Mitigating Hotel Employment Risk with Class Action Waivers

By John Mavros Attorney at Law, Partner, Fisher & Phillips, LLP | August 05, 2018

Co-authored by Lauren Stockunas, Associate, Fisher Phillips LLP

Hotel employers must constantly juggle leaves of absences, employee complaints, and other personnel problems.  Sometimes these can result in employment claims or lawsuits ranging from disability discrimination to retaliation to wrongful termination.  But, a hotel employer's biggest concern is a class action lawsuit for wage and hour violations. A class action lawsuit turns one employee's complaint for unpaid wages (or failure to provide meal/rest periods) into a lawsuit on behalf of 100 or more employees.   This means that the value of the claim jumps from $20,000 to $2,000,000. 

While the best way to avoid a class action is to comply with employment laws, i.e. tracking employee time, paying minimum wage, properly accounting for overtime, and providing proper meal and rest breaks et cetera; the second best way for a hotel to protect itself is to implement and have all employees sign an arbitration agreement with a class action waiver. 

Arbitration agreements with class action waivers are relatively commonplace amongst employers, but this past spring, the Supreme Court officially gave employers the green light to implement such waivers with confidence. 

The Pros and Cons of Arbitration Agreements

This protective measure for warding off class actions has two components:  (1) an arbitration agreement; and (2) a class action waiver within the arbitration agreement. 

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.