- Email: [email protected]
Environmental tobacco smoke and employees
Environmental Tobacco Smoke and EmployeesHospitality-Industry Operators Face Legal Liability by Katherine A. Young
pp.36-42
Restaurant Espionage: When Recipes Are Not Trade Secrets by Patricia Diax and Dewey RutherJbrd
pp.43-50
The Hong Kong Tourism Industry in Transition: Challenges and Opportunities by Vincent
C.S. Heung
rpp.51-59
Recent researchand scientific developments have strengthened the link between environmental tobacco smoke (ETS)and health-related illnesses. As such, employers who allow smoking on their premises will likelyface an increased risk of lawsuits and workers’ compensation claims directed against them. Unlike in the past, when plaintiffs rarely prevailed by claiming that health problems were related to tobacco use or smoke, juries and judges recently have decided in favor of nonsmoking plaintiffs. While workers’ compensation insurance may provide employeeswith the most expeditious way to link workplace ETSwith a health problem, the limited remedies of workers’ camp may substantially reduce an employee’s settlement relativeto the recoveryavailablethrough the courts. One strategy for restaurateurs concerned about potential ETS-basedliability is to support wide-area smoking ordinances. Restaurateursoperating under self- or government-imposed smoking bans are less likelyto face ETS lawsuitsthan those who have no policy regarding smoking.
In a case that surprised restaurant operators, a federal district court dismissed a lawsuit in which Old Country Buffet sought damages from Granny’sBuffet for stealing trade secrets. Seeing OCB’ssuccess,the Spokane-basedcouple who eventuallyopened Granny’spaid a secretary to transcribe photocopies of OCB’srecipes,which OCB’sfounders had developed and tested, and the couple arranged a placement for their son at OCBto learn the restaurant’s unique management procedures,which similarly had been developed by OCB’sfounders. The court, however, ruled that individual recipesas lists of ingredients may not be copyrighted (although federal law allows copyrighting books of recipeswith associated commentary). Moreover, the court held that OCBhad not taken sufficient steps to protect its management books. A restaurateur not wishing to suffer OCB’sfate must either find a court that understands the restaurant business or take steps to protect recipes by binding them into books, placing a copyright statement on each recipe, and registering the copyright for the book; issuing written materials only on a “need to know” basis; and requiring employeesto sign a confidentiality agreement. While there is no guarantee that these steps will protect a restaurant’strade secrets,taking these steps at least establishesthat the restaurateur attempted to build a wall of confidentiality around its recipesand operations methods.
IN
t hef t t t
executive summaries of this issue’s feature articles
Hong Kong’s tourism industry faces unprecedented political uncertainty with the upcoming change of sovereignty in July 1997. While the changes present challengesto investors and industry professionals, opportunities also exist. Most of the challengesare unrelated to the change in political administration, including competition from other destinations and Hong Kong’scrowded real-estate market. Farfrom being a negativefactor, the closer relationship with the mainland Chinesegovernment should augment Hong Kong’s position as both a destination in its own right and as a gateway for travelers entering and leavingthe People’sRepublic.
February1997
l
5
Envlr0 enta1 Tobacco Smoke and
Employees H0spitality-IndustryOperators Business owners and operators who allow smoking on
May Face LegalLiability
the premises may face legal liability for injuries to employees and patrons caused by secondhand smoke.
by Katherine A. Young
H o s p i t a l i t y - i n d u s t r y operators should be aware that "passive smoking" is an emerging area of litigation. Bystanders who do not smoke but who have been exposed to "environmental tobacco smoke" (ETS) created by others have begun to sue tobacco companies on the grounds of health-related damages. The next logical step may well be for those exposed to ETS to direct litigation at business owners who allow smokKatherine A. Young, J.D., an assistant professor of hotel and restaurant administration at the University of Tennessee (Knoxville), is licensed in California and Tennessee, with a private practice in Knoxville. © 1997,CornellUniversity
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H U M A N
R E S O U R C E S :
ing on their business premises. This article addresses possible causes of action for employees, although it should be recognized that both patrons and employees are possible plaintiffs in such cases. The harmful effects of ETS are well-documented, although the extent of illness and injury directly attributable to ETS is under debate. As the causal links among ETS, injury, and illness become more established by the scientific and medical communities, the number of lawsuits will undoubtedly rise. As one commentator noted, "the tort system is an unusually sensitive barometer to health and safetyrelated events, m This article discusses the health findings regarding ETS and the current status of the ETS controversy relative to the hospitality industry, reviews litigation against the tobacco industry, analyzes potential employee-as-plaintifflegal theories, and concludes with suggestions for the hospitality industry.
