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Restaurant Law Updates

Providing restauranteurs and hospitality industry companies with “news they can use.”

Gentry Locke attorneys serve clients in Virginia in the restaurant and hospitality industry with our counsel, litigation, and business experience for matters relating to business formation and structuring, contracts and agreements, franchises, compliance with employment and regulatory agencies, and trademark and trade secret protection.

Below are some articles and alerts we feel can help you stay ahead of the industry curve in how you do business.

Industry-related articles, alerts, and cases of interest

  • Fast food chain held responsible for Manager strip-searching an employee: The Kentucky Court of Appeals upheld a $6.1 million verdict against a worldwide fast food restaurant chain after an 18-year-old employee was strip-searched and sexually assaulted by the assistant manager and others. The strip search was directed via telephone by a caller impersonating a police officer. The case charges that the corporation knew of other such hoax calls but failed to warn its employees prior to the Kentucky assault.
  • Mom & Pop restaurant chain fined over $2 million for FLSA violations: A husband and wife who owned five oriental restaurants were ordered to pay $2,030,430 in back pay and damages for violating the Fair Labor Standards Act (FLSA). In this lawsuit filed by the U.S. Department of Labor, the couple violated the act by failing to pay 129 employees across their five restaurant locations minimum wage and overtime pay, and failing to keep adequate and accurate pay records.
  • Sexual Harassment of Women at Restaurant: A nationwide full-service restaurant chain will pay $250,000 to settle a U.S. Equal Employment Opportunity Commission suit claiming sexual harassment. The EEOC charged that a general manager subjected female employees to unwelcomed sexual harassment, which included sexual proposition, sexually explicit comments about their appearance, and disagreeable comments about women in general.
  • Sexual Harassment of Men at Restaurant: A national dessert-based full-service restaurant chain will pay $345,000 to settle a U.S. Equal Employment Opportunity Commission suit alleging that the restaurant allowed same-sex harassment of male employees in its Chandler, Arizona, location. The $345,000 settlement represents an amount ranging from $15,000 to $175,000 that will be separately paid to six former male employees.
  • Sexual Bias Against Men for Server Positions: A steakhouse restaurant will pay $1,025,000 to settle a U.S. Equal Employment Opportunity Commission suit alleging that the restaurant had a longstanding practice of not hiring men in food server positions; instead, its company policy was to hire only women for food server positions. EEOC Acting Chairman Stuart J. Ishimaru stated, “this case should remind corporate America that employment decisions must be based on merit and ability to do the job – not on gender stereotypes.”
  • Over 20,000 former employees may be affected by $19 million sexual discrimination suit: A full-service steakhouse chain with locations in 20+ countries will pay $19 million to settle a EEOC suit alleging that the restaurant engaged in a pattern of discrimination that prevented female employees from gaining promotions to management positions.
  • Contesting unemployment benefit claims can be viewed as retaliation: A federal magistrate judge in Richmond has ruled that a retaliation claim can be pursued by a former employee who claimed that her former employer unjustifiably contested her claim for unemployment benefits. The employer argued that no retaliation claim could be brought simply because it chose to contest a former employee’s claim for benefits under state law. The Court disagreed.
  • Keep up with COBRA changes: The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives certain workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances. These circumstances include voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. COBRA Update page (www.gentrylocke.com/cobra)
  • Keep up with Immigration Forms and Filing rules: In late 2009, the U.S. Department of Homeland Security (“DHS”) rescinded regulations which were designed to create a safe harbor for employers who took specific steps in response to receiving an “Employer Correction Request” from the Social Security Administration (“SSA”). These requests are more commonly referred to as a “no-match” letter.

Restaurant Industry Links

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