Legal News in the Restaurant Industry

Some recent news in the restaurant industry is that the National Restaurant Association has taken a big step toward protecting the industry.

Over the years, well-funded special interest groups have lobbied for laws and regulations that have ended up burdening the restaurant industry with over-regulation.

Restaurant Legal Center

In January 2017, the National Restaurant Association launched the Restaurant Law Center (RLC), which gives the industry a voice in the legal system that can help protect restaurateurs.

RLC Chairman, Jay Stieber points out: “Restaurants are America’s job training ground and one of the few careers that don’t require a four-year college degree to achieve the American Dream. But restaurants continue to be threatened by overregulation on the local, state and federal levels, and by activist judges with little to no understanding of how our industry works.”

The RLC gives the National Restaurant Association a means of fighting back against unreasonable legal actions and is also a way to promote laws and regulations that can help the industry create more jobs and grow the nation’s economy.

Oregon Restaurant and Lodging, et al v. Perez, et al

The RLC managed the case Oregon Restaurant and Lodging et al v. Perez, et al, which went to the United States Court of Appeals for the Ninth Circuit. Law 360 ranked this as a top case to watch for the restaurant industry because it challenged the U.S. Department of Labor (DOL) on bars and restaurants that do not take tip credits and whether they can set up tip pools that require tipped employees to share tips with staff that generally do not receive tips.

The key question for the appellate court to determine was whether the DOL had the authority to regulate tip-pooling practices of employers who do not take a tip credit and whether its regulation violated the FLSA. It found in favor of tipped employees that for restaurants not taking tip credits tips, the tips belonged to tipped employees unless otherwise agreed between the employee and employer.

The executive director of the RLC is appealing the case to the U.S. Supreme Court.

Stephen Hans & Associates assists small and medium sized business owners with employment related concerns.

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Lockheed Martin Age Discrimination Lawsuit | $51.5 Million in Damages

In January 2017, a federal jury in Camden, NJ awarded a verdict of $51.5 million against Lockheed Martin for alleged age discrimination. reported that the lawsuit claimed Lockheed Martin had a practice of laying off older employees and replacing them with newer employees for the same position.

Age Discrimination

Lockheed Martin Age Discrimination Case Details

Plaintiff Robert Braden, whose title was Project Specialist, Senior Staff at the Lockheed Martin facility in Moorestown, NJ brought a lawsuit against the company after being laid off when he was 66 years old. The company laid off five employees out of the 110 employed at the facility, and all five were over 50 years old. Braden said the company gave no reason for laying him off and did not use any objective measures to decide which employees to lay off. Despite laying off employees, the company continued to recruit and hire younger employees for positions Braden was also qualified to hold.

Braden brought the lawsuit under the New Jersey Law Against Discrimination (NJLAD) and the American Discrimination in Employment Act (ADEA).

Work Background Details about Braden, the Plaintiff

Braden first started working for the Moorestown facility in 1984 when RCA was the owner, and as the company went through a series of different owners as a result of mergers and acquisitions, he eventually became a Lockheed Martin employee in 1995.

The Verdict

The jury awarded Braden $520,000 in back pay under the ADEA and another $520,000 for emotional distress. They also awarded $50 million in punitive damages against Lockheed Martin.

If you are a business owner and have questions about age discrimination, consult with an experienced employment lawyer to avoid disputes and lawsuits.

Stephen Hans & Associates is an employment and labor law firm that assists small and medium sized business owners. This has been our legal focus for more than 20 years.



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Best Business Practices When Screening Applicants with Criminal Records

When an applicant with a criminal record applies for a job at your company, the screening can become complicated. You cannot make your decision based on any type of discrimination.

The EEOC provides guidelines you should consider following when asking about criminal backgrounds.