The ETS Controversy Environmental tobacco smoke, also called secondhand smoke, has been the object of study and a source of
contention for a quarter of a century. 2 ETS is composed of the particulates and gases that smokers exhale as well as the smoke that is directly emitted by a burning cigarette. 3 One report traces the immediate controversy over secondhand smoke "...to 1971, when the U.S. Surgeon General first raised the possibility of health risks from the smoke that comes off the burning end of the cigarette.''4 In 1984 a physicist at the U.S. Environmental Protection Agency (EPA) independently developed a risk assessment that estimated that secondhand smoke was causing lung cancer in nonsmokers. That initial research indirectly led to the 1986 surgeon general's report linking passive smoking to lung cancer. 5 A broad epidemiological review conducted by the American Heart Association in 1992 concluded that as many as 45,000 nonsmokers per year suffer from heart disease or lung cancer caused by environmental tobacco smoke. 6 In late 1994 a study showed that nonsmoking adults exposed to ETS run a 40percent increase in asthma risk] In addition, secondhand smoke has been linked to health risks for lung,
1Robert L. Rabin, "A Sociolegai History of the Tobacco Tort Litigation," Stanford Law Review,, Vol. 44 (April 1992), p. 853. 2See: "The Health Consequences of Smoking--A Report of the Surgeon General," U.S. Department of Heakh, Education, and Welfare, 1972;"The Health Consequences of Involuntary Smoking-A Report of the Surgeon General," U.S. Department of Health and Human Services, 1986; "Environmental Tobacco Smoke: Measuring Exposures and Assessing Health Effects," National Research Council, Board on Environmental Studies and Toxicology, Committee on Passive Smoking, 1986;"Fast Food, Growing Children, and Passive Smoke: A Dangerous Menu," issued by a group of state attorneys general, Fall 1993; S. Katharine Hammond, Glorian Sorensen, RichardYoungstrom, and Judith K. Ockene,"Occupational Exposure to Environmental Tobacco Smoke," 274 JAMA 956 (1995); andJ.L. Pirkle et aI., "Exposure of the U.S. Population to Environmental Tobacco Smoke," 275 JAMA 1233 (April 24, 1996). 3Shannon Brownlee,"The Smoke Next Door," U.& News & World Report, June 20, 1994, p. 66. Brownlee writes: "An EPA analysis of secondhand smoke shows it contains 4,000 compounds, including 43 known carcinogens and other hazardous substances, such as ammonia." 4Alix M. Freedman,"Grand Jury Probes Secondhand-Smoke Studies," Wail StreetJournaI, Marketplace, February 15, 1996, p. B1. 5Margaret Kriz,"Where There's Smoke...," Tl~leNational Journal, May 7, 1994, p. 1056. The findings of EPA physicist Jim ReFace led to a National Research Council study, which in turn was the basis for the 1986 U.S. Surgeon General's report. C'Freedman, p. B3. 7"Passive Smoking Linked to Higher Risk of Asthma," Knoxville News-Sentinel, November 21, 1994, citing a study reported in the November 1994 American Journal of Respiratory and Critical Care MedMne by scientists at the universities of Lausanne and Basel in Switzerland, the EPA, and the Harvard School of Public Health.
.....
£
urinary-system, colon, kidney, pancreatic, and ovarian cancer. Additionally, heart and artery disease and respiratory ailments have been found to be caused by ETS. The list of ailments linked to ETS is not yet complete, as researchers find out more about ETS each year. 8 In 1993 the EPA announced that ETS is a Class A carcinogen, along with asbestos, arsenic, and radon. 9 The EPA's classification was "the result of the EPA's examination of existing epidemiological studies on women exposed to their husband's tobacco smoke and on children exposed to a parent's smoke.''1° The first draft of that widely criticized EPA study was released in June 1990, but final publication was delayed for three more years. 11 In 1994 tobacco companies Philip Morris and R J . Reynolds sued the EPA over the 1993 report and the Class A designation of ETS. 12 Moreover, officials at the Tobacco Institute, an industrysponsored research institute, do not believe the EPA study is relevant to hospitality-industry workplaces. "You cannot take data from a domestic setting and say this applies to a fast-food restaurant," said a spokesman. 13 Nevertheless, although various health organizations and tobacco companies continue to fight over the methods used by the EPA to reach the determination that ETS is a Class A carcinogen, the classification stands. 8Philip J. Hilts, "Secondhand Smoke: The Real Risk forYou andYour Family," Good Housekeeping, November i996, p. 171. 9"Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders," U.S. Environmental Protection Agency, 1993. I°Brownlee, p. 66. UJacob Sullum,"Just How Bad Is Secondhand Smoke?," The National Revieu4 May 16, 1994, p. 51. ~2"Tobacco Suit," Atlanta Journal a1~dConstitution,July 22, 1994, p. 8A. 13Laura M. Litvan,"A Smoke-Free Workplace? Proposed Federal Regulations," Nation's Business, May, 1994, p. 65, where she quotes Thomas Lauria, a Tobacco Institute spokesman.
February 1997 • 37'
Data from domestic settings may actually underestimate the amount of ETS exposure for individuals oke ace, ;e
the :ts of tings ;ic ~ed re to imes .an
~ker, bar :h Che ~s-
)rfor ag cals in secondhand smoke (N-nitro sodimethylamine, or NDMA) has led to the estimate that two hours spent in a smoky bar exposes a person to the equivalent amount of N D M A as the exposure one would get from smoking four cigarettes. This same research indicates that the inhalation of ETS by patrons for two hours in "typical nonsmoking section(s)" of restaurants gives an NDMA-exposure equivalent to smoking one and one-half cigarettes.IS A n e w test. By 1995 scientists at the U.S. Centers for Disease Control and Prevention (CDC) had 14Michael Siegel,"Involuntary Smoking in the Restaurant Workplace," Journal of the American Medical Association, Vol. 270, No. 4 (July 28, 1993), p. 490. aSHilts, p. 169. Cited are the test conclusions of S. Katharine Hammond, Ph.D., University of California at Berkeley, School of Public Health, who measured smoke levels in various locations to determine the presence of N-nitro sodimethylamine (NDMA), a chemical found in cigarette smoke.
