For more than two decades, a trio of legal issues — attrition, cancellation and force majeure — have been the most commonly debated, disputed and adjudicated. And while they remain perennial sources of friction between hotels and their association clients, only force majeure, in a new and unprecedented way, has maintained its conversational dominance. Meanwhile, two new legal concerns — the impact of heated political disputes on destination selection, and the legal ramifications of measures intended to protect the safety of attendees — have risen to prominence.
Over the last several years, and particularly since the inauguration of Donald Trump as president, political controversies have inserted themselves into the meeting destination selection process to an unprecedented extent, legal experts say.
“The political climate in the country has become more and more divisive in the last year,” says Phoenix-based Lisa M. Sommer Devlin, a well-known and highly respected attorney who specializes in hospitality law. “Although politics is not a new issue in the meeting industry, it’s really starting to come to a head now. So associations are becoming more concerned about politics at the state level, and they now have political concerns about meeting destinations such as Arizona, Indiana, North Carolina and Texas because of their immigration, or LGBT discrimination or transgender bathroom laws. They also have concerns about other states that may or may not be doing things that associations have political problems with. So more and more associations are concerned that their attendees may not want to go to places where there are political positions they disagree with.”
In fact, she says, some association bylaws now formalize concerns about specific political issues that challenge or violate their views.
Devlin has had direct interactions with associations that have removed entire states such as Arizona from consideration as a destination because of their objections to the state’s controversial immigration policies. And Arizona is not alone. “The associations,” Devlin says, “say ‘we cannot come to your state because we have decided your state discriminates’ against whatever group it is they are concerned about.”
As a result, in booking meetings years into the future, Devlin explains, associations are now trying to protect themselves legally from a political controversy that they believe could make it unpopular or impractical for them to honor a contract signed today. Consequently, they are attempting to insert clauses into their contracts that shield them from future political developments they deem controversial or unpopular with their members.
“There have been some suggested types of clauses along those lines that have been noted by industry organizations,” Devlin says. “But they have a lot of (negative) issues from the hotel’s perspective. So the hotels are pushing back against them.”
For example, she says, “I have counseled hotel clients in instances where an association has requested a clause that says that if after the date the meeting contract is signed, if a state or local government passes a law or policy that the association believes discriminates against a class of people, such as transgender people, or by religion or race, the association wants the right to cancel without payment. And of course, hotels are very reluctant to accept any of those contract clauses.”
John Foster, Esq., CHME, an Atlanta-based attorney who has represented association clients for more than two decades, has had clients raise such an issue. “But I’d say that only about 10 percent of my clients have expressed any concerns like that,” he says. “So I’d call it a minor issue. I do hear it talked about a lot within the industry, but in my experience it’s not that big of a deal.”
Tyra Hilliard, Esq., CMP, another highly respected veteran attorney who represents associations from her offices in St. Simons Island, Georgia, says the complication of meeting contract negotiations based on political positions is a new and still unclarified issue of law. “But I have been able to get clauses into contracts that say that the group can cancel without liability if one of these issues come up,” says Hilliard, who also teaches at College of Coastal Georgia. “But it needs to be specific. For example, if the La Raza organization that represents Hispanics objected to the passage of an objectionable provision related to immigration, that’s specific. That’s a much stronger case than the Chocolate Lovers Association saying ‘oh, there’s this immigration law we don’t like, and we don’t want to meet there.’ ”
She also points out that associations and meeting planners should understand and respect the fact that “it’s not the hotel’s fault that a state or local government passed a law that you find objectionable. And if meeting planners say I’m not bringing a meeting to your hotel because of this issue, then I do think we’re hurting our hotel partners.”
Foster believes that in an era of political correctness, “organizations are becoming a little too sensitive for their own good. You can hold a meeting in one of these places without saying your group supports whatever their law says. So in that sense, this controversy can get out of hand. And I also see that sometimes organizations get involved in these issues without really understanding what the issue really is. For example, the North Carolina transgender bathroom law, which has since been repealed, only applied to state government buildings. It had nothing to do with transgender meeting attendees not being able to use the bathroom of their choice.”
