The Law of Unintended Consequences: Bar and Retail Store Owners Continue to Grapple with the Effects of Equality Legislation

(The following article was published in the Spring 2018 issue of Proof, a magazine published by the Minnesota Licensed Beverage Association)

Lawmakers and business owners do not always see eye to eye when it comes to progressive legislation. Where lawmakers are likely to see efforts to promote equality and fairness, business owners may see red tape and threats to the bottom line. The continued prevalence of “drive-by” lawsuits, misconceptions about the “#MeToo” movement, and the specter of rising minimum wages in Minnesota’s largest cities have not helped bridge the gap.

The laudable intentions behind the Americans with Disabilities Act (ADA), anti-harassment laws, and the $15 minimum can be lost in opportunism, skepticism, and dwindling margins. As the MLBA continues to push for legislation that attempts to bring a sensible balance to public and private interests, business owners need to protect themselves — not just because it is necessary to follow the law, but because success requires operators to avoid becoming the targets of aggressive plaintiffs’ lawyers who may not always be acting for the greater public good.

Americans with Disabilities Act (ADA)
The ADA and the Minnesota Human Rights Act (MHRA) prohibit “places of public accommodation” from discriminating against individuals with disabilities. Most any retail store, restaurant, or bar is a place of public accommodation. If the physical features at your property limit or prevent disabled persons from obtaining your goods and services (thereby turning into “architectural barriers” according to the ADA), you may become the target of a lawsuit.

Modern resources like Google Earth make it extremely easy for would-be plaintiffs to identify potential ADA violations. Most of the Minnesota lawsuits to date have targeted older buildings in the metro area. Recent reports to the MLBA suggest that plaintiffs’ lawyers appear to be broadening their efforts across the state. Regardless of where it is spotted, a missing sign or parking lot striping that appears off could trigger a more detailed, in-person inspection of the property. Once a would-be plaintiff takes the time to visit your property, your chances of being sued for real and perceived ADA violations increase significantly. These lawsuits almost inevitably cost owners thousands of dollars in construction costs for remediation, settlement payments, and legal fees.

To reduce the chances of becoming a target, begin on the outside of your property. Pay particular attention to the number and size of accessible parking spaces and related signage, route(s) of travel, and door entrance(s). Once the exterior of the building complies, move inside. Bathroom grab bars and countertop heights commonly find their way into a plaintiff’s complaint but can be fixed inexpensively before a problem arises.

Resources are available without consulting attorneys or other experts in the field. Numerous government agencies have published guidelines for key exterior and interior compliance issues — see, for example, https://www.ada.gov/racheck.pdf. If you are still unsure about whether your facility complies, it is best to seek professional guidance.

If you are sued for alleged ADA violations, do not try to handle the matter yourself. Most lawsuits end in some kind of settlement. Any settlement should be written in a way that reduces the risk of future lawsuits from the same plaintiffs or concerning the same alleged compliance issues.

Sexual Harassment
Sexual harassment has received renewed attention lately. Though the national news outlets focus on celebrities and the heads of Fortune 500 companies, inappropriate or offensive behavior can and does happen in all kinds of workplaces. Like other forms of gender discrimination, sexual harassment is prohibited by Title VII of the Civil Rights Act of 1964 and the MHRA.

Sexual harassment generally takes two forms. The first, quid pro quo harassment, usually occurs when a person in a supervisory role demands sexual favors in exchange for work-related benefits. The second, hostile work environment harassment, consists of unwelcome conduct that creates a demeaning, intimidating, or offensive working environment. Sexual harassment can occur irrespective of gender, and it is not limited to people in positions of power. Regardless of source, the anti-discrimination laws require employers to prevent sexual harassment.

The first step in avoiding discrimination lawsuits is planning. Business owners should adopt and enforce clear anti-harassment policies, and take the time to train the workforce about the policies. While the word “policies” invokes thoughts about administration and paperwork, it is helpful to think of them as a “plan” for what to do when inappropriate behavior occurs. Special training for supervisors puts the “plan” to work before the harassment occurs and can be invaluable in preventing small problems from becoming bigger. Because the only supervisor at a small employer may also be the alleged harasser, owners should provide staff with a resource outside the normal reporting channels. If employees know they have reliable alternative channels for reporting harassment by a manager, they are less likely to take their complaint to a local, state or federal equal employment opportunity office.

If inappropriate behavior is reported, employers should promptly and fairly investigate the matter. A fair investigation does not assume that either side is right or wrong. It listens to both sides of the story, discretely gathers information from other witnesses, and makes the best determination based on the information available. And regardless of the outcome of one particular investigation, it reminds and alerts everyone that offensive behavior is not only taken seriously – it will not be tolerated.

To help protect the business from significant financial exposure, employment practices liability (EPL) insurance may be available to cover claims alleging wrongful discrimination. Not all policies are created equal. Some cover liability and the costs of defense (such as attorneys’ fees), while others only cover costs of defense. Ask your insurance agent about the appropriate coverage(s) for your business.

And as with all kinds of discrimination claims, consult a legal professional if you are sued. While you might be able to reach a settlement with the complaining employee, any settlements should be conditioned on a full release of the employee’s claims. Discrimination statutes – Minnesota’s in particular – have detailed requirements for settlement agreements, such as review periods, rescission periods, and other magic words needed for the release to be enforceable in court.

Employee Compensation Issues
For business owners concerned about how the $15 minimum wage and paid sick and safe time ordinances affect their business, the best self-help remedy is to stay informed. In 2017, the Minnesota legislature passed a “preemption” bill that would have prevented local governments from adopting their own wage and benefit ordinances. Governor Dayton vetoed the proposed bill. While business groups may well renew their push for a preemption law during this year’s legislative session, it appears unlikely to pass in the current political climate.

Take your first step by finding out exactly whether or when you need to make the required changes. As of the writing of this article, Minneapolis is the only Minnesota city to pass such an ordinance. St. Paul is studying the issue but has not passed an ordinance as yet. Both cities have passed mandatory sick and safe time ordinances, and both have published informative, user-friendly websites on these topics. Consult a legal professional if you remain unsure of whether any of these ordinances apply to your business.

It is worth noting that, in response to changing minimum wage standards, some restaurants and bars have experimented with adding a surcharge as an alternative to raising menu prices. So far government authorities have not moved to expressly prohibit surcharges for this specific purpose. However, operators should take care to disclose the surcharge to customers in advance. The notice need not be a grand political statement. Just something to make patrons aware of the additional cost. Operators must also ensure that the surcharge proceeds are actually used for their advertised purpose. Use of surcharge monies for other purposes may expose the business to claims such as false advertising.

About The Author

Aaron Hartman