The Law Blog of DiPasquale Law Group

Tuesday, December 16, 2014

NYC Automatic Gratuity Lawsuit Dismissed
If you have ever been to a restaurant with a large group of people, you are probably familiar with the concept of automatic gratuity.  Automatic gratuity is added to the bill so that the customer tips the staff a predetermined amount as opposed to at his or her own discretion.  When a restaurant is going to assess this charge, they usually inform customers in advance by noting the policy on the menu or in another conspicuous place.  This is a common practice, especially in New York City, where dining out is essential to tourism and to the daily life of residents of the five boroughs.   

Recently, a class action suit was brought against the owner of Darden Restaurants as a result of the empires automatic gratuity policy.  The plaintiff brought the lawsuit in the United States District Court claiming that adding automatic gratuity to a bill was an unlawful and deceptive business practice under the laws of New York City.  He also alleged that the restaurants failure to disclose drink prices on the menu fell into the same category.  

While New York City does regulate surcharges assessed by restaurants, these laws do not create a private legal action, even if colored as consumer fraud protection claims.  This concept was reinforced when U.S. District Court Judge Katherine Polk Failla dismissed the case against Darden Restaurants.  The judge found that because the restaurants clearly outlined the policy of the menu and customers who disagreed with the policy could choose not to eat at the establishment, there was no violation.  She also found that since most customers tipped at a higher rate and that because diners could inquire about the cost of drinks before ordering, there was no injury in this case.

While all restaurants should be careful to abide by laws relating to automatic gratuity and other surcharges, they are still allowed in New York City.  If you have a legal matter relating to these policies, contact the restaurant law attorneys at the DiPasquale Law Group today by calling (646)383-4607.

Tuesday, November 25, 2014

Recreational Marijuana Use Law Will Be Pushed Next Year
In 2014, the State of New York legalized the use of medical marijuana.  The possession and private use of minor amounts of the substance has been decriminalized in the state since 1977. Even so, tens of thousands of arrests are made each year in New York City for what is characterized as public use of the drug.  Now, legislators are seeking to put an end to that.

Democratic Senator Liz Krueger is committed to pushing the Marijuana Regulation and Taxation Act in early 2015.  The bill was introduced last year, rejected and has since been amended.  If passes, it would allow marijuana dispensaries regulated by the State Liquor Authority to be launched in New York.  The marijuana would be taxed and individuals would be permitted to possess two ounces and six plants for personal use only.  

Legislators backing this bill hope that the changes made to the tax and employment provisions since its introduction will be enough to gain the support it needs.  Some, like Governor Andrew Cuomo, have not taken a clear stance on the issue, although he has hinted that he does not support legalizing the drug for recreational use.  If the bill gains enough support, the law could be passed and go right into effect.

Senator Krueger’s chief of staff has said that the true inspiration behind the bill is the disproportionate amount of arrests of people of color for marijuana possession and use in places like New York City.  Senator Krueger has said that although she does not use marijuana herself, she believes that it should be considered a matter of public health.  Only two other states, Colorado and Washington, have legalized the recreational use of marijuana. Although a number of states are also considering bills of this kind.

The Dispasquale Law Group deals with all matters relating to the New York State Liquor Authority, including assisting clients in obtaining liquor licenses.   Should the Marijuana Regulation and Taxation Act pass, the firm plans to branch out into this new and exciting practice area.  If you have a question relating to a restaurant, liquor license or any other State Liquor Authority matter, call the New York attorneys at the DiPasquale Law Group at (646)383-4607.

Thursday, October 23, 2014

Brooklyn Bar Challenges Cabaret License Law

In 1926, New York City enacted the Cabaret Law.  This law is meant to regulate nightlife activities in bars, restaurants and other establishments.  The legislation has undergone many challenges and has been amended since, but it still not a popular law.  Even Michael Bloomberg tried to change the law during his term as Mayor.  In a 1988 case, the portion of the law prohibiting live music was found to be unconstitutional.  While the portion of the law prohibiting dancing has been challenged, it still stands.  Now the main effect of the law is essentially to prohibit dancing in any establishment without a City issued cabaret license.