38
I~tNILI HOTELAND RESTAURANTADMINISTRATIONQUARTERLY
developed a fast, precise method of testing human exposure to ETS through blood samples. The availability of such a test is expected to produce data that can be used to calculate cancer risks associated with exposure and the general relationship between passive smoke exposure and health) 6 The availability of these data will likely lower hurdles that have traditionally prevented widespread ETS litigation. To date, plaintif£ have found it difficult, if not impossible, to prove exposure levels and, therefore, causation. In relation to ETS-liability for employee exposure, the most significant health study to date found that the effects of ETS exposure linger, and that nicotine by-products are traceable in blood up to three days after an exposure limited to just one or two hours. Iv F i n d i n g links. In April 1996 the
.Journal of the American Medical Assoclarion published new findings from the CDC that indicated that exposure to workplace tobacco smoke might be a much bigger danger to health than workers had been led to believe. TM The CDC findings, encompassing the most extensive data ever compiled on bystanders' exposure to cigarette smoke in U.S. workplaces, involved physical examinations performed on more than 12,000 individuals. The exams revealed that 87.9 percent of the tested individuals had cotinine, a nicotine residue, in their blood serum. A journalist examining this study speculated that the findings "will likely add ballast to antismoking groups' efforts at the federal, state, and local levels to ban 16Karen H s u , " C D C Refines Way to Gauge Passive Smoke," Wall StreetJournal, August 23, 1995, p. 95. 17Hsu, p. 95. lSTimothy Noah,"Exposure to Workplace Tobacco Smoke Is Greater Than Believed, Study Says," Wall StreetJournal, April 24,1996.
H U M A N
smoking in office buildings and other public places.''t9 Another recent scientific finding in relation to ETS hazards may be important for both smokers and bystanders. In a study published in October 1996, researchers concluded that benzo[a]pyrene, a component in cigarette smoke, causes damage to a gene that suppresses tumors. "This study provides a direct link between a defined cigarettesmoke carcinogen and human cancer mutations. ''2° Concern for employee health has prompted the U.S. Occupational Safety and Health Administration (OSHA) to propose measures that "... could affect all places of employment, including office buildings, bars, and restaurants. The OSHA rules would require employers to run HVAC systems for all work shifts and implement indoor-airquality compliance plans. ''2. OSHA officials postponed implementation of the proposals, however, following a tremendous volume of public comment. "It's not a dead issue, but it's definitely on a slower track because of the volume of interest," said an O S H A spokeswoman in late 1995. 22 Displeasure over potential and actual smoking bans has been registered by such hospitality trade groups as the National Licensed Beverage Association 23 and the National Restaurant Association (NRA). The N R A is against gov19Noah, op. eit. 2°Mikhail F. Denissenko, Annie Pao, MoonShong Tang, and Gerd P. Pfeifer, "Preferential Formation ofBenzo[a]pyrene Adducts at Lung Cancer Mutational Hotspots ii1 P53," Science, October 18, 1996, pp. 317,430. 21Lois Weiss,"Smoking Bills on Agenda," Real Estate Weekly, June 1, 1994, p. i, quoting Nicholas M. Charchiaro, Sr., branch manager for AFA Protective Systems regarding OSHA rule 29 C F R 1910.1033. 22Associated Press,"Casinos Buck OSHA NoSmoking Proposal," Knoxville News-Sentinel, December 9, 1995, p. C8. 23"NLBA Warns of 'Nationwide Catastrophe,'" [email protected], February 9, 1996.
ernment regulation of smoking in the workplace and is funding research on the economic impact of the proposed OSHA regulations. "We believe in market forces and that employers are better-suited than the government regulators to develop policies in individual restaurants," said an N R A spokeswoman.
24
A press release issued by the N1KA in November 1995 stated that the assumptions regarding secondhand smoke were not holding up under public scrutiny, as Even after the release of the EPA findings, the American Heart Association study, and the availability of the new cotinine blood-testing technology, the N1KA endorsed a "market-forces approach" in response to the proposed O S H A indoor-air-quality standards. The N R A contention is that the market will force restaurants to ban smoking if customers and employees demand an environment free of ETS. P o o r p u b l i c awareness. If the "market forces" proponents are successful in preventing passage of legislated workplace smoking bans, however, it is unlikely that customers and employees will demand an ETS-free environment, because the public perception of the dangers of ETS appears to be low."Scientists consistently rank indoor-air pollution at or near the top of environmental health risks in the United States. Public opinion polls, however, continue to find most Americans do not perceive the risk of indoor-air pollution to be great. ''26 At least one state industry association, the California Restaurant 24Litvan, p. 65, quoting Wendy Webster, spokeswoman for the NRA. 2SNational Restaurant Association,"Assumptions on Second-Hand Smoke Not Holding Up Under Scientific Scrutiny," press release, November 14, 1995. 26Ken Sexton,"An Inside Look at Air Pollution; Complicated Public Policy Issues at Stake," EPAJournal, October, 1993, p. 9.
