Archive for the ‘legal and liability issues’ Category

Can This Be a Risk-Reward for Club Managers?

Monday, February 9th, 2015

Risk-Reward is a commonly heard term when discussion a golfer’s choice of shots in a competitive match.  In taking a significant risk of failure, the golfer can go for the green and, if successful with a challenging shot, reap the reward of a better score.  In the financial world “risk-reward” is used to describe the potential for greater gain by taking a riskier position.

The underlying connotation is often a gutsy decision based on the elevated risk of failure.  Such a gamble may be appreciated, even applauded, when the stakes – whether winning the match or scoring big in the commodities market – are personal, that is, the downside impacts only the person taking the risk.

In the club management profession, though, the actions of the manager impact the welfare and investment of the club’s members, so decisions affecting the club’s performance and solvency should be made with care and full consideration of all risks involved.  Certainly this is what conscientious managers do every day while diligently managing the operation, meeting the budget, ensuring the club continues as a going concern, and planning strategically for the club’s future.

As every club manager knows, such strategic planning requires careful evaluation of the strengths and weaknesses of the club, as well as seeking those opportunities that offer greater success and security while recognizing and avoiding potential threats to the organization’s viability.

While there may be some sizeable external threats to a club such as competition from a new club with more extensive and up-to-date amenities or the closing of a large employer in the community resulting in the loss of members, there are far more significant threats within the club’s operations – the unappreciated and often ignored potential for legal action as a result of unaddressed liability issues.

Such issues usually arise from one of two causes:

1.   Managers and supervisors, intentionally but more often inadvertently, violating federal, state, or local laws and ordinances relating to the workplace.

2.   Lawsuits by members, applicants for membership, current or former employees, vendors, visitors to the property, community members, or club neighbors for almost any complaint imaginable, but most often related to club operations, ill-advised operational or board-mandated policies, or alleged negligence on the part of the club or its employees.

In the first instance, the underlying problem is often poorly-trained managers or supervisors who are unfamiliar with the detail and nuance of a wide variety of regulatory requirements such as the Fair Labor Standards Act, the Occupational Safety and Health Act, Equal Employment Opportunity/Discrimination, and others.  See Legal and Liability Issues for more information.

While it is in every manager’s best interest to be familiar with the basics of such regulation, it is the absolute responsibility of the club to properly train their management and supervisor employees in the full scope of their duties.  This can accomplished by a combination of establishing and making available detailed club standards, policies, and procedures covering all areas of concern (for an example see Club Personnel Standards, Policies and Procedures) and by providing sufficient indoctrination and ongoing refresher training and reminders of these important requirements (for examples see Managers Handbook and On the Go Training).  Doing anything less is a form of management malpractice and, given the potential for significant fines and penalties, as well as the damage to the club’s reputation, is a risk that must not be ignored.

In the second case of lawsuits arising from a broad range of issues, the burden is again on management to be familiar with existing case law that has created a fairly broad picture of the legal risks of operating a private club and a clear indication of actions and safeguards to put in place to avoid such suits.  See Book Review – Club Litigation Book – Keeping Clubs Out of Court for a comprehensive review of club litigation and steps to take to avoid lawsuits.

Managers must understand that while lawsuits are relatively infrequent occurrences, they most frequently spring from loosely-operated establishments that have not considered and planned for known or potential contingencies.  Finally, the cost of defending from litigation and the size of potential judgments can be an existential threat to the ongoing operation of the club.

Bottom Line:  Risk-Reward can be a gutsy play on the golf course, but ignoring the legal and liability risks to a club can have a devastating downside for which there is no reward.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

Guest Blog: Be Our Guest, Maybe

Monday, September 29th, 2014
glenn-a-gerena-photo-335933Club management’s challenge in structuring a guest policy is balancing competing interests reflected in the following hypothetical comments:Member A: “I acquired my membership so I can play golf with my friends, so don’t restrict me from playing with them.”Member B:  “Member A has played golf with the same guy 10 times.  His friend should get his own membership.”Member C:  “I want my brother and his wife from Boston to play the course on Friday, but I can’t join them.”Member D:  “I keep seeing non-members playing the course.  I thought this club is private.”Membership Committee Chair:  “We need to introduce the club to new prospects through our guest program.”Guest rules and policies should properly balance the interests reflected in these comments, taking into account the nature of the club, the membership and the club’s business goals.

