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Nov 01 2017

POST THE SIGN: AVOID THE FINE.

Published by under Posting Requirements

Every year restaurant and bar owners are subjected to harsh fines, both monetary and criminal, as result of failing to post various signs as required by New York State and City laws.

GENERAL RULE: Although the requirements are constantly changing, the following is a list of signs that must be displayed in customer view: Equipment Use Permit; Occupancy Sign (in establishments holding more than 75 people); Sidewalk Café License (indicating number of tables and chairs); Local law 12: Taskforce/ Resuscitation Equipment; Sign Prohibiting the Sale of Cigarettes to Minors (if cigarettes are sold on the premises); Cigarette Retail License (if cigarettes are sold on premises); Operating Permit; Choking First Aid Sign; CPR Sign: Permit to Manufacture Frozen Desserts; Sign Indicating Availability of Most Recent Inspection Report; Alcohol and Pregnancy Warning; Alcohol and Beverage Control Law; Sales Tax Certificate; Signs Designating “Smoking” and “Non-Smoking” Areas; Exit Signs (required over each exit) or Exit Directional Signs (if exit is not in clear sight); Waste Carter and Times of Refuse Removal; and Nutritional Information Pertaining to Certain Items Termed “Diet” , “Light”, or Similarly Modified Foods.

The penalties for not posting these required signs range from minor monetary fines to seizure of assets and forced business closures.

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Oct 31 2017

RESTAURANTS SERVED WITH SEXUAL HARASSMENT SUITS

Published by under Sexual Harassment

 

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.

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Oct 30 2017

EMPLOYMENT CONTRACT: Keeping Key Personnel

As the owner of a restaurant, you should consider providing your key personnel with employment contracts. The employment contract will provide the employee with job security, will clarify all of the conditions and duties of employment, and will create a contractual obligation for them to be employed for the term of the contract.

GENERAL RULE: While there is no required form that the contract must take, certain key provisions should be included, such as the (i) term (i.e. length of employment), (ii) compensation, (iii) employees duties and obligations, (iv) confidentiality, non-disclosure, non-compete, and non-solicit provisions, and (v) grounds for termination or a “Just Cause” clause.

The more detail contained in the contract, the less room for disagreement during the employment period. As an owner, be sure to have the “Just Cause” clause worded in a manner that allows you to terminate the employee during the term, without any penalty, if the employee engages in negligence, misconduct, excessive absences, drug use, theft, fraud, fails to perform his duties in a professional manner, performs an act or omission of an act that could be deemed injurious to the company financially or to its reputation, or is convicted (or a plea of no contest) of any misdemeanor or felony.

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Oct 30 2017

Americans with Disabilities Act Compliance

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The Americans with Disabilities Act (ADA) is one of the most important national civil-rights laws dealing with the rights of people with disabilities. The ADA prohibits discrimination on the basis of a disability in areas of employment, places of public accommodation, housing, public services, transportation, and telecommunications. However, a barrage of ADA lawsuits have recently been filed against New York restaurants and bars and a great deal of them really have nothing to do with assisting those with disabilities.

I very recently defended another NY restaurant in an ADA case where the Plaintiff was claiming that the bathrooms were not ADA compliant because the mirrors were too high, the pipes under the sink were not properly insulated, and the bathroom sign was placed too high and didn’t contain the word “bathroom” in braille. In that case the Plaintiff was correct. These issues were in fact violations of the ADA and the Defendant restaurant had no choice but to settle the legal action. The settlement included a nominal payment to the Plaintiff himself, a much larger payment to the Plaintiff counsel for their legal fees (prevailing Plaintiffs are entitled to legal fees in ADA cases so these amounts are always worked into a settlement), and an agreement to fix the violations. The total settlement payment was over $10,000.00 plus tack on another $6,000.00 for legal defense fees bringing the cost of that legal action to over $16,000.00.  The actual cost incurred to fix the violations . . . .$95.00.

Defendants with any ADA violations, if sued, must ultimately make a business decision. That business decision almost always requires the Defendant to settle the case rather than proceed forward running up their own legal defense fees along with the plaintiff’s legal fees.

The point of this post is simple. Be fully ADA compliant. The ADA law is very technical and even a minor violation may result in a very expensive lawsuit from an “enterprising” plaintiff counsel. Be proactive. Retain qualified legal counsel and have them do a walk-through of your establishment ensuring compliance and pointing out any and all issues.

