The hospitality industry is renowned for many things. One thing human resource managers should be aware of is the link between the hospitality industry and lawsuits. The threat of litigation has always been extremely high.
In 2015, for instance, the hospitality industry was the most sued industry by the Equal Employment Opportunities Commission (EEOC). The bulk of those lawsuits were filed against hotels and restaurants. This, though, doesn’t mean that the other sectors within the industry are spared.
According to Bloomberg Law data, the number of lawsuits brought against cruise companies numbered at 88 within the first 3 months of 2018. This keeps up with the upward trend in lawsuits over the past few years. For instance, the total number of lawsuits brought against cruise companies was 188 in 2017, a significant rise from the 164 recorded in 2016.
These lawsuits just continue to mount.
The Background Checks Connection
The largest proportion of lawsuits filed against hospitality businesses typically arise from some form of harm coming to clients. For instance, the Bloomberg Law data showed that the 3 most sued cruise companies over the last 5 years were Carnival, Norwegian Cruise Line, and Royal Caribbean International. For each of the three, the total proportion of the lawsuits which arose from personal injury were 86.4%, 80.4%, and 77% respectively.
86.4% of Carnival Cruise Line’s lawsuits arose from personal injury.
80.4% of Norwegian Cruise Lines’ lawsuits arose from personal injury.
77% of Royal Caribbean International’s lawsuits arose from personal injury.
Almost all personal injury lawsuits typically include holding the companies liable for negligence. A core component of this negligence is typically “negligent hiring”. This basically means that a company did not conduct thorough investigations (background checks) prior to hiring the individual.
Businesses in the hospitality industry sometimes take background checks for granted. This is often the case for two reasons. First of all, many businesses typically hire individuals for minimum-wage positions. Most of these positions do not require highly specialized skills. Recruiters are often rather reticent about conducting thorough investigations. In some cases, the recommendation of a current employee is enough to get someone a job.
Secondly, hospitality businesses sometimes hire staff on a short-term basis. As such, most recruiters consider thorough background checks an unnecessary expense. If someone is going to work for 8 to 12 weeks (as in the case of students who are in their school breaks), it seems like overkill to conduct an exhaustive background check on them.
Not conducting a background check on a prospective employee is perhaps the biggest legal mistake a business can make. For hospitality businesses, it is even worse. This is because hospitality businesses typically involve employees interfacing with clients – often in private settings. Having a person of questionable morals, character or criminal history within the staff is a legal catastrophe waiting to strike.
The best way to understand the dangers of not conducting proper background checks is by profiling some hospitality businesses which have been sued over the years. Here is a summary of some of the lawsuits faced by hospitality businesses over the last few years. For easy navigation, we shall arrange the lawsuits according to sectors.
Hotels, Resorts, Casinos
1. Vacation Home Sued for Negligent Hiring
In October 2016, the 4th Texas Court of Appeals reinstated a case brought against the Flagship Hotel on Galveston Island, Texas. This case – which had initially been thrown out by a lower court – had been brought by the parents of a 15-year-old boy in 2015.
According to the lawsuit, the 15-year-old, while on a vacation with his family was staying at the hotel. He was lured into a room by a hotel employee (a bellman) who had earlier made sexualized gestures at him. The bellman had lured the teenager into a banquet room, locked the door, turned off the lights and sexually assaulted the boy.
The boy’s parents had sued the hotel for negligent hiring. The bellman hadn’t been subjected to a criminal background check by the Flagship Hotel prior to being hired. The reason is that the bellman had been hired on the personal recommendation of another employee. The lawsuit alleged that had the Hotel conducted a background check, they would have discovered that the bellman had a history of inappropriate sexual conduct.
2. A Mandalay Bay Resort Sued For Negligent Hiring Over Rape
When an employee raped a client at the Mandalay Bay Resort and Casino in Las Vegas – Nevada, the resort found itself slapped with a negligent hiring lawsuit. According to the case files, the guest had booked a room at the Mandalay during a trip to attend a trade show in Las Vegas. One night, after binge-drinking up to around 2 am, the guest returned to her room and was followed by a security guard who then proceeded to sexually assault her. The resort was slapped with a negligent hiring lawsuit for not performing a background check on the employee prior to hiring him.
Applebee’s Owners Pay $1 Million in EEOC Suit
In September 2011, the owners of Applebee’s restaurant agreed to one of the largest payments of its kind in North Dakota’s history. This was a $1 million settlement which was paid to 17 former employees of the restaurant.
The lawsuit arose from a series of sexual harassments meted by the General Manager.
The restaurant got sued for negligent hiring and retention. Numerous complaints made by both employees and customers had led to no action from Applebees. When an employee filed a complaint with the EEOC, the agency sued Applebee’s and won the historic settlement.
Cruise Company Sued Over Death of Passenger On Board
In January 2018, a court ruled against a wrongful death claim brought against NCL (Bahamas) Ltd by the estate of a passenger who had died during a cruise. The roots of the lawsuit arose from a passenger getting sick during a cruise, getting treated by NCL’s medical team, and subsequently passing away.
The estate of the deceased passenger bought a lawsuit against NCL, accusing the company – among other charges – of negligent hiring/retention. The suit claimed that the medical team which treated the passenger lacked the adequate training to treat the kinds of sicknesses which can arise on a cruise ship. According to the suit, had the passenger had access to qualified medical personnel, the death would not have occurred.