Devlin concurs that associations can sometimes misinterpret or misunderstand the actual implications of the laws they profess to oppose. However, Hilliard thinks the controversies and disputes will get worse before they get better.
“Under the Trump administration, we’re seeing things that are more extreme than they used to be,” she says. “So I am worried that under this administration, we’re going to see more of these controversies. But it’s not unique to this administration, either. We’re always going to see these issues to some extent.”
As a result of that reality, Foster counsels his association clients to keep their meetings separate from their politics. “In the long run,” he says, “it just doesn’t make much sense to mix the two.”
In the wake of last year’s shooting at Mandalay Bay in Las Vegas and ever-increasing fears about terrorism, the enhanced safety of meeting attendees and the legal implications related to it are also becoming a topic of inquiry and review.
“Safety is one of the biggest legal issues we’re seeing right now,” Hilliard says. “And increasingly, the issue is a hotel’s liability in the case of a shooting or bombing.”
The impetus is clearly on hotels to maintain high standards of security and procedures, she says. “But on the other hand, do we want to get to the point where we have to go through metal detectors to enter a hotel? And how do you answer that question after an event like the Las Vegas shooting?”
And, she says, she does not believe that even the Las Vegas shooting will have any real impact on hotel security procedures. Like all shootings, it will fade away and the status quo will prevail.
“I just don’t think that in the name of greater safety,” she says, “we are prepared to accept the kind of police state measures you routinely see at hotels elsewhere in the world.”
Devlin agrees that safety is becoming a more hotly discussed legal issue as a result of the Las Vegas shooting. “For example,” she says, “some hotels are changing their policies when it comes to issues like ‘Do Not Disturb’ signs, meaning they can enter your room any time they choose to. And a lot of meeting planners are raising questions about whether the hotels really have the right to do that.” Among the core rationales for the right is protecting against legal liability in the face of inaction, Devlin says. “For example, the guest could be ill or incapacitated and the hotel needs to go in to make sure they are all right.”
Furthermore, she says, “it has always been the hotel’s right to enter your room if they believe there is something going on in there that poses a risk either to other guests or the property itself. It’s just that in light of things like the Las Vegas shooting, meeting planners are becoming more aware of that issue because hotels are making their policies more clear.”
In general, there is also a broader concern today among associations about the safety of meeting attendees. “And that’s a good thing,” Devlin says. “But I also see instances now where the association wants to get actively involved in the safety and security issues. In that case, if they take on that responsibility and do it wrong, they could face liability if there’s a problem. If they leave it to the hotel, they do not face that kind of liability.”
For example, she says, more associations now want to insert liquor responsibility clauses into contracts. “That should be up to the hotel and not the association,” she says. “The association should not be getting involved in that. That’s the hotel’s job.”
Foster says, “According to most state laws, if you are a seller or server of alcohol, like a hotel or restaurant, you have two duties. One is to not serve someone under age. The other is to not serve someone who is noticeably intoxicated. And most companies train their bartenders how to recognize that. So there is case law and tort law based on that. But I also want my association clients to have contractual provisions that are related to that responsibility. So I put in my contracts that the hotel will follow the law and not serve any attendees that are either under age or noticeably intoxicated. And I want that in the contract to show that my association client raised the issue and will hold the hotel responsible.”
He also agrees with Devlin’s assertion that “meeting planners should not try to tell the hotel how to do its job when it comes to safety. And the issue should be clarified with language in the contract that indemnifies the association by agreeing to cover any liability or legal fees that could arise.”
The overarching issue for associations, when it comes to safety, Foster says, is to meet a four-part standard that is now widely supported by existing case law.
“With regard to attendee safety, meeting planners have four key legal responsibilities,” Foster says. “The first is to investigate all aspects of the event and to take appropriate action if they see any risks or danger. The second is that they must warn their attendees of any known risks or hazards. For example, if you know there is a high-crime area of your meeting destination, you have a duty to warn your attendees. The third is to plan for the safety and well-being of every attendee. For example, you must have adequate security in place. And number four is to take precautions not to expose your attendees to unreasonable risk of harm.”