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Oct 29 2017

TRADEMARK: What’s in a name?

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You worked hard thinking of that perfect name for your restaurant, you spent a small fortune and countless hours marketing that name, and because of all your efforts that name has developed a great “buzz” and reputation in New York. . . and less than a year later another restaurant opens up in NYC with almost the same name as yours! To make matters worse, people are now going to that other restaurant thinking that it’s yours! What do you do?

If you had your restaurant’s name “trademarked,” you would call your attorney, he/she would draft and send a “cease and desist” letter to your competitor, and you would put that competitor out of business or at the very least force them to change the name of their restaurant.

GENERAL RULE: Trademark registration for the name of a restaurant or bar should be done for EVERY establishment so long as it can be done.

A trademark is any word, name or symbol adopted and used by a person (or that person has a bona fide intent to use that word, name or symbol and subsequently does use it) that identifies and distinguishes his or her goods or services from those manufactured and sold by others, and indicates the source of those goods or services. Names of restaurants, as long as they are not generic or merely descriptive, are terrific candidates for trademark registration. Additionally, a trademark is considered an asset which is not only valuable to a business but invaluable to a business if you are considering opening more than one establishment with the same name or ultimately licensing and/or franchising your concept.

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Sep 25 2017

Community Boards and Liquor License Applications (Q and A)

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Are Community Boards notified of when the NYSLA receives applications in their neighborhoods?

For certain types of establishments, Community Boards are notified before the NYSLA receives an application. The Alcoholic Beverage Control Law requires that anyone applying for an on-premises license notify their community board of their intention to apply for a liquor license 30 days before filing an application with the State Liquor Authority. Proof of the 30 day notice must be submitted with the application. The community board may submit an opinion, either in favor of or against granting the license. That opinion will become part of the record used by the NYSLA in deciding whether to approve the application.

What are the different types of licenses granted by the NYSLA?

There are several types of licenses granted by the NYSLA, the following are the four basic ones issued: On-Premises Liquor: Generally considered to be the standard “bar” license. Allows on-premises consumption of liquor, wine and beer and also allows for sale of beer (only) for off-premises consumption.  Food, such as soups and sandwiches, MUST be served. Grocery Beer/Wine: Off-premises beer license as listed above, see “Grocery Store Beer”. Additionally a “wine product” is defined as a beverage containing wine with added juice, flavoring, water, citric acid, sugar and carbon dioxide, not containing more than six percent alcohol by volume (typically referred to as “wine coolers”).  Catering: Allows providers of food for banquet halls, dining halls, etc., to provide liquor, wine and beer for consumption for an assemblage for a particular function (i.e. retirement dinner, wedding reception, private party) to which the general public is not admitted. This license is for this type of function only. Liquor Store: For the sale of liquor and wine (no beer) for consumption off the premises. The only additional items allowed to be sold, such as ice and corkscrews, are listed in the ABC Law. Only one license is allowed per person (corporation, partnership, etc.).

What is the 500 foot rule and how does this apply to community boards? When the NYSLA receives an application, there is a general presumption that it will be approved unless there is a good reason not to approve it. However, for on premises license applications falling under the 500 foot rule, (meaning there are already 3 or more existing establishments with the same type of license within 500 feet of the proposed applicant), the presumption switches, and by law the application cannot be approved unless the SLA finds that issuing the license would be in the public interest. The 500 foot law requires the NYSLA to consult with the community board and conduct a hearing to gather facts to determine whether the public interest would be served by issuing the license. Generally speaking, if there is no opposition to the application, and no other issues presented that requires consideration by the Members of the Authority, the application is acted on by the NYSLA’s Licensing Bureau. In cases where the community board or other interested parties oppose the application, or there are other issues requiring review by the Members of the Authority, the matter is referred to the Members for determination. It is important to note that the fact that there is opposition to an application does not necessarily mean that the Authority will disapprove the application. The Authority may also applications even when there is no opposition. In situations where there is opposition to an application, applicants may come to an agreement on stipulations concerning the operation of the establishment (e.g. closing hours, live music, etc). In such cases, the applicant may incorporate those stipulations into the approved method of operation. These stipulations then become conditions of the license privilege and failure to comply subjects the licensee to disciplinary action. The SLA can impose certain conditions on the operation of the establishment without the consent of the applicant if there is good cause to do so.