In order to obtain a cabaret license an establishment must meet certain surveillance and security requirements and appear before their local community board.  They are then asked to pay a fee, sometimes as much as $1,000, for a license that lasts two years.  

Now, the owner of Muchmore’s a bar in Williamsburg, Brooklyn, is challenging the law again in Federal court.  The bar has live music almost every evening but does not have a cabaret license so customers are not permitted to dance. Owner, Andrew Muchmore, is claiming that the law is unconstitutional as it is violates Fourteenth Amendment due process and runs counter to the First Amendment freedom of expression provision of the United States Constitution.

As the City really does not enforce it (collecting only $350 in fines in 2012) and most applications for licenses are approved, the law is seen by many as a moot regulation still in place only to make the owners of establishments jump through hoops, sometimes at a great expense.  While the New York City Department of Consumer Affairs maintains the position that the purpose of the license is safety, they also admit that they are looking at a number of laws, including the Cabaret Law, to see if they can be revised.  

If you are a restaurant, bar or nightclub owner and are seeking a cabaret license, contact the New York restaurant lawyers at the DiPasquale Law Group by calling (646) 383-4607 for a consultation.

Thursday, October 09, 2014

Restaurant Workers Plagued With Sexual Harassment

Sexual harassment is defined as unwanted sexual propositions, gestures and language and is a problem in almost every industry.  The restaurant industry is particularly susceptible to these types of problems.  This industry employs a large number of people, many of which are paid at or below minimum wage.  Tipped workers are often paid a fraction of minimum wage as tips are supposed to make up the rest of their salary.  Although many state minimum wage laws dictate payment above these levels, Federal minimum wage for untipped workers is $7.25 while for tipped workers it is $2.13.

There has been a push at the Federal and state level to raise the wages of tipped restaurant workers either by paying them the same as untipped workers or raising the minimum wage altogether. A new study, put out by the Restaurant Opportunities Center United and called "The Glass Floor: Sexual Harassment in the Restaurant Industry", has provided further inspiration for these legislative changes.  The study, done this year, involved almost 700 restaurant workers from 39 states and shows that sexual harassment in the restaurant industry is occurring at a shocking rate. Many of the workers were from states where there was a gap in the minimum wage between tipped and untipped workers.  

While females are affected by sexual harassment more frequently, men are also subjected to it.  Tipped female workers were found to be harassed the most as they are required to do certain things that make them the targets of harassment by customers and other employees.  The study showed that two-thirds of women in the restaurant industry were sexually harassed by their superiors while three quarters of them were harassed by other employees on a monthly basis.  It also showed that one-third of women were harassed by customers on a weekly basis.  High numbers of men and women were sexually harassed by their higher-ups, but, women working for the Federal minimum wage of $2.13 per hour were harassed almost two times as much as those receiving the $7.25 hourly rate.

If you are a restaurant owner or operator and are having issues with sexual harassment at your establishment, you should consult with an experienced attorney today.  Contact the New York restaurant lawyers at the DiPasquale Law Group by calling (646) 383-4607.

Thursday, September 25, 2014

Wage and Hour Lawsuit Brought Against Famous New York City Restaurant

Wage and hour issues are common in the restaurant business.  With the complexity of the wage and overtime laws and spotty enforcement, many restaurant owners do not even know they are committing a violation.  There has been an explosion of wage and hour stories covered by news outlets in recent years.  Due to the enhanced awareness of wage and hour laws, there has been an increase in labor and employment lawsuits focusing on these issues, especially by those in the restaurant business.  An example is a recently filed suit against a famous upscale New York City restaurant.