Specific provisions may include:

  • Prohibition or restriction on unaccompanied guest play;
  • Provision for host committee to play golf with members’ guests when the sponsoring member is not available;
  • Restriction on number of times a person can be a guest in a year;
  • Black-out of peak periods when guests are not permitted;
  • Restriction on number of guests at one time; and
  • Rule governing payment of guests’ charges; and
  • Special rules or fees for extended family and/or houseguests.

Club management can take measures to minimize problems and maximize guest program benefits.  First, management should strictly enforce guest adherence to dress codes and guest rules to minimize member objections.  Second, the club should invest in software to track guests both for purposes of enforcing limitations and identifying membership candidates.  Third, the club’s guest policies should be regularly communicated to members and prospective members to avoid surprises and embarrassment to members and their guests.

Most clubs welcome members’ guests, but sometimes the welcome mat needs some definition.

Author:  Glenn A. Gerena, a shareholder with the national law firm of Greenberg Traurig, P.A., concentrates his practice on structuring, documentation for, and restructuring club membership programs.  You can read more about the author at http://www.gtlaw.com/People/GlennAGerena, and read more club related articles by the author at http://www.hospitalitylawcheckin.com.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Guest Blog: It’s Not Just Dodgeball – The Claremont Club Case*

Monday, April 14th, 2014

This decision illustrates both the general risk of club liability when liability waivers are unclear and when a club does not follow its written management policies and the unique risk of club liability when a club offers child care. In this case, a member’s child was injured playing dodgeball in the club’s childcare program.  The trial court ruled that (i) a release signed by his father barred the claims, (ii) there was no evidence showing the club’s conduct amounted to gross negligence, and (iii) the injuries were an inherent risk in dodgeball.  A finding of gross negligence was relevant because in California, a liability release for gross negligence is generally unenforceable.  In an unpublished opinion, the Court of Appeals reversed and held that there were triable issues of material fact regarding each of the trial court’s findings.

Releases

The appeals court believed that there were triable issues of fact related to the release, because it was unclear whether the father released claims related only to the father’s facilities use or also the family’s facilities use and whether a release of liability for personal injury from “Club activities” included dodgeball, which was not among the list of activities in the membership information form.   The appeals court also believed that there were triable issues of fact as to whether a release with respect to child care was void against public policy.

Gross Negligence

The appeals court believed that there were triable issues of fact as to whether the club was guilty of gross negligence when (i) club employees knew racquetball courts were being used for dodgeball against club policy, (ii) the club did not implement safety rules for the game, (iii) the children were supervised by an 18 year old front desk clerk with no childcare training, and (iv) the 18 year old participated in the dodgeball game and played in an aggressive way.

Inherent Risk of Game

The appeals court believed that there were triable issues of fact as to whether the child assumed the risk in participating in an inherently risky activity because the club increased the risk normally associated with dodgeball by allowing the game to be played in an enclosed area not intended for dodgeball, allowed it to be played with a hard rubber ball and allowed an adult untrained in childcare to participate in the game and play aggressively.

The lessons of this case for club managers are to enforce club policies designed to protect members, especially children, and to review release provisions with legal counsel.

Lotz vs. Claremont Club, Court of Appeals, Division 2, California (August 15, 2013); reference:  www.courts.ca.gov/opinions/nonpub/B242399.DOC‎

Author:  Glenn A. Gerena, a shareholder with the national law firm of Greenberg Traurig, P.A., concentrates his practice on structuring, documentation for, and restructuring club membership programs.  You can read more about the author at http://www.gtlaw.com/People/GlennAGerena, and read more club related articles by the author at http://www.hospitalitylawcheckin.com.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

Risky Business

Monday, July 29th, 2013
michelle-tanzer-2

Michelle Tanzer

Do you like to wager on your golf game, pick a winner in the March Madness pool, or place a bet on NFL playoff games with a friend?  While it’s perfectly OK to play with the loose change in your pocket, it’s never acceptable to gamble with the viability of the club you are charged with operating; nor is it wise to risk your professional reputation and career.  But this is exactly what you do when you ignore the inherent legal and liability risks in club operations!