Stipulations: Before a license is issued, if a Community Board and applicant agree to certain conditions of the license, some of which can be written into the license and some that cannot, how can the Community Board handle this? If the Community Board and the applicant reach an agreement with respect to the operation of the establishment, the applicant can incorporate into the application those conditions that are relevant to the operation of a licensed establishment.

What is the 200 foot rule? Under the “200 Foot Rule” an establishment cannot be licensed to sell liquor at retail if it is on the same street and within 200 feet of a school, church, synagogue or other place of worship. The rule also applies to wine stores. It does not apply to on premises establishments that are licensed for wine and/or beer only and to grocery stores. There are two exceptions under the law if the establishment existed prior to the enactment of the law in 1934 or if the location was licensed prior to the existence of the school or place of worship and has been continuously licensed ever since.

What weight does the CB have in recommending approval or denial of retail license? While not binding on the Members of the Authority, the NYSLA considers input from community boards in all licensing decisions. However, courts have held that, for applications not subject to the 500 foot rule, community opposition alone is not sufficient to disapprove an application.

How do I know what Community Board represents me? The following link is from the Mayor’s Community Affairs Unit. http://www.nyc.gov/html/cau/html/cb/directory.shtml

Can a bar or nightclub “transfer” their license to another owner? Does the Community Board need to be notified? Does a transfer require NYSLA approval? Licensees may not “transfer” a license, in the way transfer is commonly understood (i.e. licenses may not be sold or given from one person or company to another). The NYSLA’s Licensing Bureau staff uses the terms “transfer” and “new” applications only to differentiate between an application for an establishment that is currently licensed and selling their business (transfer) and an establishment that is not currently licensed (new). In both cases, the license applicant must go through the same process, including notifying their CB and holding a 500 foot-hearing if applicable. A corporate licensee may have a change of officers, directors and stockholders without going through the entire application process. In such a case the licensee has to submit information regarding the new persons coming into the corporation and the financing involved.

How do temporary permits work? If a license applicant gets a temporary, does this mean they will get a full liquor license? A license applicant who is purchasing the existing business that is currently licensed to sell alcoholic beverages may file an application for a Temporary Retail Permit. This allows the license applicant to begin operating the business and serving alcoholic beverages while their application for a permanent license is being reviewed. In order to qualify for this permit, the establishment must have been open and operating at least 30 days prior to the filing of the application. The permit is granted at the discretion of the NYSLA for a period of 90 days, and may be renewed. Issuance of the permit is not a guarantee that the licensee will be approved for a permanent license.

Does the license expire once the licensee’s establishment ceases to exist? A liquor license is connected to the individual and a specific location. If the establishment ceases to exist their license certificate must be returned to the NYSLA. If the entity has vacated the premises is considered abandoned, the NYSLA Licensing Bureau sends out an abandonment letter to verify if the prior tenant has vacated the premises. When a licensee closes their business, they are required to alert the NYSLA and hand in their license, this is referred to as “surrendering” the license. Licensees are entitled to a refund on the unused portion of their licensing fee.

Are there any routine unannounced inspections of establishments by NYSLA’s enforcement unit to ensure compliance with the Alcoholic Beverage Control Law or is it complaint driven? The SLA conducts unannounced undercover inspections as part of its investigation of a licensee. An investigation by the SLA may include: 1. on-site inspections of a licensed establishment; 2. on-site undercover investigations by NYSLA Investigators and other law enforcement agencies; 3. a review of reports and investigations by other law enforcement and regulatory agencies; and 4. interviewing potential witnesses/complainants and collecting evidence of potential violations. Information comes to the NYSLA from a variety of sources, including police and other law enforcement agency referrals, complaints by other government agencies or officials, and complaints made by the public. The identity of a person making a complaint is kept confidential.

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Sep 08 2014

YELP NOW HAS COURT PERMISSION TO CHANGE RESTAURANT RATINGS FOR MONEY

Yelp logo. (PRNewsFoto)
The Ninth Circuit Court of Appeals in San Francisco has recently ruled that Yelp can revise, edit and prioritize business reviews based on advertising money that the site receives from the business.

This high profile ruling really destroys the veil of impartiality that Yelp was benefitting from for all these years.  Now its crystal clear that Yelp may (although they have not admitted that they did) delete bad reviews for a restaurant that places an ad on its site and similarly delete positive reviews given for a restaurant that refuses to place ads on the Yelp site.

Seems that this is a real wake up call for all of us (myself included) who thought that Yelp reviews were not being edited, deleted or possibly even created by Yelp itself.

