Chapter 1

LEGAL ASPECTS IN THE

HOSPITALITY INDUSTRY
In This Chapter, You Will Learn:
Why a study of laws related to hospitality is
important.
The historical origins of the law and its
evolutionary nature.
A philosophical framework to help prevent
legal difficulties before they begin.
How to evaluate management actions on an
ethical basis.
The Future Hospitality Manager
and the Legal Environment
Unique and diverse operating environment
Estimated that 60 - 70 percent of decisions
made daily has legal dimension
Those decisions influence the potential for
litigation
HOSPITALITY LAW
Hospitality law is the body of law relating to the
foodservice, travel, and lodging
industries. That is, it is the body of law
governing the specific nuances of transportation,
hotels, restaurants, bars, spas, country clubs,
conventions, events, and more.
The Future Hospitality Manager
and the Legal Environment
Attorney - Any person trained and legally
authorized to act on behalf of others in
matters of the law.
Litigation - The act of initiating and carrying
on a lawsuit. Often, used to refer to the
lawsuit itself.
Law - The rules of conduct and responsibility
established and enforced by a society
Historical Origins of the Law
Common Law Laws derived from historical
customs and usage of a society, and the
decisions by courts when interpreting those
customs and usages.

Common law comes from reviewing past

litigation and is greatly interested in
precedence. Precedence is cases or similar
cases that was decided and adjudicated by a
previous court of law.
Historical Origins of the Law
Civil Law The body of law (usually in the
form of codes or statues) created by
governmental entities that are concerned with
private rights and remedies, as opposed to
criminal matters.

The form of law is more etched in written laws and

codes. Here, judges feel less bound to adjudicate
based on precedence as those in common law.
Civil and Criminal Law
Civil lawwrong done to an individual

Criminal lawwrong considered to be

inflicted on society
Civil and Criminal Law
Objectives

Civil lawsuitcompensation for an injury

Criminal lawsuitpunishment of the wrongdoer

Civil and Criminal Law
Civil lawsuit
Person who commences the lawsuit is the injured
person

Criminal lawsuit
Person who undertakes the lawsuit is society-at-
large, usually referred to as The State of or
The People of the State of or The
Commonwealth of
The Evolutionary Nature of
Common Law
Hospitality Law - Those laws which
relate to the industry involved with the
provision of food, lodging, travel and
entertainment services to its guests and
clients
Liable To be legally responsible or
obligated.
Preventative Legal Management
STEM
Select
Train
Educate
Manage and Motivate
Select
Select the right employee for the specific
job.
Planning recruitment is key
Avoid last minute hires.
No just hire anyone anymore.
Match job qualifications, job specifications, and
information derived from all candidates.
Train and Educate
These two aspects are interrelated.
Train your employees the right way to perform
the task(s) the first time. It is easier to train than
to retrain.
Some Current Litigation Trends
Negligent retention
Negligent supervision
Failure to properly train
Positive Management
and Employee Loyalty
How to become a positive manager and build
employee loyalty.
raise employee morale and self-esteem
reduce turnover
enhance service
enhance customer satisfaction
reduce litigation
enhance the bottom line
Proper Management and
Motivation
As a manager - Lead by example!
Planning
Organizing
Controlling
Leading
ANALYZE THE SITUATION:
Ethics and the Law
Ethics Choices of proper conduct made
by an individual in his or her
relationships with others.
Ethical behavior refers to behavior that is
considered right.
Ethical Decision-Making Process
1.Is it legal?
2.Does it hurt anyone?
3.Is it fair?
4.Am I being honest?
5.Would I care if it happened to me?
6.Would I publicize my action?
7.What if everyone did it?
Consider the hospitality manager who is
responsible for a large wedding reception in a
hotel. The bride and groom have selected a
specific champagne from the hotels wine list to
be used for their champagne punch. The contract
signed by the bride and groom lists the selling
price per gallon of the punch but does not
specifically mention the name of the champagne
selected by the couple. In the middle of
the reception, the hotel runs out of that brand of
champagne
A less costly substitute is used for the duration of
the reception. Neither the bride and groom nor
the guests notice the difference. Using the seven
ethical guidelines just listed, a manager could
evaluate whether he or she should reduce the
bride and grooms final bill by the difference in
selling price of the two champagnes.
How an individual determines what constitutes
ethical behavior may be influenced by his or her
cultural background, religious views,
professional training, and personal moral code. A
complete example of the way someone would
actually use the seven ethical guidelines is
demonstrated in the following hypothetical
situation.
AN ETHICAL DILEMMA: FREE
CHAMPAGNE
Assume that you are the food and beverage director of a large
hotel. You are planning for your New Years Eve gala and
require a large amount of wine and champagne. You conduct a
competitive bidding process with the purveyors in your area and,
based on quality and price, you place a very large order (in excess
of $20,000) with a single purveyor. One week later, you receive a
case of very expensive champagne, delivered to your home with a
nice note from the purveyors representative stating how much
it appreciated the order and that the purveyor is really looking
forward to doing business with you in the years ahead. What do
you do with the champagne?
ETHICAL ANALYSIS:
1.Is it legal?
2.Does it hurt anyone?
3.Is it fair?
4.Am I being honest?
5.Would I care if it happened to me?
6.Would I publicize my action?
7.What if everyone did it?
Alternative Options
Return it to the purveyor with a nice note
stating how much you appreciate it but that
your company policy will not allow you to
accept it.
Turn the gift over to the general manager to
be placed into the normal
liquor inventory (assuming that the law will
allow it to be used this way).
Donate it to the employee Christmas party
ACTIVITY:
1. A vendor has agreed to clean your hotel
carpets at a very competitive price.
In a telephone conversation with you, the vendor
states that if it gets the
contract, members of its staff will do your home
carpets once a year as a
thank you. Apply the seven criteria for ethical
behavior to this situation.