The Equal Employment Opportunity Commission (“EEOC”) has targeted the restaurant industry as the single largest source of sexual harassment claims. With all the media attention on the subject lately, the number of sexual harassment cases filed each year against restaurants and their owners are escalating at an all too rapid pace. Restaurant owners must now take a pro-active stance to keep such complaints from damaging their operation. All employees, male and female, need to be formally informed as to what types of conduct are unlawful. Assuming that your managers and employees know how to behave without explicit guidelines could be your ticket to the courthouse. A series of Supreme Court decisions have defined what “sexual harassment” means. Those cases, and the interpretive guidelines of the Equal Employment Opportunity (EEOC), define two distinct types of sexual harassment:

• quid pro quo (a legal term meaning “this for that”), in which a supervisor demands sexual favors from an employee and threatens to fire the employee if the conditions are not met; and

• hostile environment, in which a supervisor or employee creates a work environment through verbal or physical conduct that interferes with another co-worker’s job performance or creates an intimidating work environment. A hostile environment is created when unwelcome sexual behavior is repeated. For example, an employee keeps telling off-color jokes after another staff member says they are offensive, or one employee keeps asking another employee for dates after being refused.

GENERAL RULE: An employer’s obligation with regard to sexual harassment arises before any act of harassment even occurs. As such, most lawyers practicing in this field strongly urge their employer-clients to distribute a clear and explicit sexual harassment prohibition policy and reporting procedure. Additionally, Anti-harassment training should occur on a regular basis which should educate managers and other employees as to what conduct is specifically prohibited (including a presentation of hypothetical harassment scenarios) and what to do if the employee believes they have been/are being harassed.

This policy and training is critical because under federal case law, an employer can fulfill its obligation if it takes all reasonable steps to prevent harassment before it occurs and takes effective steps to promptly remedy the harassment after it takes place. If these general principles are consistently and carefully applied, the employer can go a long way towards limiting its exposure and liability for sexual harassment.

MUNICIPAL NOTIFICATION CHANGES:  Effective immediately there are major changes in the 30 day advance municipal notification requirements. Some changes affect the entire state, others affect licensees in New York City and still others affect licensees outside of the five boroughs of New York City. Here is a breakdown of the changes:

STATEWIDE: Municipal notification for original on premises applications remains in place statewide;
All licensees must now pay the same $128.00 corporate change fee. 

OUTSIDE OF NEW YORK CITY: All alteration and license renewal notification requirements for licensees are eliminated outside of the City of New York.

NEW YORK CITY:  Substantial corporate changes (80% ownership interest or more) will now require 30 days prior notification to Community Boards for New York City licensees.  Alteration and license renewal notification requirements remain in place for New York City licensees with the exception of off premises licensees who will no longer need to notify Community Boards of alterations.

In anticipation of their upcoming IPO, Groupon requested a declaratory judgment from the New York State Liquor Authority (NYSLA) regarding whether there was any violation involved with having Groupon offer 50% off of alcoholic beverages at various establishments in New York.

After much deliberation, the NYSLA ruled that the 50% off offer was perfectly legal. The NYSLA stated that since customers received no more than 50% off of the retailers drink prices, it did not constitute a violation of the unlimited drinks offering prohibition.