As the overall guardian of the club’s well-being, you as the General Manager need to be fully aware of a wide range of risks and liabilities and take the active steps to protect the interests of the club.

But how do you come to recognize the many legal landmines littering the landscape of club operations?  Picking the brains of your club counsel at an hourly rate or scouring the trade journals for news of club court cases is hardly a cost- or time-effective way of educating yourself about the legal issues and problem areas for clubs.

But now there’s a much easier solution!  Michelle Tanzer, noted attorney and legal expert for the club and hospitality industries, has written the definitive book covering club legal issues.  Fully recognizing the challenge for busy club executives to find time to search out and cover all the issues, she has provided synopses of 118 club-related court cases from around the country, grouped under 18 legal categories such as Breach of Contract, Employee Discrimination, Member Discrimination, Employment, Negligence, Sale of Club, Taxation, and others.  After summarizing the cases in each category, Ms. Tanzer, in a straightforward, non-legalese style, lists the lessons to be learned from each case and provides an action checklist for the conscientious manager to protect his or her club.

While the book is 753 pages long, the essential information is provided in the first 115 easy-to-read and well-organized pages.  The remainder of the book covers the detail of each court case for those wanting a deeper understanding of the issues and rationale behind each decision.

The author is currently working on an updated second edition and everyone who purchases the first edition will automatically receive the update at no additional charge.

My Review: A valuable and well-presented body of important legal issues (particularly in the litigious U.S. market), this book is an essential addition to every club manager’s library.  I learned more about club legal issues in the two hours it took to read the summarized material than during a 38-year career in hospitality management.  The book is well-worth the $350 price given the material involved, the cost of legal counsel, and the potential consequences when you lack awareness of the issues.

Club Litigation Book – Keeping Clubs Out of Court, Michelle F. Tanzer, Esq., Club Book Series, Inc., Palm Beach Gardens, FL, 2006.  The book is available in either eshare or CD-ROM format. http://www.clubtax.com/ClubLitigation.html

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hospitality hardworking  managers throughout the country and around the world.

Hospitality Resources International – Management Resources for the Hospitality Industry!

Club Legal Compliance and Liability Issues

Monday, July 16th, 2012

As with any small business, a private club must deal with a number of legal compliance and liability issues.  Some that are directly related to employment and staff (such as the Fair Labor Standards Act, Hiring/Firing, Workers’ Compensation, Sexual Harassment, and Youth Employment) are made more challenging by the sheer number of employees, the youthful nature of the workforce, and the typical levels of turnover in the industry.  A brief discussion of each follows:

State Alcohol Laws

Individual States establish and enforce laws pertaining to the licensing and sale of alcoholic beverages.  In addition to adhering to these laws that govern on and off premise sales, the hours alcohol may be served, the age of servers, purchasing, and in some cases the disposal of empty bottles, there are strict requirements and penalties for over-serving patrons and serving underage persons.

In recent years there have been a number of highly-publicized cases involving liability for the deaths of individuals killed by drunk drivers.  The courts have held that the serving establishment and the server may be held liable when they over-served an individual who then got behind the wheel and killed someone.

Youth Employment

The States and Federal Government have passed laws regarding youth employment.  These laws specify industries and professions in which youth employment is banned or restricted.  Further, some States still require youths to obtain a work permit before beginning work and all States specify the hours that youths of particular ages may work, as well as banning youths from working with various types of dangerous equipment.  A recent high-profile lawsuit against Walmart resulted in a large fine for allowing underage persons to work with cardboard baling equipment.

Sexual Harassment

Sexual harassment is a significant concern in the hospitality industry because of the youthful, mixed gender work force and the late working hours involved.

Hostile Work Environment

Often, but not always related to sexual harassment and/or discrimination, ensuring that the workplace does not become a hostile environment for any employee requires continual vigilance on the part of club management.