R E S O U R C E S
Association (CRA) has stepped forward in favor of a ban on smoking in restaurants arid bars. The C R A recently cosponsored a California bill prohibiting smoking in workplaces, with a time-limited exemption for bars. C R A president 1Konald Higgins noted that "the CRA'S board of directors recognized which way the smoke was blowing in 1990 .... We need to recognize that the public is growing increasingly intolerant of health risks. ''e7 Some businesses banned smoking, notably McDonald's and Dunkin' Donuts. Moreover, the Council of Chain Restaurants has endorsed federal legislation to prohibit smoking in all public places. 28 Dunkin' Donuts and McDonald's, however, are the only national restaurant chains to date that prohibit smoking in their franchise outlets. 29
Tobacco-Related Litigation More than 40 years have passed since the first health-related lawsuit was filed against a cigarette manufacturer. 3° Roughly 800 complaints have been filed against tobacco manufacturers during that 40-year span, yet only 20 cases have gone to triaP *and no tobacco companies have yet paid any money to smokers who claimed that they were injured by the use of cigarettes. 32 The tobacco industry is reexamining its strategy regarding such litigation. In early 1996 the Liggett Group became the first tobacco 27Alan Liddle, "Food Service Leaders Rally for Unity at Western Show," Nation's Restaurant News, September 5, 1994, p. 1. 28A]ice Horrigan, "The Smoking Gun: Passive Smoke Hazards," E, October, 1994, p. 28. 2~Hilts, p. 173. Outlets in Oklahoma are an exception, as state law there mandates that restaurants allow smoking. 3°Mark Curriden,"The Heat Is On," ABA Journal, September 1994, p. 58. 31Jolie Solomon and Peter Katel,"When There's Smoke, There's Fire," Newsweek, October 28, 1996, p. 52. 32Rabin, p. 857.
February 1997 • 39
company to agree to settle some of the suits it faced. Other tobacco companies, including R J . Reynolds, have indicated that out-of-court settlement may be the best way for the tobacco companies to resolve health-related lawsuits .33 "Plaintiffs' lawyers pointed out that the [Liggett] settlement has great symbolic value.Just getting a tobacco company to agree to pay plaintiffs anything is a watershed development in the 40-year history of tobacco litigation. ''34 If the tobacco companies change their approach, hotel and restaurant operators may find themselves facing health-related litigation. So far, hospitality-industry operators have relied on the tobacco industry's historical immunity from liability as justification for a stance against workplace smoking bans. Offense and defense. Plaintiffs began to try to recover from tobacco companies in the 1950s on theories of misrepresentation, fraud, negligence, and breach of warranty. The tobacco companies raised numerous defenses, including assumption of risk and contributory negligence. Moreover, the tobacco companies have long used a proven strategy for success in such suits, namely fighting relentlessly against claimants. They have defended cases, regardless of cost, through multiple trials and appellate actions. In the process, they have exhausted the financial and emotional resources of the claimants, often before trial. 3s The first smoking plaintiff to prevail in a suit against the tobacco manufacturers won on August 9, 33Suein L. Hwang, " R J R Chief Says He Would Consider a 'Resolution' to Cigarette Controversy," Wall Street Journal, March 25, 1996, p. B3. 34Milo Geyelin, "Liggett, Five States Set Pact Covering Treatment of Smoking-Related Illnesses," Wall StreetJournal, March 18,1996, p. A3. 3SRabin, p. 857.
4o
1996. 36 If this case is upheld on appeal, it will mark the first time that a tobacco company was forced to pay money to a plaintiff because of an injury caused by smoking. N o n s m o k e r s sue. A class-action suit against tobacco companies by 60,000 nonsmoking airline flight attendants who were exposed to ETS in the workplace was certified by a Florida state judge in midDecember 19943v and is expected to go to trial in the spring of 1997. 38 The tobacco companies won an initial victory by having the class action dismissed, but the Third District Court of Appeals for Florida reversed the dismissal and denied a rehearing. The Florida Supreme Court denied review of the case, meaning that it will go forward. 39
Legal Theories Available to ETS Employee-Plaintiffs Employers who knowingly expose their employees to hazardous or toxic substances are subject to workers' compensation claims and, possibly, tort actions. Should research strengthen the link between ETS and health problems, employers who allow smoking on the premises may face claims of injury. Nevertheless, in keeping with the public's low perception of ETS hazards, restaurateurs do not appear to be concerned about the potential legal liability for employees' exposure to ETS. A 1996 study that surveyed restaurant owners found that less than 38 percent of respondents agreed that restaurant 3~'Carter v. Brown & Williamson Tobacco Corp., 95-00934 (Cir. Ct., Duval Co., Fla.). 37jnnda Woo,"Cigarette Suit Approval," Wall Streetdournal, December 13, 1994, p. B l l . 3SPhilip J. Hilts,"A Personal War Against Tobacco," Good Housekeeping, November 1996, p. 173. 39See: Broin et al. v. Philip Morris Companies Inc. et al., 641 So.2d 888 (3d D C A 1994); Phih~p Morris Incorporated ~z Norma R. Broin, 654 So.2d 919 (Fla.1995); and Philip Morris Inc., et al. v. Norma R. Broin, et al., 1996 WL 1146 (FLA. APE3 DIST.)(1996).
