Changes in laws and regulations kept the U.S. hotel industry on its toes this year.
From bills that could change how hotel franchises work in one state to joint-employer standards to a U.S. Supreme Court case that didn't actually do much, hoteliers have had to stay attuned to each new development.
Here's a roundup of legal topics covered by Hotel News Now in 2023.
After months of sitting in various statehouse committees, a bill that could upset the hotel franchise model made its way this fall from New Jersey's General Assembly to its state Senate. Known as Assembly Bill 1958, it would affect several areas in the relationship between hotel brands, or franchisors, and hotel owners flying those brand flags, the franchisees. These include the sourcing of goods and services, brand standards in the operations manuals and the logistics of brand-wide loyalty programs.
The American Hotel & Lodging Association opposes the bill as it stands. AHLA President and CEO Chip Rogers said in an interview that the bill has multiple problems, including how it addresses brand standards, how it focuses specifically on the hotel industry and that it makes the government step into the relationship between two private parties.
Laura Lee Blake, president and CEO of the Asian American Hotel Owners Association, said in an interview that her organization supports the New Jersey franchising bill, even helping rewrite it to remove some provisions that prevented it from moving forward in the statehouse committees.
“As a board, we went through and carefully reviewed every provision and proposed redlined amendments to the bill,” she said.
A decision by the National Labor Relations Board created a new framework that affects employees' rights to unionize and new rules for how employers can handle unionization efforts. One of the provisions from the decision is that if an employer seeking a union election commits an unfair labor practice, there's a greater chance the NLRB would require the employer to recognize the union and then bargain with it.
“It’s a very serious decision,” said Mike Carrouth, labor attorney and partner at Fisher Phillips, in an interview for Hotel News Now's podcast. “The landscape has changed. It is going to be much easier for an employer to end up with having to recognize a union than before.”
In a separate development, the NLRB published in late October its newest rule on joint-employer standards. Under the latest rule, the standard for whether two companies could be considered joint employers is much broader than the previous definition.
"The law at the time said you must actually exercise the control over that group of employees to be considered a joint employer," said Andria Ryan, partner at Fisher Phillips and co-chair of the law firm's hospitality group, on the Hotel News Now podcast.
In early November, the American Hotel & Lodging Association joined in a lawsuit alongside other business-related organizations to sue the Biden administration over the new joint-employer rule.
“The goal of this lawsuit is to reestablish the rule of law that has governed joint-employment designation for nearly four decades. It will also prevent the destruction of the franchise business model that has provided prosperity for tens of thousands of American small business hoteliers,” AHLA's Rogers said in the news release.
In October, the U.S. Supreme Court heard arguments in a case that could have led to greater clarity over whether people who review hotels' websites can sue the properties over the lack of an online description of the hotels' accessibility features. These plaintiffs, known as testers, do not necessarily intend to stay at the hotels, and hotel owners have long argued these testers therefore lack standing to sue.
In a podcast interview with Hotel News Now, Dana Kravetz, managing partner at law firm Michelman & Robinson, said the Acheson Hotels v. Laufer case could go in a number of directions.
“I'm not sure it's going to give anyone the satisfaction that they necessarily wanted when they first saw the case having been filed,” he said.
Kravetz was right about that. Earlier this month, the Supreme Court dismissed the case as moot because the plaintiff willingly dropped her lawsuit. Hoteliers will have to wait for another case to decide whether website description testers have standing to sue.
Pennsylvania's attorney general has been busy over the past few years, reaching settlement agreements with Marriott International, Choice Hotels International and, most recently, Omni Hotels & Resorts over the companies' disclosure of resort fees and "drip fees."
In an interview for the Hotel News Now podcast, Mark Adams, partner at law firm Jeffer Mangels Butler & Mitchell, said he expects these developments in Pennsylvania will motivate further transparency by hotel companies over these fees.
"It was a competitive disadvantage to do it voluntarily upfront because you would clearly kill your business because you couldn't advertise the same rates," he said. "But if everybody has to do it, then all boats rise together."