For example, let’s say two applicants have comparable educational and employment experience backgrounds. They are both college graduates in the same field with equivalent job performance histories. Both applicants have criminal convictions for possessing marijuana as minors. One is African American and one is Caucasian. Your reason for hiring one over the other cannot be based on belonging to protected classes under Title VII of the Civil Rights Act including race, color, sex, or nationality.

employment best practices

You should follow these hiring guidelines:

  • Treat applicants with similar criminal records consistently. If you screen out African American candidates because of a particular criminal record then you should also screen out other individuals of different colors and races with the same criminal record.
  • Sometimes a policy or practice can significantly disadvantage people of a certain protected class in a certain region. However, it may be important if you can show that in the geographical area where you are recruiting, the percentage of Hispanics or African Americans with arrest records is not higher than Caucasians in the same area. This establishes that you aren’t disadvantaging protected classes based on criminal backgrounds.
  • Delay asking for criminal background information until later in the hiring process. It’s better if you can evaluate an applicant’s other qualifications before asking about a criminal record. However, depending on the laws where your business operates, you may be required to check criminal backgrounds early in the process.
  • Evaluate the criminal history in relation to the risks and responsibilities of the job. The nature of the crime, how long ago the criminal arrest or conviction occurred and the nature of the job are factors to consider.
  • Treat arrest records differently than conviction records. Arrest records can be inaccurate and are not proof a crime was committed. Even so, an arrest can lead to an investigation of the conduct underlying the arrest and be a factor in a negative employment decision.
  • Review the accuracy and relevance of a conviction record before making an employment decision based on the arrest record. After reviewing the criminal record, you may decide it was inaccurate.
  • Give applicants an opportunity to explain their criminal history. Hearing the applicant’s side of the story is often important, including how their views and life has changed since the arrest or conviction.

Stephen Hans & Associates assists small and medium sized business ownerwith employment related concerns.

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Understanding Negative Hiring Practices and How to Avoid Them

Interviewing applicants for jobs typically involves questions and sometimes testing. As an employer, you should be aware that some questions have a negative impact on certain protected classes. Protected classes are groups of people based on race, color, religion, sex, pregnancy, sexual orientation, gender identity, national origin, disability status or age (age 40 and older).

If your method of screening out applicants eliminates a protected class, you should consider using a different screening method. Find another effective alternative that has less of a negative impact and use it instead. Also, your questions should be strictly related to determining whether the individual can perform the job.

discrim at job interview

According to the EEOC , here are examples of negative questions or testing:

  • Requirements for a certain height or weight range often negatively affect female applicants.
  • Making applicants pass agility tests can negatively affect older applicants.
  • Requirements that employees live in certain geographic regions can negatively affect applicants of a particular race.
  • Broadly excluding applicants with criminal records can negatively affect applicants of a certain race or origin.

How Can You Substitute Testing/Questions with Better Alternatives?

One way to deal with a height or weight requirement is to determine instead whether the person is able to perform the specific job duties safely and efficiently.

If you have agility tests, ensure they are related to a legitimate business purpose, such as being quick enough or strong enough to perform the job being applied for.

Instead of requiring that people live in a geographic area, find out whether they are familiar with the area. Ask whether they could respond to service requests within that area. Whatever the job related reason is for wanting them to know the area is what is important, not actual residency.

Stephen Hans & Associates is an employment and labor law firm that assists small and medium sized business owners. This has been our legal focus for more than 20 years.



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Is It Time to Update Your Severance Agreements?

Keeping your handbooks, employment agreements, severance agreements and other documents current with laws and legal trends can seem like a lot of work. However, when you get caught on the wrong side of a legal dispute, hindsight says it was well worth the time.

The National Law Review recently published an article entitled “SEC Targets Severance Agreements that Impede Whistleblowers”. The article lists a number of companies the SEC went after because their severance agreements that employees signed had clauses that warned the employee would waive severance or other benefits if they engaged in the following types of activities against the company:

  • Filing a complaint with the SEC
  • Filing a complaint with a government agency
  • Disclosing confidential information, except when disclosure is required by law, in response to a subpoena or with the company’s permission
  • Relaying communication that disparaged, denigrated, maligned or impugned the company or its officers, directors or other associates
  • Voluntarily communicating or contacting a government agency

severance agreements


SEC Settled with a Number of Companies

Between 2015 and 2016 and continuing into 2017, the SEC has settled with a number of companies. While names were withheld, examples of settlements included:

$130,000 owed in penalties and an agreement put in place to amend confidentiality statements stating that employees were allowed to report possible violations to the SEC and other government agencies

  • $180,000 penalty
  • $1.4 million penalty
  • $340,000 owed in penalties and the implementation of a mandatory yearly training program to inform employees about their whistleblower rights

Employee termination agreement or contract


EEOC Targets Companies

The EEOC has also targeted companies with severance agreement clauses that interfere with the EEOC’s ability to investigate possible discrimination violations.

