damages.
So what can be the takeaway from this, if anything? From an employment lawyer’s perspective, this suit is more about alleged discrimination and management responsiveness than the napkin. A proper employee response could have helped diffuse the situation, instead of helping ignite it. Implementing training programs, discrimination policies, and management response training are ways to avoid making a napkin into a million dollar lawsuit.
Jonathan
* View the filed complaint at http://www.huffingtonpost.com/2014/03/04/mcdonalds-sued-customer-napkin_n_4877000.html?ir=Weird+News
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
***This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
A: Oh Ronald McDonald, you continue to be the butt of every legal joke (Disclaimer: I hate clowns). Between the “beef fries” fiasco, (where Mickey D’s admitted beef flavoring is added to their fries that they boasted as vegetarian in advertisements, resulting in payment to vegetarian groups of over 10 million dollars in a settlement), and the “hot coffee” fiasco (where a 79 year old woman was awarded 2.9 million dollars in damages when she spilled hot coffee on her lap causing third degree burns), McDonald’s has had a rough time with the US court system.
But who lives in the past, right? We have a new, even more outrageous lawsuit to joke about. The NAPKIN suit. All the headlines scream that McDonald’s is being sued over a napkin. However, that’s not the whole story. I was able to obtain a copy of the actual complaint* filed in the case, which explains the Plaintiff’s basis for the suit. Usually, outrageous lawsuits are blamed on the lawyers…. but, for once, my brethren are safe. This is a pro se lawsuit, meaning the Plaintiff filed suit on his own – without a lawyer.
According to the Plaintiff, after being seated with his food, he approached and asked for more napkins. Allegedly, the manager denied him more napkins because he already put them in the bag. Plaintiff alleges that he said “I should have went to eat at the Jack-in-the-Box, because I didn’t come here to argue over napkins, I came here to eat.” Allegedly, the manager started yelling, and Plaintiff asked if he was being yelled at because he was Black. Allegedly, the Defendant responded “You People.” Plaintiff alleges he suffered severe emotional damages and should be compensated to the tune of 1.5 million dollars.
All things considered, I don’t think the lawsuit goes very far, or at least it wouldn't under Illinois law. His claims for intentional infliction of emotional distress, discrimination, slander, and defamation would probably be dismissed for failure to state a claim under the law. Based on his allegations, the conduct likely does not rise to an actionable claim and Plaintiff would have a lot of trouble proving his damages.
So what can be the takeaway from this, if anything? From an employment lawyer’s perspective, this suit is more about alleged discrimination and management responsiveness than the napkin. A proper employee response could have helped diffuse the situation, instead of helping ignite it. Implementing training programs, discrimination policies, and management response training are ways to avoid making a napkin into a million dollar lawsuit.
Jonathan
* View the filed complaint at http://www.huffingtonpost.com/2014/03/04/mcdonalds-sued-customer-napkin_n_4877000.html?ir=Weird+News
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
***This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
Thursday, March 6, 2014
Q&A: Weird Bar Laws
Q: Is it really against the law to serve tap water unsolicited in NYC? Are there other quirky laws affecting restaurants or bars across the country?
A: Believe it or not, serving unsolicited tap water to a customer was illegal in NYC until just this month. Provision (a) of Section 20-08 of Chapter 20 of Title 15 of the Rules of the City of New York Governing and Restricting the Use and Supply of Water banned restaurants from providing water to patrons without them asking. It was instituted in the 1990’s to conserve water during a drought. With only 14 warnings issued since it was instituted, it is clear that this law was rarely enforced, like driving 37 MPH in a 35 MPH zone. NYC isn’t alone. Other states and cities have laws on the books that make people scratch their heads. Here are some of the best of the best: Utah: Until 2009, patrons had to apply for memberships to local bars so they could legally drink alcohol. That law was repealed, but it still forbids ordering doubles and mixing cocktails in front of patrons. Indiana: “Blue Laws” are still in effect which do not allow alcohol to be sold for carry-out on Sundays, in order to keep Christian principals alive and well.
