Industry News

"Card Check" Bill Awaits Senate Vote

The Employee Free Choice Act (the "Card Check bill"), currently pending before Congress, would require the NLRB to certify a union as the collective bargaining representative without an election upon a showing that a majority of employees in the unit have authorized the union as their collective bargaining representative through a card check. The House of Representatives approved the bill on March 1, 2007 and the bill is currently awaiting a vote from the Senate; President Bush has already indicated that he will veto the bill.

Mandatory Sick Leave Becoming A Hot Legislative Topic

On February 5, 2007, a San Francisco ordinance which mandates that employers provide paid sick leave went into effect. Several states (Maine, Maryland, Michigan, Montana, Vermont and Wisconsin) are expected to pass similar legislation, and Congress is considering legislation which would require employers with 15 or more employees to offer at least 7 paid sick days annually to employees.

Lack Of Human Capital Becoming Serious Issue For Hotel Owners, Operators

[Reprinted with permission of Rick Swig, president of RSBA & Associates]

When the spotlight is on resources, the issues generally tilt toward the financial or natural ones. Yet the most challenging shortage now might be of human capital.

Human resource issues in the hotel business have traditionally been about training to provide guest satisfaction, which has a direct correlation with price/value, return guest ratios, brand reputation and ultimately, financial performance. There has also been a spotlight on employee satisfaction, since a happy worker presents a picture of contentment to hotel guests, which results in better delivery of service.

The inverse of that is high employee turnover, which can undermine financial stability on multiple levels.

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San Diego, San Antonio And Tampa Are Hot For Hotel Development

[Reprinted with permission of Crittenden Research, Inc.]

San Diego, San Antonio and Tampa are hot for hotel development. Expect these markets to lead nationwide development with a combination of booming tourist, commercial and conference demand. The cities have the largest percentage of guestrooms in the pipeline, compared to rooms online, of any cities in the country. And those pipelines should steadily increase through 2008. Hoteliers need not worry, however, as the markets have one thing in common - the demand to absorb new inventory.

The national pipeline is at an all-time high and nearly double the low established in Q4 2003, but supply still probably won't outweigh demand or greatly affect room inventory until 2009 or later. Lodging Econometrics President Pat Ford believes 2007 will be another strong record-breaking revenue year with gains in occupancy and ADR. The firm scaled back its pipeline to 3,570 projects totaling 489,380 rooms in early Q3 2006. This is after a blazing 2005 and 2006 where the pipeline grew at an accelerated pace. What does this mean? And how does it affect hoteliers? In terms of immediate impact, this slight decline shouldn't mean much as it represents many unapproved or postponed projects. But it could be a good sign for developers that pipeline growth will extend later into the decade.

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Legal Update

Disloyal Criticism Of Employer Not Protected By NLRA

The D.C. Court of Appeals ruled that a non-union employer acted lawfully in terminating a worker for criticizing the company's layoff decisions and for disparaging the ability of its management personnel, despite the worker's claim that he was engaging in "concerted activities" at the time of the comments.

In this case, the worker had made comments to a local newspaper in which he opined that the employer's mass layoff decision would "hurt the company over the long term" and left "gaping holes" in the company. The worker also posted comments on a website which disparaged management: "This business is being tanked by a group of people with no good ability to manage it. They will put it into the dirt . . .." In that same posting, the worker expressed that a union may be the answer. The employer discharged the worker shortly after these comments were posted.

Overturning an NLRB decision which held that the worker's conduct constituted protected "concerted activities" within the meaning of Section 7 of the NLRA, the Court of Appeals found that the worker's statements were "a sharp, public, disparaging attack upon the quality of the company's product and its business policies" which were "disloyal, disparaging and injurious" to the employer and thus were not protected under the NLRA. Endicott Interconnect Technologies, Inc. v. NLRB (D.C. Cir. July 14, 2006).

Appeals Court Confirms That NLRA Applies To Tribal Casinos

In San Manuel Indian Bingo & Casino v. NLRB, the D.C. Court of Appeals affirmed the NLRB's decision which held that the NLRA applies to a tribal casino operation in California. The Court determined that the operation of a casino is not a "traditional attribute of self-government" and the majority of the casino's employees and customers were not tribal members, and thus the NLRB properly determined that the tribal casino fell within the NLRA's definition of "employer." San Manuel Indian Bingo & Casino v. NLRB, (D.C. Cir. February 9, 2007).

Broad Confidentiality Policy Violates NLRA

In Cintas Corp. v. NLRB, the D.C. Circuit Court of Appeals recently held that an employer committed an unfair labor practice by merely publishing its policy on confidentiality. The court held that the policy, which required employees to maintain the confidentiality of information about the company and its employees, interfered with employees' rights to discuss the terms and conditions of employment. Although the policy did not specifically prohibit employees from engaging in protected activity, the court determined that employees could reasonably read the rule to prohibit activity protected by the NLRA. In light of this decision, employers should review their confidentiality policies to ensure that protected activities are specifically excluded from the scope of the policies. Cintas Corp. v. NLRB (D.C. Cir. March 16, 2007).

Closing Thoughts

Tip vs. Service Charge

A "tip" (meaning "To Insure Promptness") is an amount of money left by a guest in the guest's sole discretion, after a service has been rendered, in recognition of good service. A tip belongs to the employee and the house is prohibited from keeping any part of the money without the employee's consent.

On the other hand, a "service charge" is an amount determined and imposed by the house before the service is rendered. A guest must pay this charge regardless of the quality of service rendered. Service charges belong to the house and are income to the house, even if the house later distributes some or all of the service charge to employees. A house is not required to share any part of a service charge with employees.

The distinction between tips and service charges is important, especially in the hospitality industry where tips and service charges make up a good portion of employees' incomes. Employees who serve guests should understand this distinction, and if the house is retaining a portion of any service charge, guests should understand that as well.

Hotels A Prime Target For Identity Thieves

Identity theft is a growing and serious concern for everyone. The hotel environment is particularly vulnerable, as many business travelers travel with their laptop computers or PDAs, which often contain personal and confidential information. In addition, hotel folios which may contain personal information are often discarded at the hotel or are left in guest rooms.

To combat the problems of identity theft, hotel policies and procedures regarding personal information should be audited to ensure that there are no potential problem areas and hotel employees should be vigilant in safeguarding guest information. For example, during conference meeting breaks, doors should be secured to prevent improper access to guests' laptop computers or guests should be instructed to keep their laptops and PDAs with them. Personal information should be removed from folios if such information is unnecessary, and discarded papers containing personal information should be shredded.

If a guest does complain that his or her personal information may have been compromised, a hotel should take any and all steps necessary to rectify the situation. The guest should be instructed to contact the FTC to report the suspected theft (1-877-IDTHEFT or www.consumer.gov/idtheft).