Le Cirque restaurant caters to royalty, politicians and celebrities of every caliber.  With sky-high prices and white glove service, allegations of cheating employees out of wages may come as a surprise to some.  Former employee, Elvis Pena, claims he worked in various positions at Le Cirque including runner, bus boy and waiter and that during this time, he was not paid minimum wage.  Although he worked well over 40 hours a week, Pena claims that the restaurant did not pay him overtime wages.  He also asserts that he was forced to pool his tips with other employees and share these tips with captains, who are considered management, in violation of state and Federal labor laws.

Pena has filed a class action suit against the restaurant and its owner, Marco Maccioni, in a Federal court in New York City.  His attorney has stated that over 100 former and current employees of Le Cirque may be able to join the lawsuit as plaintiffs.  For now, Pena is seeking monetary damages.

It is unfortunate, but many restaurant owners have to deal with wage and hour lawsuits during their careers.  As the labor laws change, it is important to stay apprised of updates to ensure compliance with the newest regulations.  If you have been accused of a wage and hour violation or would like to discuss compliance with a qualified restaurant law attorney, contact the DiPasquale Law Group by calling (646) 383-4607.

Thursday, September 18, 2014

Changes to the Way NYS Restaurant Workers Are Paid May Be On The Way

Restaurant workers are paid in a number of different ways.   Usually, employees that do not have the opportunity to make tips, such as managers, hostesses and kitchen staff, are paid a salary or an hourly wage that is at or above the required state and Federal minimum wage.  Those that do have the ability to make tips, such as servers, bartenders and sometimes bus boys, are paid at an hourly rate that is below minimum wage.  The thought is that by collecting tips the workers will make at least the minimum wage if not surpassing it.  If the employee does not make at least as much as they would if being paid minimum wage, the employer is required to make up the difference.

Now, New York State service workers might be getting a raise.  Service workers include restaurant workers that make tips.  Various groups, including labor unions and service worker organizations, are pushing for these parties to be paid at least minimum wage, even if they are tipped.  They have submitted their pleas to state officials and it is now up to the state wage board to make a recommendation.  Once the board makes a recommendation, the New York State Labor Commissioner is responsible for making a final decision, which is expected in February of 2015.  

Over the next couple of years the New York State minimum wage will be increasing and will be at a rate of $9 an hour by the last months of 2015.  There have been many local and nationwide efforts to raise state and Federal minimum wages over recent years but localities such as New York City have resisted.

What does this all mean for restaurant owners?  Higher costs!  The requirement that service workers be paid more coupled with the increase in state minimum wage could mean that many restaurants will have to operate with fewer employees who are working fewer hours.  This will surely add to the struggle of owning a restaurant, especially in the extremely expensive New York City area.

The New York City based DiPasquale Law Group represents restaurant owner clients with employee wage and tip issues.  Call us at (646) 383-4607 for a consultation today. 

Saturday, September 13, 2014

Judge Finds For City in Suit Challenging Department of Health Inspections

The relatively new Department of Health restaurant inspection system has been the source of constant anxiety among restaurant owners in New York City.  As a result, a group of restaurateurs has brought suit against the City in the Manhattan Supreme Court.

The group of almost 40 restaurant owners attacked the system in its entirety.  They claimed that instead of making it better for restaurants in the City, being subject to the scheme has been bad for business in general.  The penalty structure, which is widely accessible via the internet, designates fines ranging from $200-$1,000 for listed violations.  The plaintiffs claimed that these fines are assessed arbitrarily and for the sole purpose of raising revenue.  They also alleged that often times, due to the differing experience of inspectors, the fines that were originally assessed were then increased when the site was visited by an supervisor. The plaintiffs also claimed in their suit that the City Council overstepped their authority when passing parts of the charter legalizing the Department of Health regulations.  They asserted that the provisions were unconstitutional as the City Council did not have the authority to pass them in the first place.  The group also sought changes to the appeals process and $150 million in damages.