Get Legal Help with Revising Documentation

Private companies along with public companies are at risk for lawsuits if their legal documents contain clauses that impede employees in regards to reporting information to government agencies.

Stephen Hans & Associates assists small and medium sized business owners with regulatory and employment related concerns.

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Record-Keeping Actions Required When Hiring Employees

At Hans & Associates, we work with clients to prevent legal or regulatory disputes and also represent our business clients when disputes arise.

We live in an administratively complex and legal world where many requirements are expected of business owners. Take the simple example of hiring a new employee. There are administrative actions that employers legally must take within certain deadlines. outlines some administrative steps for being in compliance with state and federal administrative laws.

I-9 Records

Based on federal law, you must verify your employee’s eligibility to work in the U.S. You have three days from the hiring date to complete the I-9 form. On 11/14/16 the USCIS released a new I-9 version and as of 1/22/17, employers must use this version. You keep the I-9 in your records for three years after the employees hiring date or for one year after the employee’s termination.

Record-Keeping Actions Required When Hiring Employees


W-4 Form

You must keep employment tax records for your employees and this includes W-4 forms, which include allowances an employee is claiming. This information is vital for determining the amount of money to withhold from paychecks. The IRS requires employers to keep W-4’s and other employee tax records for a minimum of four years after paying taxes.

Withholding from Wages for Taxes

You must add the employee to your payroll and withhold from wages the proper amount to remit to taxing authorities. Taxes withheld include income tax, Medicare, Social Security and state income tax.

Report the Hiring to the NY Department of Taxation and Finance

You must report the employee’s first name, middle initial and last name, employee’s address, employee’s Social Security number, and hire date along with your company name, address, employee identification number and whether you provide independent health insurance benefits for the employee and the qualification date. You have 20 calendar days from hiring the employee to report this information. The state department uses this information for following up on employees who owe child support and have payments taken out of their paychecks.

Posting Federal and State Labor Notices

Even starting with your first employee, your business must display federal and state notices such as minimum wages and anti-discrimination laws. In addition, you must display them where employees can see them. provides a service to help you stay up-to-date with posters.

Stephen Hans & Associates is an employment and labor law firm. Our firm has assisted small and medium sized businesses with employment law issues for more than 20 years.



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Examples of Harassment in the Workplace

If you own a business and are working to prevent harassment, it is crucial to understand what harassment is. Do you know what behavior the legal system considers as harassment? Many employers do not have a firm grasp of what constitutes harassment, other than a common sense notion of it.

The EEOC’s proposed guide against unlawful harassment (downloadable at the EEOC website)  discusses two main harassment categories.

Severity of Harassment Incidents

The severity of one incident can determine a hostile work environment. The following types of incidents are considered severe:

  • Sexual assault
  • Touching of an intimate body part
  • Physical violence or the threat of physical violence
  • The Use of symbols of violence or hatred toward individuals sharing the same protected characteristic (swastika, image of a Klansman’s hood or a noose)
  • Use of the “n-word” by a superior
  • Use of animal imagery for comparing a worker to a monkey, ape or other animal
  • Threats to deny job benefits based on the person’s rejection of sexual advances

When the above conduct occurs in the presence of coworkers or clients, the court may consider it even more degrading and therefore more severe.

Pervasiveness of Harassment Incidents

Pervasiveness refers to the frequency of conduct along with the cumulative effect of certain behavior. Even though there is no set number that establishes the pervasiveness, the intensity or amount of time passing between incidents is a factor. The closer together the incidents are, the more pervasive the harassment is.

The fact that the behavior is unwelcome, and the worker has expressed this fact is also relevant in determining whether harassment occurred. Sparse instances spread out over a number of years may not be considered harassment.

An example of pervasiveness would be making sexual overtures, such as sending revealing photographs, notes asking for dates, communications about how attractive the person is and descriptions of fantasies about the person.

If you have questions about whether harassment is occurring in your company, seek a legal opinion and find out how to deal with it.

At Stephen Hans & Associates, our employment litigation firm assists small and medium sized business owners in employment related matters.

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