Chapter 1

Prevention
Philosophy
 Prevention Philosophy
The Future Hospitality Manager and the
Legal Environment
The Hospitality Manager and Legal
Management
Preventative Legal Management
Ethics and the Law

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 In This Chapter, You Will Learn:

1. Why a study of laws related to hospitality is

important.
2. The historical origins of the law and its
evolutionary nature.
3. A philosophical framework to help prevent
legal difficulties before they begin.
4. How to evaluate management actions on an
ethical basis.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Future Hospitality Manager
and the Legal Environment
Unique and diverse operating environment
Estimated that 60 - 70 percent of
decisions made daily has legal dimension
Those decisions influence the potential for
litigation

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Future Hospitality Manager
and the Legal Environment

Legalese:

Attorney - Any person trained and legally

authorized to act on behalf of others in
matters of the law.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Future Hospitality Manager
and the Legal Environment
Legalese:

Litigation - The act of initiating and

carrying on a lawsuit. Often, used to
refer to the lawsuit itself.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Hospitality Manager and
Legal Management
Legalese:

Law - The rules of conduct and

responsibility established and enforced
by a society.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Hospitality Manager and
Legal Management
1. Know the historical origins of the law.
2. Recognize that laws have an evolutionary
nature, based on changes in society.
3. Understand how to use a philosophy of
preventative management to manage
the legal environment and minimize the
chances of litigation.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Historical Origins of the Law

Legalese:

Common Law Laws derived from

historical customs and usage of a
society, and the decisions by courts
when interpreting those customs and
usages.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Historical Origins of the Law

Legalese:

Civil Law The body of law (usually in

the form of codes or statues) created by
governmental entities that are
concerned with private rights and
remedies, as opposed to criminal
matters.
2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Evolutionary Nature of
Common Law
Legalese:

Hospitality Law - Those laws which relate

to the industry involved with the
provision of food, lodging, travel and
entertainment services to its guests and
clients

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Historical Origins of the Law

Common law
Civil law
Criminal law
Changing society
Federal, state, and local

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Search the Web 1.1
Log on to the Internet and enter www.findlaw.com
1. Select: U.S. State Resources
2. Select: US State Codes
3. Select Your State.
4. Search for categories related to laws regulating tobacco
use and sales in your state.
5. Draft a one-paragraph essay summarizing the laws
governing tobacco use in your state. Are there any
special stipulations that a hospitality manager would
especially want to be aware of (such as the designation
of smoking and non-smoking areas in a restaurant or
public lobby)?
2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Preventative Legal Management

STEM
The Tide of Litigation

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 What Is STEM?

A process that can be implemented

that will reduce employee errors and
omissions - and litigation.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Components of STEM

Select
Train
Educate
Manage and Motivate

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 STEM the Tide of Litigation

Legalese:

Liable To be legally responsible or

obligated.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Select

Select the right employee for the

specific job.
Cannot just hire anyone at the last minute.
Cannot just hire anyone anymore.
Use specific job qualifications, written job
specifications, and information derived from a
thorough investigation for all candidates.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Applications
Ask job-related and legally acceptable questions.
Review the application form for obvious problems.
Note any large gaps in employment, or frequent job
changes.
Contact the applicant immediately to answer
questions.
Ask the applicant to sign an authorization and
release form for checking references.
Dont just hire anyone, be selective.
negligent hiring

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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Checking the Applicants Records
Interview the applicants former manager by phone
to:
Check the facts on the application form.
Probe for information.
Ask about how the applicant interacted with other
employees.
Ask if the employee left on good terms and is eligible
for rehire at that company.
Check the applicants educational record, credit
rating, and criminal convictions.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Testing Applicants

Hiring Tests
Must be legal and valid.
Must comply with Civil Rights Act of 1964 and
the Americans with Disabilities Act of 1990.
Must not be biased against anyone because of
race, color, religion, age, sex, national origin,
or disabilities.(exception: bona-fide
occupation qualification).