EEOC/Discrimination

The Civil Rights Act of 1964, common referred to as Equal Employment Opportunity, requires employers to provide equal employment opportunities and bans discrimination on the basis of race, color, religion, age, sex, national origin, disability, or veteran status.  This law covers all aspects of the employment relationship, including hiring, training, promotion, job assignments, compensation, discipline, termination and application of all of the club’s policies, procedures and benefits.

American with Disabilities Act (ADA)

The Americans with Disabilities Act provides civil rights protections to individuals with disabilities similar to those provided to individuals on the basis of race, color, sex, national origin and religion.  It guarantees equal opportunity for individuals with disabilities in public accommodations, employment, transportation, State and local government services, and telecommunications.  While private clubs are exempt from certain provisions of the ADA, local building codes require incorporation of ADA-compliant facilities in all new construction or facility renovations.

Occupational Safety and Health Act (OSHA)

The Occupational Safety and Health Act of 1970 establishes standards and enforcement mechanisms for ensuring safe workplaces.  This legislation and the federal and state agencies established to implement and enforce it have created a comprehensive array of requirements affecting the small business.  At the core of a business’ responsibilities are ensuring a safe workplace, reporting and investigating all accidents and incidents, training of staff in safe work practices, and record keeping to protect against claims of negligence.

Uniformed Services Employment and Reemployment Rights Act (USERRA)

Certain requirements are place upon employers whose employees are members of the Armed Forces Reserves or National Guard called to active duty or meeting their annual service requirements.

Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act addresses a number of compliance issues associated with payroll record keeping, overtime, exempt versus non-exempt status, and various other compensation-related requirements.

Family Medical Leave Act (FMLA)

The Family and Medical Leave Act (FMLA) provides certain employees with up to 12 workweeks of unpaid, job-protected leave a year, and requires employers to maintain group health benefits at employee expense (if elected by the employee) during the leave.  The details of this act require careful administration.

Hiring/Firing/Wrongful Termination

Hiring, counseling, dealing with misconduct and work performance, and terminations are fraught with legal issues and can become a major headache for the club that does not take reasonable and appropriate steps to train its management staff.

Workers’ Compensation

Employees injured on the job are entitled to Workers’ Compensation.  This state-administered program is specific in accident reporting procedures and level and length of benefits.  Employers with high incidence of Workers’ Comp claims can expect to pay higher insurance premiums.

Unemployment Compensation

This federally-mandated, but state administered protection for employees who become unemployed through no fault of their own, can become an expensive program for employers who are lax in documenting employee discharges or who do not consistently challenge claims without merit.  The higher an employer’s unemployment experience, the higher the tax rate.

Hazardous Material Handling & Storage

Clubs utilize a wide number of hazardous materials such as pesticides, herbicides, and fertilizers in turf-grass management; chemicals to test, treat, and balance the water in swimming pools; and various cleaning compounds used in housekeeping, maintenance, and kitchen ware-washing.  In addition to training employees in the correct handling, cleanup, and storage of these chemicals, each facility is required to maintain up-to-date Material Safety Data Sheets (MSDS) on each hazardous material.

Food Sanitation

In this day and age food sanitation is sometimes taken for granted by diners, but ensuring food safety requires careful training of staff and constant vigilance on the part of food service managers.  Not only can food-borne illness open the club to liability issues, but the damage caused by an outbreak can be damaging to the club’s reputation and bottom line.

Public Health – Aquatics

There are significant safety, public health, hazardous material, and liability issues associated with operating aquatics facilities.  Without prepared operating standards, policies, and procedures, as well as a thoroughly trained staff and carefully documented testing and treatment of water quality throughout each day, clubs are exposing themselves to water-borne contaminants, injuries due to toxic chemicals, and death by drowning.

Summary

The legal compliance and liability issues involved in club management are significant, requiring a General Manager who is alert to all of the ramifications and trains subordinate managers thoroughly and consistently.  Even with sufficient initial training, there is always the need for ongoing refresher training to ensure that all concerned are up-to-date and fully aware of their responsibilities.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers — those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!

Add                to Technorati Favorites