Kansas: 29 counties still do not allow the sale of individual glasses of liquor. Illinois: Does not allow happy hours, or any program that discounts alcohol for a certain amount of time. Any discount must be for all customers, all day. Colorado: Horses are considered vehicles, so you can get a DUI on horseback. New Orleans: You CAN carry your drink from one bar to another. Texas: You can be arrested for public intoxication inside of a bar. Take a bite out of that.
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
***This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
Saturday, March 1, 2014
Shiftgig Q&A: If a drunk patron injures someone when leaving your establishment, you or your employees could be responsible
Q: Who can be held responsible if a drunk patron leaves an establishment and injures themselves or another?
A: The short answer is, potentially the bartender, server, manager, owner, and/or the establishment. This is called “Dram Shop” liability, and most states have enacted laws on the topic. “Dram Shop” is a term that now refers to any establishment serving alcohol on premises. Historically, the term was used as early as the 1400’s, and referred to a dram, or a small unit of liquid. Medieval patrons would order spirits by the dram.
The basic premise is that states have enacted laws that could hold the bar, the owner, or the server financially liable if they serve alcoholic drinks to a visually intoxicated customer, and that customer injures someone. The strictest laws in the country even call for social hosts to be potentially liable.
Typically, the situation is as follows. A customer/guest either comes into the establishment intoxicated and is served a drink, or drinks to the point of visible intoxication at the establishment. The intoxicated patron then gets into their car, leaves and injures someone in a motor vehicle accident.
The difficulties that arise for owners, servers, and establishments, is how can you tell when someone has had too much, and what steps can you take to limit liability? There are several tips. First, training programs for servers are good for both management and servers (and even for hosts, security, and valets). The ability to recognize intoxication, and stop service of an individual is absolutely essential. The National Restaurant Association offers a great training program called ServSafe. Second, management should create an official policy for safe alcohol consumption. If a server has any question regarding a patron, a member of management should be contacted and follow the policy in place. Third, taxi numbers or alternate transportation should always be made readily available.
Finally, it is extremely important to recognize that the laws have given you a heightened responsibility over your customers as an employee of the service industry. Whether it is fair or not, the law looks to you to make judgment calls in order to prevent people from being injured. I would caution that employees take this responsibility seriously, and always be alert, avoid drinking on the job, and be knowledgeable about the laws in your state. Not only does that help you keep your job and keep your establishment up and running, but it is also an important step to help prevent tragic accidents in your community.
The National Conference of State Legislatures has put together general informational summaries of Dram Shop laws for all fifty states, and you can view your state’s Dram Shop law at http://www.ncsl.org/research/financial-services-and-commerce/dram-shop-liability-state-statutes.aspx
Jonathan
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
***This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
A: The short answer is, potentially the bartender, server, manager, owner, and/or the establishment. This is called “Dram Shop” liability, and most states have enacted laws on the topic. “Dram Shop” is a term that now refers to any establishment serving alcohol on premises. Historically, the term was used as early as the 1400’s, and referred to a dram, or a small unit of liquid. Medieval patrons would order spirits by the dram.
The basic premise is that states have enacted laws that could hold the bar, the owner, or the server financially liable if they serve alcoholic drinks to a visually intoxicated customer, and that customer injures someone. The strictest laws in the country even call for social hosts to be potentially liable.
Typically, the situation is as follows. A customer/guest either comes into the establishment intoxicated and is served a drink, or drinks to the point of visible intoxication at the establishment. The intoxicated patron then gets into their car, leaves and injures someone in a motor vehicle accident.
The difficulties that arise for owners, servers, and establishments, is how can you tell when someone has had too much, and what steps can you take to limit liability? There are several tips. First, training programs for servers are good for both management and servers (and even for hosts, security, and valets). The ability to recognize intoxication, and stop service of an individual is absolutely essential. The National Restaurant Association offers a great training program called ServSafe. Second, management should create an official policy for safe alcohol consumption. If a server has any question regarding a patron, a member of management should be contacted and follow the policy in place. Third, taxi numbers or alternate transportation should always be made readily available.