EURNELLHOTELANDRESTAURANTADMINISTRATIONQUARTERLY
owners have an obligation to protect employees from secondhand smoke, g0 Workers' c o m p e n s a t i o n . Workers' compensation law has been applied to several cases of ETS-related damages. A legal precedent was set in December 1995 when the first workers' compensation award for ETS-induced lung cancer was given, el In a case that surprised the tobacco industry, a federal hearing examiner in Cleveland, Ohio, awarded death benefits to the widower of a Veteran's Administration nurse who died of lung cancer after working in the psychiatric unit o f a V.A. hospital for 18 years. Co-workers testified at the hearing that there were times when the heads of patients could not be seen across the room because the smoke was so dense. In 1991 a plaintiff who worked on. an assembly line in a Ford Motor plant was found to have a disabling lung condition brought on by years of inhaling ETS and industrial air pollutants. 42 In 1994 and 1995 office workers exposed to ETS were found to have sustained an accidental injury arising out of and in the course of their employment through their exposure to ETS. 43 The mul4°David C. Bojanic,"The Smoking Debate: A Look at the Issues Surrounding Smoking Bans in Restaurants," Hospitality Research Journal, Vol. 20, No. I (1996), p. 27. It is not possible to determine whether the restaurateur-respondents made a distinction between being morally obligated and being legally obligated to protect employees from ETS. 4tSee: Milo Geyelin,"Widower Wins Death Benefits in Case Over Secondhand Smoke in Workplace," Wall StreetJournaI, December 13, 1995, p. B6; and"VA Is Ordered to Pay Workers' Comp for Death Blamed on Secondhand Smoke," Knoxville News-Sentinel, December 16, 1995, p. A8. 42Fasang p. Ford Motor Company, 4 M I W C L R P 3099 (1991). ~3dohannsen v. New York City Department of Housing Preservation and Development, 94 N Y W C L R P.2043, and Claimant ~z New York State Division of Substance Abuse, 95 N Y W C L R P 1149.
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tiple chemical sensitivities of one claimant were found to be causally related to her work environment and, therefore, constituted a disability. Although workers' compensation is a logical route for ETS-injury claims, not all employees will necessarily take that route because it has specific disadvantages. "The chief benefit of the workers' compensation system for the injured employee is that it provides a much speedier and more certain recovery than a suit at law.''44 Because workers' compensation is usually the exclusive remedy for the injured employee, however, the employee "gains a statutory no-fault remedy, but sacrifices the right to a potentially larger recovery in tort. ''45 Moreover, workers' compensation claims for environmental or toxic exposure illnesses historically have been limited by the short statute of limitations of most workers' compensation statutes. That shortcoming could change, however. For example, the NewYork State Assembly is considering removing that state's two-year statute of limitation for ETS claims. 46 Strategies that have been used successfully to get around those workers' compensation limitations are discussed below. D e t o u r 1. An injured employee may avoid workers' compensation and head straight to court if there is a chance of prevailing on any alternative legal theory because of the lower, statutorily determined amounts awarded through workers' compensation insurance. Moreover, one legal theory holds that ETS damages are inherently outside the coverage of workers' compensation. 44W. Page Keemn et al., Products Liability and Safety, 2nd Edition (Mineola, NY: The Foundation Press, Inc., 1989), p. 684. 45Ibid. 46Weiss, p. 1.
ETS plaintiffs have been creative in designing alternative causes of action, although to date the only claim that has met with success has been a claim of negligence. The various legal theories that have been used by employees injured in the workplace by ETS include the common-law duty to provide a safe work environment, 47 negligence. 4s infliction of negligent or intentional emotional distress, 49 violation of disability statutes, s° a claim of the constitutional right to a smoke-free workplace, 51 and an implied breach of contract action for a smoke-flee workplace. 52 The reasoning of the court in the negligence case, McCarthy v. Department of Social & Health Services. is particularly illuminating because it differentiates ETS-exposure complaints from those that are specifically occupational in nature (e.g., exposure to asbestos). The McCarthy court held that:
R E S O U R C E S
Should research strengthen the link between ETS and health problems, employers who allow smoking on the
premisesmay face claims of
injury.
[IJf the employee could prove that her employer had negligently exposed her to tobacco smoke in the workplace and that the disease she contracted because of such negligence was not peculiar to, or inherent in, her occupation, and thus not within the exclusive coverage of the workers' compensation act, then she had a common-law action for negligence. 53
In 1992 the Nevada Supreme Court specified that ETS is not inherently a part of the casino's 47Gordon v. Raven Systems & Research, Inc. (1983, Dist Col App) 462 A2d 10. 48McCarthy v. Department of Social & Health Services (1986) 46 Wash App 125,730 P2d 681, 1 BNA IER Cas 1233, 106 CCH LC P 55750, review gr 108 Wash 2d 1001. 49Bernad v. Cameron & Colby Co. (1986) 397 Mass 320, 491 NE2d 604, 2 BNA IElZ Cas 678, 104 CCH LC P 55584, 63 ALR4th 1015. ~oViekers v. Veterans Administration (1982, WD Wash) 549 ESupp. 85, 29 BNA FEP Cas 1197, 30 CCH EPD P 33099. SlKensell v. Oklahoma (1983, CA10 Okla) 716 F2d /350. 52Bernard, 397 Mass at 320, supra. S3McCarthy, 46 Wash App at 125, supra.
