Federal Appeals Court Rules ADA Plaintiffs Can Sue Without Ever Visiting Properties
The 9th Circuit Court of Appeal, which covers all of the West Coast, has ruled that ADA plaintiffs do not have to visit a hotel before they can sue for ADA violations. Now, the federal appeals court has ruled that there is no difference in visiting or making a telephone call, and that as long as the plaintiff has some knowledge of an ADA violation the plaintiff can sue. The 9th Circuit also ruled that “testers” can file lawsuits even if their only intention for calling or visiting the hotel is to file a lawsuit stating that “motivation is irrelevant.”
This is a major blow to the hotel and business community as a whole, as it will definitely increase the amount of drive-by ADA lawsuits.
Many hoteliers are left with the question, “what can be done?” Get a CASp report prior to being sued. It grants a 4-month cure period after you have received the report. These laws are only partially helpful however as California can only defeat the state law claims, while federal ADA claims remain undeterred. Currently, Congress has legislation similar to California’s that is currently pending, but in the meantime hotels and businesses remain completely exposed to unchecked and frivolous lawsuits.
If you need advice on the new risks and the way to fight them (like CASp reports)
CASP: Your First Line of Defense
Due to the number of inquiries we received asking for CASp inspections to be performed, my law firm looked into the pricing and found that inspectors are charging $4,000-$5,000. We felt those prices are too high, given the number of hotels we represent. Due to such, my law firm, has negotiated rates with a CASp inspector that can inspect any hotel in CA.
By performing these CASp inspections through a law firm you are able to benefit from the negotiated rates as well as the attorney client privilege. We were able to negotiate the following rates for you:
25 rooms and under. $1,250.
26-80 rooms. $2,000
81-120 rooms. $2,500
Additionally, we can send you a sample inspection report to understand what will be provided.
California Supreme Court Expands Employee Status Classification
On April 30, 2018, the California Supreme Court issued a ruling that expanded the number of workers that may be classified as employees and not independent contractors.
The “ABC” Test:
ALL workers are presumptively employees, unless the hiring entity can prove each of the following:
A. Worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; AND
B. Worker performs work that is outside the usual course of the hiring entity’s business; AND
C. Worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Please, make sure your Employee Onboarding Documents and Handbooks are up to date and comply with all Federal and State Regulations.
California Hotels Required to Provide Human Trafficking Awareness Training to Employees
On September 27, 2018, California Governor Jerry Brown signed SB 970 requiring California hotel and motel employers to provide “human trafficking awareness” training and education to employees.
Effective January 1, 2020, hotel and motel employers must provide at least 20 minutes of training to certain employees every 2 years; newly hired employees must receive training within 6 months of their hire dates.
Employees required to receive the training are those who are likely to interact or come into contact with victims of human trafficking including, but not limited to: employees who work in the reception area, perform housekeeping duties, help customers in moving their possessions, or drive customers.
Salaried vs. Hourly Employees Classification
In order to be considered a Salaried, Exempt employee in California, an employee will generally need to meet a strict duties test. For most exemptions, more than fifty percent of an employee's time must be spent performing exempt job duties (i.e. performing managerial duties and not running the front desk nor performing housekeeping services).
Exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full time employment. Paying an employee a salary does not make them exempt, nor does it change any requirements for compliance with wage and hour laws. (Calculation: Minimum Wage times 2 times 2080 = Minimum Salary)
Tax Reform: Opportunity Zones
Opportunity Zones are designed to spur economic development by providing tax benefits to investors.
First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%.
Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.
Sexual Harassment Lawsuits
The EEOC filed 50% more sexual harassment lawsuits in Fiscal Year 2018 (2018) than it did in Fiscal Year 2017 (2017).
Charges filed with the EEOC alleging sexual harassment increased by more than 12% from 2017.
For charges alleging harassment, reasonable cause findings increased to nearly 1,200 in 2018 compared to 970 in 2017. Successful conciliations (agreements reached without a lawsuit) were up to nearly 500 from 348 in 2017.
The EEOC recovered nearly 50% more for victims of sexual harassment through administrative enforcement and litigation in 2018; $70 million, up from $47.5 million in 2017.
ADA Website Discrimination
Lawsuits for ADA Website Discrimination are becoming more and more prevalent across California. Recently, one hotel owner was served with a lawsuit on Monday and later served with a second lawsuit on Thursday.
There are steps that you can take in order to make your website compliant in the current landscape:
First, list your ADA room types on your own website AND on the OTAs (Expedia, Booking.com, etc.)
Second, list the Room Features in the Description section that make your room an ADA Accessible Room (i.e. roll-in shower, grab bar, lowered peep hole)
Third, Post a policy that states ADA rooms will be held exclusively for those with ADA needs and those without ADA needs are not to reserve the ADA room.
For a list of Room Features to include in your description, please email me at
Resident Managers are a way for Hoteliers to decrease their Payroll Expenses and make the numbers work for investing in a property. However, if you do not have the proper documentation of the employment and housing relationship, the liability can amount to a lawsuit that can cost upwards of $20,000 per year worked.
Lawyers are constantly engaging employees to sue their employer to make free money, especially in CA. Be careful not to fall into the trap of "it will never happen to me." It is only a matter of time until it does.
Please, be sure to have proper agreements and documentation when entering into an employment relationship with anyone.