The Outlook for Hotel and Resort Operators Post-BFI

Waiting to Exhale

By Dana Kravetz Firm Managing Partner, Michelman & Robinson, LLP | March 05, 2017

Eighteen months since the National Labor Relations Board (NLRB) revised its standard for the imposition of joint employer liability, and hoteliers remain in a state of legal limbo, unsure what 2017 and beyond have in store on the issue. For those hotel and resort operators whose best response to the question, "how should we continue to move forward in the wake of BFI?" is a shrug of the shoulders, a current scorecard for your consideration.

The BFI Decision

The NLRB shook the hotel franchisor/franchisee landscape with its jaw-dropping Browning-Ferris Industries of California (BFI) decision back in August 2015, which drastically eased the criteria for a company to be considered a joint employer. In lieu of the longstanding and traditional joint employer test that focused on governance, wage and supervision decisions and control, the NLRB in BFI adopted a new and much more lenient standard requiring that a business merely exercise "indirect" (or potential) control over workers to be held liable for labor violations committed by franchisors and contractors. While BFI involved a waste management company and its interaction with a contractor hired to clean and sort recycled products, the implications of the NLRB's ruling are far-reaching and apply to all relationships in which tasks and responsibilities are outsourced. After BFI, Plaintiffs' attorneys are left licking their chops.

The BFI Appeal

Not surprisingly, BFI promptly appealed the NLRB's decision, seeking review by the United States Court of Appeals for the District of Columbia Circuit. The appeal is scheduled to be heard on March 9, 2017, though it is anybody's guess when a ruling will be handed down, hopefully by year's end. In the meantime, executives in a range of industries, including hospitality, sit at the edge of their seats, hoping the D.C. Circuit Court accepts the following argument as set forth in BFI's reply brief:

"The board's decision ignores the longstanding rule that joint employment does not exist absent the exercise of substantial direct and immediate control by the putative joint employer, improperly holds that 'indirect' or 'reserved' control are sufficient standing alone to establish joint-employer status under the common law, and interprets the concepts of 'indirect' and 'reserved' control to include notions of economic influence which the board is prohibited from considering under the distinctive history of the NLRA."

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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.