The City challenged the suit stating that they did not overstep their authority and that there was no problem with the fines and a Supreme Court Judge agreed.   She found that provisions of the charter were not unconstitutional, using the recent overturn of the ban on large soft-drinks as an example.  She also decided that there was no problem with supervisors increasing fines after inspections, as they are supposed to be better at finding violations, and that the fines were not excessive.  The plaintiffs’ attorney stated that he would appeal the decision as the Department of Health inspection system has caused, and will continue to cause, “tremendous injustices” for restaurant owners.  

If you are a restaurant owner and need representation with regard to compliance with the Department of Health, contact the DiPasquale Law Group.  Call us at (646)383-4607 for a consultation today. 

Friday, August 29, 2014

Boozy Brunch Might Lead to Loss of Liquor License

Earlier in the year, there was some controversy regarding the legality of the ever popular bottomless brunch in New York City.  On Saturdays and Sundays a large number of New Yorkers attend all you can eat brunches that also include unlimited alcohol.  Now, one NYC hot spot might be losing its liquor license due to problems resulting from its booze-filled brunch.

Pranna Restaurant on 28th and Madison offers a $45 brunch that includes unlimited alcoholic drinks such as mimosas and sangria.  Residents of the area are claiming that this is causing a major problem in the neighborhood.  They allege that the excessive drinking is resulting in customers leaving the restaurant belligerent or being escorted out because of severe intoxication.  The patrons are unable to walk, throwing up and urinating in the street, lying down on the sidewalk, sitting in the street and fighting.  Residents also say that the restaurant is creating excessive noise and the customers are littering in the area.  Many of the complaints have been documented by residents using photographs and video recordings.  Residents also claim that the restaurant is operating as a nightclub with a club atmosphere and cabaret girls.  If Pranna was a nightclub this might not be such a big problem.  But, the establishment is a restaurant is not authorized to operate as a nightclub.

The local community has had enough and a Community Board meeting was scheduled.  The issue at hand was the renewal of Pranna’s liquor license and community members were given a chance to present their concerns.  The Board decided to give the restaurant three months to clean up their act.  If the situation is remedied during this time the establishment will be able to keep their liquor license.  If the problems continue, their liquor license renewal will be denied and their license will be revoked.  The restaurant owner presented a list of approximately 100 other NYC restaurants that offer a bottomless brunch but stated that he would do whatever it takes to keep his liquor license.

The DiPasquale Law Group has represented many NYC restaurants, bars and other establishments in applying for their liquor license as well as in the appeal of the denial or revocation of such.   If you own an NYC establishment and are having an issue relating to your liquor license, call us at (646)383-4607 for a consultation today. 

Tuesday, August 26, 2014

Seminar Reminder: Restaurant Management Bootcamp 2.0 - Legal Considerations when Opening a Bar or Restaurant

This Thursday August 28, 2014 from 5:30 to 7:30 p.m. I’ll be giving a seminar in the Restaurant Management Bootcamp 2.0 Series that is hosted by NYC Small Business Solutions.  The Course Description is copied below:

Restaurant Management Bootcamp 2.0: Legal Considerations when Opening a Bar or Restaurant
An insider look at tips, tricks, and best practices to start your first restaurant in NYC, presented by Restaurant Attorney James D. DiPasquale.  To start and run a successful restaurant you must understand many different legal considerations which make operating in New York City, particularly unique.  Whether you are a new or existing restaurant owner, this special follow-up to the Restaurant Management Bootcamp class will help you gain a deeper understanding of all of the basic requirements to get your business up and running.

• Incorporating or forming a Limited Liability Company (pros/cons of each)
• Partnership Considerations (The legalities of dealing with your business partners and investors)
• Finding  your restaurant space (Buying an existing restaurant vs. straight lease)
• Negotiating your Restaurant’s lease
• Liquor License overview
• General discussion on permits needed (food service/cabaret/sidewalk café, etc.)

