Chapter 1 Revised Slide

Chapter 1
Prevention
Philosophy
© 2017 Stephen Barth, P.C., Diana S. Barber, JD and John Wiley & Sons, Inc.
All Rights Reserved. Images used under license from Shutterstock.com
Prevention Philosophy
 The Future Hospitality Manager and the
Legal Environment
 The Hospitality Manager and Legal
Management – Preventative Legal Management
 Ethics and the Law
All Rights Reserved.
In This Chapter, You Will Learn:
1. Why a study of laws related to hospitality is

important.
2. The historical origins of the law and its
evolutionary nature.
3. A philosophical framework to help prevent
legal difficulties before they begin.
4. 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% of decisions
made daily have legal dimensions
 Those decisions influence the potential for
litigation
The Future Hospitality Manager
and the Legal Environment
 Legalese:
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.
The Hospitality Manager and
Legal Management
 Legalese:
Law - The rules of conduct and
responsibility established and enforced by
a society.
The Hospitality Manager and
Legal Management
1. Know the historical origins of the law.
2. Recognize that laws have an
evolutionary nature, based on changes in
society.
3. Understand how to use a philosophy of
preventative management to manage
the legal environment and minimize the
chances of litigation.
Historical Origins of the Law
 Legalese:
Common Law – Laws derived from
historical customs and usage of a
society, and the decisions by courts
when interpreting those customs and
usages.
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 Evolutionary Nature of
Common Law
 Legalese:
Hospitality Law - Those laws which relate to the
industry involved with the provision of food, lodging,
travel, meetings, events and entertainment services
to its guests, employees, vendors and clients.
Preventative Legal Management
STEM
The Tide of Litigation
What Is STEM?
A process that can be implemented

that will reduce employee errors and
omissions - and litigation.
The Components of STEM
 Select
 Train
 Educate
 Manage and Motivate
STEM the Tide of Litigation
 Legalese:
Liable – To be legally responsible or

obligated.
Select
 Select the right employee for the

specific job.
 Cannot just hire anyone at the last minute.
 Cannot “just hire” anyone anymore.
 Use specific job qualifications, written job
specifications, and information derived from a
thorough investigation for all candidates.
Train
 Train your employees the right way to perform
the task(s) the first time. It is easier and less
costly to train than to retrain.
 Ensure that the trainer is properly trained
himself/herself.
 Assess training efforts
to verify retention.
Educate
Educate yourself about new trends, technological
innovations, laws, and rules and regulations which
impact your segment of the industry.
Now you are in a better position to train your

employees and be successful in the industry.
Management and Motivation
 As a manager - Lead by example!

 Today’s culturally diverse workforce will
require diverse motivating techniques.
 People are motivated by different things.
 Find out what it is that motivates your
employees.
 Involve employees in the process.
 Ask your employees how you are doing as a
manager.
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
Analyze the Situation 1.1
A fellow supervisor confides in you that he

has been arrested a second time in two years
for driving under the influence of alcohol. His
current case has not yet gone to trial. This
supervisor is responsible for the late-night
closing of the restaurant in which you both
work.
Analyze the Situation 1.1
1. Should you discuss this situation with

the restaurant's general manager?
2. Which aspect of STEM is relevant
here?
Ethics and the Law
 Legalese:
Ethics – Choices of
proper conduct
made by an
individual in his or
her relationships
with others.
Ethical Situation
Assume that you are the food and
beverage director of a large hotel. You are
planning for your New Year’s 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 upon quality and price, you
place a very large order (in excess of
$20,000) with a single purveyor.
Ethical Situation (con’t)
One week later, you receive a case of very
expensive champagne, delivered to your
home with a nice note from the purveyor’s
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 Situation (con’t)
Ethical Analysis
Your first thought may be the most obvious one;
that is, you drink it. But hopefully, you will first ask
yourself the seven questions of the ethical
decision-making process.
Ethical Decision-Making Process
1. Is it legal?
• Does either the law or company policy prohibit
this activity?
2. Does it hurt anyone?

• Will this action negatively impact any
stakeholders?
3. Is it fair?
• To all the stakeholders
4. Am I being honest?
• With yourself, and with the company
5. Would I care if it happened to me?

6. Would I publicize my action?
• What if all the stakeholders became aware of
your action?
7. What if everyone did it?

• Could the business effectively operate in an
equitable fashion?
What Would You Do?
Assume that your local municipality is
considering the passage of a law that
would prohibit the sale of all tobacco
products from the interiors of bars and
restaurants, but not grocery stores. The
restaurant you manage has a cocktail
lounge, and cigarettes are both consumed
and sold in that section of your restaurant.
What Would You Do?
There is no current effort to prohibit smoking in

cocktail lounges, such as the one you operate.
You are considering whether to address the local
government body charged with creating such
legislation.
What Would You Do?
1. What are the major considerations you
will think about before you decide to
support or oppose the proposed
legislation?
2. Will the fact that you do or do not smoke
influence your position?
3. Which ethical issues are in play here?
Rapid Review
1. Prepare a five-minute training session for your
staff that emphasizes the importance of
prevention, rather than reacting to, legal liability.
Give an example of a situation where this might
arise.
2. Give an example, other than the one mentioned in

the text, of a recent change in federal, state, or
local law that has impacted the hospitality
industry. Explain why you believe the law was
enacted and whether you believe it was good
legislation.
Rapid Review
3. Give a hospitality example of the importance that
“selection” makes in the STEM process.
4. Give a hospitality example of the importance of
“teaching” in the STEM process.
5. Give a hospitality example of the importance of
“education” in the STEM process.
6. Give a hospitality example of the importance that
“managing” makes in the STEM process.
Rapid Review
7. 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,
he will “do your home carpets once a year” as a thank-
you. Apply the seven criteria for ethical behavior to
this situation.
8. Using the Internet, locate a state law of any type that
relates to business operations. Keywords to use
include “state,” “laws” and “business.” Describe the
law in a one-paragraph essay.
Think about this
on your way out...
Imagine if an international hotel guest offered an

expensive token of gratitude to you, the general manager
of a luxury hotel for providing exceptional customer service
but the hotel’s corporate office has a conflict of interest
policy about accepting non-perishable gifts from
customers.
What would you do?

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Chapter 1

1. Why a study of laws related to hospitality is

Civil Law – The body of law (usually in

A process that can be implemented

Liable – To be legally responsible or

 Select the right employee for the

Now you are in a better position to train your

 As a manager - Lead by example!

 raise employee morale and self-esteem

A fellow supervisor confides in you that he

1. Should you discuss this situation with

2. Does it hurt anyone?

5. Would I care if it happened to me?

7. What if everyone did it?

There is no current effort to prohibit smoking in

2. Give an example, other than the one mentioned in

Imagine if an international hotel guest offered an

What would you do?

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