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Train and Educate
These two aspects are interrelated.
Train your employees the right way to
perform the task(s) the first time. It is easier
to train than to retrain.
Ensure that the trainer is properly trained
himself/herself.
Remember, it is the evidentiary trail that wins
lawsuits, not who is right or wrong.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Train and Educate
Educate yourself about new trends,
technological innovations, laws, and rules
and regulations which impact your
industry.
Now you are in a better position to train your
employees about important changes.
You are in a better situation to compete in the
industry.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 The Training Trail
What was taught?
Who was taught?
How was the training conducted?
When was the training provided?
How did you determine its effectiveness?
The evidentiary trail.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Some Current Litigation Trends

Negligent retention
Negligent supervision
Failure to properly train

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Positive Management and
Employee Loyalty

How to become a positive manager and build

employee loyalty.
raise employee morale and self-esteem
reduce turnover
enhance service
enhance customer satisfaction
reduce litigation
enhance the bottom line
2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Proper Management and
Motivation
As a manager - Lead by example!
Todays culturally diverse workforce will
require diverse motivating techniques.
People are motivated by different things.
Find out what it is that motivates your
employees.
Involve employees in the process.
Ask your employees how you are doing as a
manager.
2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Analyze the Situation 1.1
A fellow supervisor and friend confides in
you that that he has been arrested a second
time in two years for driving under the
influence of alcohol. His current case has not
yet gone to trial. This supervisor is
responsible for the late-night closing of the
restaurant in which you both work. You know
bars in your city close at 2:00 A.M., the same
time the restaurant closes.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Analyze the Situation 1.1

1. Should you discuss this situation with

the restaurant's General Manager?
2. Which aspect of STEM is relevant
here?

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Ethics and the Law

Legalese:

Ethics Choices of proper conduct made

by an individual in his or her
relationships with others.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Ethical Situation
Assume that you are the Food and
Beverage Director of a large hotel. You are
planning for your New Years Eve gala, and
require a large amount of wine and
champagne. You conduct a competitive
bidding process with the purveyors in your
area, and, based upon quality and price, you
place a very large order (in excess of
$20,000) with a single purveyor.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Ethical Situation

One week later, you receive a case of very

expensive champagne, delivered to your
home with a nice note from the
purveyors representative stating how
much they appreciated the order and that
they are really looking forward to doing
business with you in the years ahead.
What do you do with the champagne?

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Ethical Situation

Ethical Analysis
Your first thought may be the most obvious
one; that is, you drink it. But hopefully, you
will first ask yourself the seven questions of
the ethical decision-making process.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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Ethical Decision-Making Process

1. Is it legal?
Does either the law or company policy prohibit this activity?

2. Does it hurt anyone?

Will this action negatively impact any stakeholders?

3. Is it fair?
To all the stakeholders

4. Am I being honest?
With yourself, and with the company

5. Would I care if it happened to me?

6. Would I publicize my action?
What if all the stakeholders became aware of your action?

7. What if everyone did it?

Could the business effectively operate in an equitable fashion?

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 What Would You Do?

Assume that your local municipality is

considering the passage of a law that
would prohibit the sale of all tobacco
products from the interiors of bars and
restaurants, but not grocery stores. The
restaurant you manage has a cocktail
lounge, and cigarettes are both consumed
and sold in that section of your restaurant.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 What Would You Do?

There is no current effort to prohibit

smoking in cocktail lounges, such as the
one you operate. You are considering
whether to address the local government
body charged with creating such
legislation:

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 What Would You Do?
1. What are the major considerations you
will think about before you decide to
support or oppose the proposed
legislation?
2. Will the fact that you do or do not smoke
influence your position?
3. Which ethical issues are in play here?

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Rapid Review
1. Prepare a five-minute training session for your
staff that emphasizes the importance of
prevention, rather than reacting to, legal liability.
Give an example of a situation where this might
arise.

2. Give an example, other than the one mentioned in

the text, of a recent change in federal, state, or
local law that has impacted the hospitality
industry. Explain why you believe the law was
enacted and whether you believe it was good
legislation.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Rapid Review
3. Give a hospitality example of the importance that
selection makes in the STEM process.
4. Give a hospitality example of the importance of
teaching in the STEM process.
5. Give a hospitality example of the importance of
education in the STEM process.
6. Give a hospitality example of the importance that
managing makes in the STEM process.

2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
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 Rapid Review
7. A vendor has agreed to clean your hotel carpets at a
very competitive price. In a telephone conversation
with you, the vendor states that if it gets the contract,
will do your home carpets once a year as a thank-
you. Apply the seven criteria for ethical behavior to
this situation.
8. Using the World Wide Web, locate a state law of any
type that relates to business operations. Use your
search engine to help. Keywords to use include
state, laws, and business. Describe the law in a
one-paragraph essay.
2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc.
All Rights Reserved