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 February 2019...

Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.