Finally, it is extremely important to recognize that the laws have given you a heightened responsibility over your customers as an employee of the service industry. Whether it is fair or not, the law looks to you to make judgment calls in order to prevent people from being injured. I would caution that employees take this responsibility seriously, and always be alert, avoid drinking on the job, and be knowledgeable about the laws in your state. Not only does that help you keep your job and keep your establishment up and running, but it is also an important step to help prevent tragic accidents in your community.
The National Conference of State Legislatures has put together general informational summaries of Dram Shop laws for all fifty states, and you can view your state’s Dram Shop law at http://www.ncsl.org/research/financial-services-and-commerce/dram-shop-liability-state-statutes.aspx
Jonathan
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
***This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
Tuesday, February 25, 2014
Q&A: TABLES WALK OUT, WHO IS RESPONSIBLE?
By: Jonathan Boulahanis
Q: My servers dropped two trays of expensive wine glasses, and I had three tables walk out on my restaurant last night. What am I supposed to do? Can I have the servers pay for these mistakes out of their tips?
A: First, deep breath and remember everyone has those kinds of days. When serving, I once tripped and fell dropping an entire tray of food and standing up covered in cheeseburgers and chili. The 3 year old at the table loved it, but my boss sure didn’t. You shake it off (literally when it comes to chili in your shirt). In my case, my boss wrote it off as an accident. That being said, those “accident” costs add up to management. Remember, restaurants make the smallest profit margin of any business in the country.
When these situations happen to your employees, it is tempting to try to make them share in the loss. This is a dirty little secret in the restaurant industry – some employees are made to pay for the mistakes out of their pockets. However, it is illegal to dock the server’s tips for the walkouts or the broken dishes. While the Fair Labor Standards Act, doesn’t flat out say this practice is illegal, courts have interpreted the language of the statute to determine that the practice is illegal. A federal district court in Texas* held that a restaurant violated the FLSA by improperly deducting servers’ wages for unpaid checks and cash register shortages, and a federal district court in Miami** agreed. Some states, like California, Massachusetts, and New York specifically prohibit charging employees for spoilage, breakage, cash shortages, or losses.
So what is an employer to do? Remember, First, avoid the tip docking practice. Aside from the wage and hour issues outlined above, the practice could also open up the establishment to liability for discrimination or retaliation if some employees are treated differently. The safer way to handle the situation is to have a progressive discipline policy in place, with the same punishment for employees that are repeat offenders, such as changes to the schedule, loss of a shift, or in extreme circumstances - termination.
Jonathan
* Bernal v. Vankar Enters., 579 F. Supp. 2d 804, 810 (W.D. Tex. 2008).
** Brennan v. Haulover Shark and Tarpon Club, Inc., No. 74-1276-Civ., 1986 WL 587 at *16 (S.D. Fla. Jan. 27, 1986).
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
*This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
Friday, February 14, 2014
Shiftgig Q&A: Does Server have to pay for credit card processing fees?
Q: Who is responsible for paying the credit card fees charged by credit card companies – the business, the employee, or the customer?
A: As the days of “Cash Only” signs in the windows are dying out and the world is becoming more and more reliant on credit cards to pay for goods and services, this question is becoming increasingly asked. Credit cards make money in several ways, including usually on a percentage fee per transaction. Most people don’t think about the credit card’s cut from each purchase, but it ends up being a huge amount. Using a food analogy, it’s like the little corner piece of a pizza cut into square pieces. With all the pizzas sold around the world, those little corner pieces add up to a gigantic piece of the pie pretty quickly.
As for who is responsible for paying that percentage, the credit card companies have a contractual relationship with the business providing the good or service, i.e. the restaurant, bar or hotel. However, legally, the business can choose to pass the charge on to its employees or to the consumer.