The well-established legal standard, if litigation against the association ensues, he says, “is whether you met the generally established industry standard for attendee safety. In other words, did you do what a professional meeting planner at a typical association would have done?”
The third legal issue that has become a topic of spirited controversy, based on new arguments from associations, is force majeure.
“Force majeure is now becoming more of an issue because some associations and planners are worried about the impact of things like climate change,” Devlin says. “By that, I mean things like wildfires in California and more serious storms in certain places. The question becomes at what point is an association excused from a meeting contract because of one of these potential threats? And that is an unresolved issue. It’s new.”
As a practical matter, Devlin says, the hotly debated question now is “at what point can a group go to the hotel and say we are not coming to the meeting next week because of the wildfires that are five miles away or 10 miles away? That’s an open question right now, and there is no good answer. But meeting planners are now looking at those issues and asking how these things might affect them in the future. They’re asking if they should be doing something differently in terms of force majeure.”
The key issue, Devlin says, is reality versus perception. If a hurricane destroys your hotel before a scheduled meeting, there is no disputing the fact that force majeure applies. But a claim that a wildfire that is currently 10 miles away might, or could, impact the hotel is a subjective, or speculative, claim that might or might not prove to have any merit.
“There is no such thing as the potential threat of a force majeure,” Devlin says. “Either there is one or there isn’t. Either the hotel is open for business on your dates or it’s not. That’s what planners need to understand. But what we’re seeing now is that more associations and more planners are trying to redraw those lines and say we’re not coming to the meeting if this or that happens. And we don’t have to pay.”
In what she cited as a good example, an association group from Texas wanted to cancel a meeting in Chicago scheduled to take place days after Hurricane Harvey devastated the Houston area last August. “The hotel said ‘the hurricane was in Texas, not Chicago, so that is not a force majeure issue.’ I see that as an example of how there are some associations and planners who want to misuse force majeure in a way that has nothing to do with what’s going on in the meeting destination.”
In Foster’s view, such a claim is entirely legitimate.”I have dealt with that sort of thing in the past,” he says. “And my force majeure clause says that if anything happens, in any location from where attendees are traveling, and more than 30-40 percent of attendees are affected, then the meeting can be cancelled under force majeure. And I’ve been putting that in contracts for 20 years.”
Hilliard leans toward Foster’s argument. “Hotels like to say that if something happens to the hotel or the destination, then force majeure applies,” she says. “But the Texas hurricane is a perfect example of another kind of situation. If 40 or 50 percent of your attendees are living in Houston and they’ve been through what they’ve been through, how many of them are going to want to go to a convention?”
Foster cites yet another example that he says is very plausible and not unprecedented. “Let’s say an association has a meeting scheduled in Miami,” he says. “And on the meeting dates, it’s warm in Miami and the weather is beautiful, but a big snowstorm has closed down some of the major airports attendees would be flying out of for the last two or three days, so 20 or 30 percent of attendees can’t get to the meeting. That’s a legitimate force majeure claim that has nothing to do with the destination or the hotel.”
Foster believes that in such a situation, the contract’s attrition clause and force majeure clause overlap, and that the hotel must take a broad view of the practical reality the association faces. In such an instance, he says, the force majeure provision should override the attrition clause, which means that both the association and the hotel win in the sense that the meeting can still take place, but with reduced attendance — that goes unpenalized because the attrition clause has been waived under extraordinary circumstances.
Far trickier, the three lawyers agree, is the notion that an association can cancel a meeting because of concerns about a wildfire that is burning five or 10 miles from the hotel, but it not currently moving toward the hotel that will host the meeting in a few days.
“That example gets more tough, because if the hotel says we’re open and operating, the planner can say, yeah, but what if the wind shifts?” Hilliard says. “These fires move quickly and 10 miles is not much distance. On other hand, what I tell my clients is that fear is not a force majeure issue. If the fires are not right now preventing you from holding your meeting, my opinion is you pretty much have to go through with it.” AC&F