February1997 • 41
business and found that a casino employee was therefore not eligible for workers' compensation under a state Occupational Disease Act: [I]t is apparent to us that despite its common presence in bars and casinos, environmental tobacco smoke is not incidental to the character of these businesses, is not a natural incident of these businesses. 54
D e t o u r 2. Another detour around the limitations of workers' compensation is to prove that the employer committed an intentional tort. However, this exception to the workers' compensation statutes has usually been construed very narrowly and the employer has had to cross the line into fraudulent concealment of the risks involvedJs ETS-related injuries or illnesses may not be subject to this type of claim because knowledge of the hazards of ETS are generally available to the general public, even if those hazards are not widely accepted. D e t o u r 3. Yet a third way to circumvent workers' compensation may be found in the "dual capacity" doctrine. When the employer has a dual capacity, both as an employer and as a tortfeasor, the employee may pursue a private cause of action, skirting workers' compensation. If a business owner is a heaW smoker, for example, subjecting the employee to daily doses of ETS, the employer could perhaps be found to have dual capacity as a tortfeasor.
Further, if the employer actively fought to avoid a smoking ban for fear of lost profits, he or she could be seen as deliberately exposing employees to a known Class A carcinogen, potentially allowing a toxic tort action. 56 D e t o u r 4. Employees can also sue under the American with Disabilities Act if they have requested accommodation for a disability caused or exacerbated by ETS and have been denied that accommodation. 57 The provision of a smokefree workplace can be found to be a reasonable accommodation for an employer to make. So many businesses have imposed a workplace smoking ban, including hundreds of hospitality-industry businesses, that it would be hard to claim that a ban was unreasonable.
Employers' Options The prospect of an employee lawsuit against an individual restaurant or bar owner is an expensive one. While the employer would have to find financial or legal resources to fight such a lawsuit, an employee is able to retain a law firm on a contingency basis. Even if industry associations were to raise the funds to support test cases, the cost of potential class-action suits could be prohibitive. Perhaps the only resource available to the small business owner faced with this type of suit would be financial support from tobacco com-
S4palmer v. Del l/Vebb'sHigh Sierra, 108 NEW 673,838 R2D 435 (1992). SSMillison v. E.I. du Pont de Nemours & Co., 101 NJ. 161,501 A.2d 505 (1985) anddohns-Mansville Product Corp. v. Superior Court of Contra Costa County (Reba Rudkin, real party in interesO, 27 Cal. 3d 465, 612 R2d 948, 165 Cal. Rptr. 858 (1980). Sqn the past, some casinos supplied free cigarettes to all customers. Later, free cigarettes were supplied only to favored customers. This dual capacity (employer and retailer) could enhance the plaintiff's right to recovery. The plaintiffin Palme~ 838 R2D at 437, an employee of a casino, sued because he was constantly exposed to ETS in the workplace (he was a dealer). The Palmer case empha-. sized that this particular casino encouraged smoking by giving away free cigarettes, and that the casino was a retailer for economic gain because the cigarettes enhanced the customers' value perception. STInHomeyer lz Stanley Tulchin Associates, Inc., the Seventh Circuit Court of Appeals recently reversed and remanded a dismissal of an Americans with Disabilities Act (ADA) claim. The court did so because the lower court had improperly held that there was no set of facts that the plaintiff could plead that would make her chronic severe allergic rhiuitis and sinusitis a "disability" within the meaning of the act (1996 WL 428030 [7th Cir.(Ill.)]). Earlier, a federal district court in the Seventh Circuit had refused to dismiss a similar case, stating that a plaintiff with ETS-triggered asthma could go forward with an ADA claim against his employer. The Court held that a substantial limitation on the ability to breathe is a disability within the meaning of the ADA. Bell v. Elmhurst Chicago Stone Comparly, 919 E Supp 308, N.D. Ill. (1996).
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HOTELAND RESTAURANTADMINISTRATIONQUARTERLY
panies, s* But unless tobacco companies are willing to foot the entire litigation bill, which is unlikely, hospitality-business owners should consider the potential detrimental impact of a large compensatory and punitive damage award to an employee or patron. Although government-imposed smoking bans are anathema to most restaurant associations, one strategy for restaurateurs concerned about potential ETS-based liability is to support wide-area smoking ordinances. Politics aside, a municipal smoking ordinance levels the field for restaurateurs who are concerned about ETS. Many smoking "bans," such as that in NewYork City, function as ordinances that specify the circumstances under which smoking is permitted, s9 Although opponents of smoking bans fret about leakage of business across municipal lines, restaurateurs operating under such ordinances are less likely to face ETS lawsuits than those who have no policy regarding smoking, whether mandated by government or selfimposed. Even if some business is lost--a point still in contention--a restaurateur must weigh the value of that business against the prospect of a far larger economic loss from an ETS judgment. The studies and case law reviewed here indicate that there are compelling reasons why hospitality-industry operators and owners might decide to ban smoking for purely economic reasons. There is also sufficient medical research and testimony that suggest there are humane and ethical reasons to consider such a ban as well. 6° CO SSDoug Levy,"Struggling to Clear the Air on Tobacco," U.S.A. Today, October 12, 1994,p. 1D. 59David L. Corsun, Cheri A.Young, and Cathy A. Enz,"Should NYC's Restaurateurs Lighten Up?," Cornell Hotel and Restaurant Administration Quarterly, Vol. 37, No, 2 (April 1996), p. 26. 6°Sandra G. Spodman,"Restaurant Employees' Risky Business: Research Links Waiters' Lung Problems to Secondhand Smoke," Washington Post, August 3, 1993, p. WH7; and Siegel, p. 490.