The company was thus held liable for negligently hiring the medical staff by failing to properly vet their academic and professional qualifications and experience. The lawsuit was ultimately dismissed because the plaintiff’s lawyers were charged to present proof that sufficient background checks did not occur. When they couldn’t provide the evidence, the court threw out the case.
Background checks are essential for all kinds of things. If NCL had not carried out sufficient background checks on members of the medical team, it would have certainly been found guilty of negligent hiring.
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Celebrity Cruises Sued Over Ankle Injury to Passenger
On June 25th, 2018, a US District Court in Florida upheld a lawsuit brought against Celebrity Cruises Inc. by a passenger over an injury sustained during a cruise organized by the company. According to the lawsuit, the plaintiff (Jennifer Ceithaml) and her husband were passengers on a cruise ship called the Celebrity Summit.
Part of the cruise involved an off-shore excursion in which the passengers participated in zip-lining. It was during this excursion that the plaintiff injured her ankle. The lawsuit claimed that the injury was as a result of the negligence of the zip-line operator – an employee of Celebrity Cruises Inc. A combination of the actions of the zip-line operator is what led to the injury.
One of the grounds for suing the company was “negligent hiring and retaining the zip-line operator”. The suit claimed that the company did not fully investigate and test the operator’s capacity to guide passengers – a fact which led to Ceithaml’s injury since it was the instructions from the former which led to the injury. After reviewing the facts of the case, the court ruled in favor of the plaintiff.
Norwegian Cruise Liner Sued Over Sexual Assault on Minor By Employee
In January 2018, a family from Iowa filed a negligent hiring lawsuit against Norwegian Cruise Lines. The lawsuit resulted from a sexual assault committed against a 12-year-old girl during a cruise out of Miami in February 2017.
The family sued Norwegian Cruise Lines for negligent hiring. According to the suit, the company is accused of not conducting a thorough background check on the employee prior to hiring him. This fact – the lawsuit claims – means that the company essentially put the little girl within reach of a sexual predator.
Tour Bus Company Sued Over Death Of Woman Knocked Down By Driver
Pontarelli Group Charters, Inc. was sued over the death of a woman who was knocked down by one of the company’s buses in Chicago, Illinois. The woman was knocked down as she crossed the street in the marked crosswalk, with the light indicating green for passengers. After the incident, the driver was detained and tested positive for cocaine.
The lawsuit alleged that the Ponterelli Group Charters – a company which offers tour and travel services – was negligent in hiring the driver. This is because prior to being hired, the driver (named David Soto) was already a convicted felon with 20 citations for traffic violations. Due to his numerous infractions, David Soto’s Commercial Drivers Licence was suspended for a while back in 2008 before being restored.
The major claim by the plaintiffs was that if the tour bus company had conducted the proper background checks, they would have found out that David Soto is a potentially dangerous driver. The fact that they hired him indicates that the company did not do its due diligence and is therefore liable for negligent hiring.
University of California Sued Over Death of Football Player
In August 2014, the family of a deceased football player filed a lawsuit against the University of California for wrongful death. The lawsuit alleged that the university’s negligent hiring practices, as well as the reckless behavior of its staff, caused the death of Ted Agu – a fifth-year senior at the university.
Agu had died in February 2014 following a conditioning drill session during the off-season. The player had a sickle cell trait which – according to the National Athletic Trainers Association – makes individuals susceptible to oxygen restrictions to the muscles and organs. Athletes with this condition are not supposed to be subjected to certain strenuous regimes – according to National Collegiate Athletic Association (NCAA) guidelines.
The lawsuit claimed that the coaches and trainers at the University of California are supposed to have known about Agu’s condition. This is because the NCAA had revised guidelines to ensure mandatory testing of all athletes for the trait in 2010 following the death of another student in 2006.
The lawsuit also claimed that the University of California was negligent in hiring Robert Jackson – the trainer in charge of the drills when Agu died. This trainer was already implicated in the death of another student-athlete at the University of Central Florida under similar circumstances in 2008. That death led to a jury rewarding a $10 million wrongful death settlement citing negligence by the University of Central Florida – although the settlement was later capped at $200,000.
The core claim of negligent hiring is that the University of California should have conducted a background check and discovered Robert Jackson’s previous involvement in the death of a student-athlete. This negligence contributed to Agu’s death.
Cleveland McDonald’s Manager Accused of Shooting Customers
In February 2018, a manager at a McDonald’s drive-through restaurant shot at customers who had just made a purchase from the restaurant. Supposedly, one of the customers accidentally spilled their water, which splashed towards the drive-thru window.
This apparently infuriated the manager who hurled verbal abuse at them before pulling out a gun and firing two shots at the customers. Fortunately, the customers were in the process of pulling away. No one was hurt – although one bullet got lodged in the tail light of the car. The manager then went on the run.
Immediately, questions started arising about McDonald’s hiring policies. This is because the manager was a 52-year-old man with a criminal record consisting of 8 convictions for a number of cases including drug possession, carrying a concealed weapon, illegal possession of a weapon as a felon, attempted trespassing, unlawful restraint and forgery.
Hospitality Businesses Take Note
What should you take from this? Background checks are absolutely essential. The risk of not conducting them is simply too great. You can end up exposing yourself to unnecessary lawsuits. Therefore, it is critical to find a background check service, like with Crimcheck. Get in touch with us, CLICK HERE!