Increasingly, restaurant and bar employees are seeing their employer subtracting the credit card percentage fee against their tips on credit card transactions. That action is permitted under the Fair Labor Standards Act (but may violate state law, depending what state you are in). Under the FLSA, for example, where a credit card company charges an employer 2 percent on all sales charged to its credit service, the employer may pay the tipped employee 98 percent of the tips. The caveat is that the reduction may not reduce the employee's wage below the required minimum wage.
The businesses are also now allowed to pass the charge onto consumers based upon the settlement of a class-action lawsuit in 2013. Prior to that, most credit card companies did not allow the practice. Now, a business can add a disclosed surcharge fee for credit card purchases to the final cost of a good or service.
As has been a theme so far in the Weekly Legal Bites column, the “can they?” and “should they” questions result in different analysis. If the business charges the credit card processing fee against the tipped employees, it could be an accounting nightmare. The business likely pays a different percentage fee on each type of credit card, and must deduct the correct amount from each charge against each employee. It could require overhaul of existing systems and require substantial bookkeeping changes. If the business passes the charges to the consumers, they may lose a competitive edge on prices, as many big box retailers refuse to pass that charge on to customers.
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
*This article was posted as part of a question and answer series that Jonathan Boulahanis is conducting with Shiftgig.com. The article, as well as all other articles in the series, can be found at http://www.shiftgig.com/articles.
Thursday, February 6, 2014
Batali Settlement (Shiftgig Q&A)
This Q&A series is presented weekly on shiftgig.com/articles - check it out for the latest installment in the Weekly Legal Bites series.
Q: I read that Mario Batali and Joe Bastianich settled a lawsuit for 5.25 million dollars with their employees. What happened and why was the settlement so much money?
A:
TV celebrity chefs Mario Batali and Joe Bastianich must have thought they walked out of the TV shows that they regularly appear on, and onto the set of Gordon Ramsay’s Kitchen Nightmares when they signed the settlement papers. Batali and Bastianich were the targets of a class-action suit brought by almost 1100 employees from seven New York area restaurants that they own. According to the complaint filed in federal court in New York, Batali and Bastianich’s restaurants retained 4.5% of the tips from the server/bartender’s nightly wine sales. The restaurant said it was using the money for training, research on wine, and replacing wine glasses. Honestly, it didn’t matter the reason, the policy on its face likely violated the Fair Labor Standards Act.
Restaurants and bars are one of the trickiest industries for payment of wages because of the unique phenomenon of the tipped employee. The government allows for tipped employees to be paid less than the normal minimum wage. If you’re a server or bartender, you probably notice that your hourly rate is lower than the $7.25 federal minimum wage (higher in some states). That is called the “tip credit,” and employers get to reduce the minimum wage by over $5. However, the Fair Labor Standards Act makes clear that a tip is the sole property of the employee, and prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. The only recognized exceptions are tip pooling/sharing arrangements amongst tipped employees.
So what happened with Batali and Bastianich’s restaurants? The alleged policy to keep 4.5% of the employees’ tips from nightly wine sales was illegal on its face, which put them in a very undesirable legal situation. The penalties for taking the tip credit when deducting wages from over 1100 employees is what got the settlement amount up around the nightclub tab for a Miami Heat NBA Championship party. The lesson? Tips are employee property, and the wage and hour protections of the Fair Labor Standards Act have some bite to them.
Jonathan
Jonathan Boulahanis is an attorney in the Chicago office of Clark Hill PLC and is a leader of the firm’s Food and Beverage team. Since Jonathan can’t cook like his Italian mother and the fast food was going to his hips, he became a self-proclaimed foodie. As an attorney, he has made a commitment to serve the food and beverage industry, no pun intended, by representing restaurants, bars, individuals, and other food and beverage businesses with various legal issues as they arise. You can reach him by sending an email to submissions@shiftgig.com.
LEGAL DISCLAIMER:
The responses provided in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of this blog does not create an attorney-client relationship between Jonathan Boulahanis or Clark Hill PLC and the user.
Subscribe to:
Posts (Atom)