pp.36-42
Restaurant Espionage: When Recipes Are Not Trade Secrets by Patricia Diax and Dewey RutherJbrd
pp.43-50
The Hong Kong Tourism Industry in Transition: Challenges and Opportunities by Vincent
C.S. Heung
rpp.51-59
Recent researchand scientific developments have strengthened the link between environmental tobacco smoke (ETS)and health-related illnesses. As such, employers who allow smoking on their premises will likelyface an increased risk of lawsuits and workers’ compensation claims directed against them. Unlike in the past, when plaintiffs rarely prevailed by claiming that health problems were related to tobacco use or smoke, juries and judges recently have decided in favor of nonsmoking plaintiffs. While workers’ compensation insurance may provide employeeswith the most expeditious way to link workplace ETSwith a health problem, the limited remedies of workers’ camp may substantially reduce an employee’s settlement relativeto the recoveryavailablethrough the courts. One strategy for restaurateurs concerned about potential ETS-basedliability is to support wide-area smoking ordinances. Restaurateursoperating under self- or government-imposed smoking bans are less likelyto face ETS lawsuitsthan those who have no policy regarding smoking.
In a case that surprised restaurant operators, a federal district court dismissed a lawsuit in which Old Country Buffet sought damages from Granny’sBuffet for stealing trade secrets. Seeing OCB’ssuccess,the Spokane-basedcouple who eventuallyopened Granny’spaid a secretary to transcribe photocopies of OCB’srecipes,which OCB’sfounders had developed and tested, and the couple arranged a placement for their son at OCBto learn the restaurant’s unique management procedures,which similarly had been developed by OCB’sfounders. The court, however, ruled that individual recipesas lists of ingredients may not be copyrighted (although federal law allows copyrighting books of recipeswith associated commentary). Moreover, the court held that OCBhad not taken sufficient steps to protect its management books. A restaurateur not wishing to suffer OCB’sfate must either find a court that understands the restaurant business or take steps to protect recipes by binding them into books, placing a copyright statement on each recipe, and registering the copyright for the book; issuing written materials only on a “need to know” basis; and requiring employeesto sign a confidentiality agreement. While there is no guarantee that these steps will protect a restaurant’strade secrets,taking these steps at least establishesthat the restaurateur attempted to build a wall of confidentiality around its recipesand operations methods.
IN
t hef t t t
executive summaries of this issue’s feature articles
Hong Kong’s tourism industry faces unprecedented political uncertainty with the upcoming change of sovereignty in July 1997. While the changes present challengesto investors and industry professionals, opportunities also exist. Most of the challengesare unrelated to the change in political administration, including competition from other destinations and Hong Kong’scrowded real-estate market. Farfrom being a negativefactor, the closer relationship with the mainland Chinesegovernment should augment Hong Kong’s position as both a destination in its own right and as a gateway for travelers entering and leavingthe People’sRepublic.
February1997
l
5
Envlr0 enta1 Tobacco Smoke and
Employees H0spitality-IndustryOperators Business owners and operators who allow smoking on
May Face LegalLiability
the premises may face legal liability for injuries to employees and patrons caused by secondhand smoke.
by Katherine A. Young
H o s p i t a l i t y - i n d u s t r y operators should be aware that "passive smoking" is an emerging area of litigation. Bystanders who do not smoke but who have been exposed to "environmental tobacco smoke" (ETS) created by others have begun to sue tobacco companies on the grounds of health-related damages. The next logical step may well be for those exposed to ETS to direct litigation at business owners who allow smokKatherine A. Young, J.D., an assistant professor of hotel and restaurant administration at the University of Tennessee (Knoxville), is licensed in California and Tennessee, with a private practice in Knoxville. © 1997,CornellUniversity
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I ~ E L [ HOTELANDRESTAURANTADMINISTRATIONQUARTERLY
H U M A N
R E S O U R C E S :
ing on their business premises. This article addresses possible causes of action for employees, although it should be recognized that both patrons and employees are possible plaintiffs in such cases. The harmful effects of ETS are well-documented, although the extent of illness and injury directly attributable to ETS is under debate. As the causal links among ETS, injury, and illness become more established by the scientific and medical communities, the number of lawsuits will undoubtedly rise. As one commentator noted, "the tort system is an unusually sensitive barometer to health and safetyrelated events, m This article discusses the health findings regarding ETS and the current status of the ETS controversy relative to the hospitality industry, reviews litigation against the tobacco industry, analyzes potential employee-as-plaintifflegal theories, and concludes with suggestions for the hospitality industry.