To Register, click on the following link:

Thursday, August 14, 2014

Katz Deli Copycat Case Settled

New York City restaurants are subject to intense competition.  These businesses work hard to establish and maintain their good reputations.  Why should anyone else benefit from that if they have not put the work in?  This is at the heart of a recent lawsuit filed by Katz’s Delicatessen of Houston Street Inc.

The famed Katz’s Deli has been serving genuine Jewish food in New York City for over 125 years.  The establishment is a landmark and has been featured in many movies and television shows.  Earlier this year, Katz’s Deli decided to do something about a Florida restaurant that was operating under a very similar name.  Katz’s Deli of Deerfield Beach, owned by Pump-A-Nickel Corp. Inc., is also selling Jewish foods, which makes it seem even more like the two restaurants are related in some way.  In the spring, Katz’s Deli sent a cease and desist letter to Pump-A-Nickel which they claim was ignored.  Katz’s Deli had no choice but to file a lawsuit against Pump-A-Nickel alleging trademark infringement and dilution (lessening the uniqueness of a trademark).  They claimed that Pump-A-Nickel was trying to unlawfully capitalize on their famous reputation and that this resulted in at least $1 million dollars in damages.  Katz’s Deli also argued that Pump-A-Nickel had engaged in cyber squatting by using the domain name

The parties came to an amicable resolution in a short amount of time.  Just a few months after the lawsuit was filed the parties have signed a settlement agreement including that Pump-A-Nickel is prohibited from any behavior that might lead others to believe that the businesses are related and any behavior that might appropriate the reputation and goodwill of Katz’s Deli.  Both parties signed the settlement agreement and no damages were assessed.  

The DiPasquale Law Group has protected the rights of countless New York City restaurants in a variety of situations.  If you are a restaurant owner or are attempting to open a restaurant and you feel your rights have been violated, call us at (646) 383-4607 for a consultation today. 

Tuesday, July 29, 2014

High Rents Causing Chaos for NYC Restaurants

New York City retail rents have increased astronomically over the last decade or so.  Many restaurateurs entered into 10 or 15 year leases when NYC was a different place with less trendy neighborhoods and much lower rents.  Now, market rent has doubled or tripled and those restaurant owners with expiring leases are in a pickle.

The struggle is common one between lessors and landlords.  Restaurateurs that signed a lease long ago have been benefiting from low rent for many years.  Landlords have been losing out on market rent since rents started to skyrocket and are often waiting for the current lease to expire so that they can raise the rent.  With rents in some neighborhoods reaching $5,000 per square foot, these increases are forcing many restaurants to move to less expensive neighborhoods or worse, close their doors.  Even well known restaurants are falling victim.

Establishments as famous as Bobby Flay’s Mesa Grill have been forced to close.  While others, such as the Union Square Café and Four Seasons might be in the same situation very soon.    

But, is it the landlords fault?  Some believe that the rental increases are the work of greedy landlords and that these property owners should realize that often times, a restaurant is responsible for making the neighborhood fashionable.  Others can sympathize with property owners who want to make the most money and have the opportunity to do it in the thriving competition present in NYC.

With celebrity chefs struggling, it is nearly impossible for young entrepreneurs to start out in the NYC restaurant business.  These young people are forced into the Brooklyn real estate market, which can be almost as tough. Some established restaurateurs have dealt with the rental problem by buying the property they hope to use for their restaurants.  Unfortunately, this approach is not available to everyone and some organizations are therefore pushing for another solution to the problem.

If you are a restaurateur with an expiring lease, or are trying to enter the restaurant business and looking to negotiate a lease, it is in your best interest to hire an attorney experienced in these matters.  The DiPasquale Law Group regularly practices in restaurant law and can help to get you into the property you want.  Call us at (646)383-4607 for a consultation today. 

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The DiPasquale Law Group is a full service law firm that assists Restaurant and Nightclub Owners in all legal aspects of their business. Serving Manhattan, Brooklyn, Queens, and the Bronx in New York City. Attorney James DiPasquale, Principal.

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