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Mar 19 2014

NYSLA Says Certain Brunch “Bottomless Glass” Specials Are OK?

bottomless Glass BrunchUnlimited drink specials are illegal in New York (with limited exception for private events).   This Prohibition included “bottomless glass” of champagne brunch specials but it is regularly ignored because most owners are simply not aware of it. However, the prohibition was recently placed into the spotlight and the New York State Liquor Authority (NYSLA) issued the following statement on Feb. 26, 2014 which was supposed to ease and clarify the prohibition:

“Serving unlimited drinks to a patron is prohibited under the Alcoholic Beverage Control law, and instances of over serving by our licensees will be investigated and prosecuted.   However, there is a limited exception in the statute when the service of alcohol is incidental to the event, such as in the case of certain brunch specials.  Even under these limited exceptions, licensees still have a legal obligation not to over serve patrons.  The SLA will continue to take a balanced regulatory approach by allowing licensees to conduct specials where alcohol is an accompaniment, while simultaneously cracking down on specials that promote excessive drinking.”   -New York State Liquor Authority

The New York City Hospitality Alliance publicly commended the NYSLA for issuing this statement and for providing such clarity.  However, all the rest of us must have missed the “clarity” that the NYC Hospitality Alliance apparently saw in that statement.

“…there is a limited exception in the statute when the service of alcohol is incidental to the event, such as in the case of certain brunch specials.”  When is the service of alcohol incidental to the event/brunch?  Always?  Sometimes?  When there are pancakes on the menu? Why just brunch?  If the service of alcohol can now be now deemed incidental during brunch, why is it not deemed incidental during lunch or dinner as well?

The reality is that the NYSLA statement provides no clarity whatsoever on the prohibition and in fact causes more confusion because now there appears to be some new exception to the prohibition that applies to certain brunch specials . . .but leaves us all in the dark as to the necessary elements of this exception.  Until there is some actual clarification or specifically stated exception to the prohibition, we still recommend that you do not offer any unlimited drink specials during brunch, lunch, dinner or otherwise.

 

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Jan 27 2014

NY Restaurants and Bars Must Obtain a License to Play Music.

party-disco-restaurantMusic is protected by copyright law, which provides exclusive rights to copyright owners to perform or play their songs. If a restaurant or bar plays music without permission, they are infringing on the copyright, and copyright law allows the owner to recover damages ranging from $750 per violation, to $150,000 if a court decides the infringement was willful.

In Range Road Music, Inc. v. East Coast Foods, Inc., the Court of Appeals found a restaurant violated copyright laws when it played music without a license. The court awarded the Performing Rights Organization (PRO) nearly $200,000 in damages and attorney’s fees. PROs employ investigators that visit businesses to see whether songs are played without a license.

One exception to the rule allows restaurants or bars under 3,750 square feet to play music from a radio, television, or similar household device without a license, provided there are fewer than six speakers (with limits on the placement of speakers), and customers aren’t charged to listen.

Songwriters, composers and music publishers generally join one of three Performing Rights Organizations that license their work to the public: the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC . The PROs send royalties to the copyright owners.

However, obtaining a license from one PRO doesn’t necessarily mean you’re in the clear — you only have a license for that PRO’s copyright holders. For example, the composer of a song may be represented by ASCAP, while the lyricist may be with SESAC. To avoid this problem, most restaurants and bars choose to purchase a blanket license from each of the PROs, which allows the licensee to play any of the music from each PRO’s library. Blanket licenses can range from the low hundreds to several thousands of dollars per year.  Like any other agreement, these licenses are fully negotiable.   When it comes time to securing one of these PRO licenses, hire an experienced attorney as they will be able to negotiate the best price for your specific establishment.

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Jan 10 2014

Mandatory Tip Policy? Consider Ditching it.

money tips In January of 2014, the IRS will begin cracking down on how restaurant owners pay out mandatory tips (e.g. the typical 18% mandatory tip for parties of 6 or more).  Going forward, these tips must be classified as service charges that are taxable as regular wages and subject to payroll tax withholding (aka more paperwork and accounting), rather than pooled into the tip cash servers divide at the end of their shift (which has been common practice until now).

Though the policy isn’t a new one, having been issued in June 2012, the implementation was delayed until 2014 to give restaurants time to comply.  Some restaurateurs have already chosen to ditch the mandatory tip altogether rather than having to deal with the increased paperwork and fees.

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