The ETS Controversy Environmental tobacco smoke, also called secondhand smoke, has been the object of study and a source of
contention for a quarter of a century. 2 ETS is composed of the particulates and gases that smokers exhale as well as the smoke that is directly emitted by a burning cigarette. 3 One report traces the immediate controversy over secondhand smoke "...to 1971, when the U.S. Surgeon General first raised the possibility of health risks from the smoke that comes off the burning end of the cigarette.''4 In 1984 a physicist at the U.S. Environmental Protection Agency (EPA) independently developed a risk assessment that estimated that secondhand smoke was causing lung cancer in nonsmokers. That initial research indirectly led to the 1986 surgeon general's report linking passive smoking to lung cancer. 5 A broad epidemiological review conducted by the American Heart Association in 1992 concluded that as many as 45,000 nonsmokers per year suffer from heart disease or lung cancer caused by environmental tobacco smoke. 6 In late 1994 a study showed that nonsmoking adults exposed to ETS run a 40percent increase in asthma risk] In addition, secondhand smoke has been linked to health risks for lung,
1Robert L. Rabin, "A Sociolegai History of the Tobacco Tort Litigation," Stanford Law Review,, Vol. 44 (April 1992), p. 853. 2See: "The Health Consequences of Smoking--A Report of the Surgeon General," U.S. Department of Heakh, Education, and Welfare, 1972;"The Health Consequences of Involuntary Smoking-A Report of the Surgeon General," U.S. Department of Health and Human Services, 1986; "Environmental Tobacco Smoke: Measuring Exposures and Assessing Health Effects," National Research Council, Board on Environmental Studies and Toxicology, Committee on Passive Smoking, 1986;"Fast Food, Growing Children, and Passive Smoke: A Dangerous Menu," issued by a group of state attorneys general, Fall 1993; S. Katharine Hammond, Glorian Sorensen, RichardYoungstrom, and Judith K. Ockene,"Occupational Exposure to Environmental Tobacco Smoke," 274 JAMA 956 (1995); andJ.L. Pirkle et aI., "Exposure of the U.S. Population to Environmental Tobacco Smoke," 275 JAMA 1233 (April 24, 1996). 3Shannon Brownlee,"The Smoke Next Door," U.& News & World Report, June 20, 1994, p. 66. Brownlee writes: "An EPA analysis of secondhand smoke shows it contains 4,000 compounds, including 43 known carcinogens and other hazardous substances, such as ammonia." 4Alix M. Freedman,"Grand Jury Probes Secondhand-Smoke Studies," Wail StreetJournaI, Marketplace, February 15, 1996, p. B1. 5Margaret Kriz,"Where There's Smoke...," Tl~leNational Journal, May 7, 1994, p. 1056. The findings of EPA physicist Jim ReFace led to a National Research Council study, which in turn was the basis for the 1986 U.S. Surgeon General's report. C'Freedman, p. B3. 7"Passive Smoking Linked to Higher Risk of Asthma," Knoxville News-Sentinel, November 21, 1994, citing a study reported in the November 1994 American Journal of Respiratory and Critical Care MedMne by scientists at the universities of Lausanne and Basel in Switzerland, the EPA, and the Harvard School of Public Health.
.....
£
urinary-system, colon, kidney, pancreatic, and ovarian cancer. Additionally, heart and artery disease and respiratory ailments have been found to be caused by ETS. The list of ailments linked to ETS is not yet complete, as researchers find out more about ETS each year. 8 In 1993 the EPA announced that ETS is a Class A carcinogen, along with asbestos, arsenic, and radon. 9 The EPA's classification was "the result of the EPA's examination of existing epidemiological studies on women exposed to their husband's tobacco smoke and on children exposed to a parent's smoke.''1° The first draft of that widely criticized EPA study was released in June 1990, but final publication was delayed for three more years. 11 In 1994 tobacco companies Philip Morris and R J . Reynolds sued the EPA over the 1993 report and the Class A designation of ETS. 12 Moreover, officials at the Tobacco Institute, an industrysponsored research institute, do not believe the EPA study is relevant to hospitality-industry workplaces. "You cannot take data from a domestic setting and say this applies to a fast-food restaurant," said a spokesman. 13 Nevertheless, although various health organizations and tobacco companies continue to fight over the methods used by the EPA to reach the determination that ETS is a Class A carcinogen, the classification stands. 8Philip J. Hilts, "Secondhand Smoke: The Real Risk forYou andYour Family," Good Housekeeping, November i996, p. 171. 9"Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders," U.S. Environmental Protection Agency, 1993. I°Brownlee, p. 66. UJacob Sullum,"Just How Bad Is Secondhand Smoke?," The National Revieu4 May 16, 1994, p. 51. ~2"Tobacco Suit," Atlanta Journal a1~dConstitution,July 22, 1994, p. 8A. 13Laura M. Litvan,"A Smoke-Free Workplace? Proposed Federal Regulations," Nation's Business, May, 1994, p. 65, where she quotes Thomas Lauria, a Tobacco Institute spokesman.
February 1997 • 37'
Data from domestic settings may actually underestimate the amount of ETS exposure for individuals oke ace, ;e
the :ts of tings ;ic ~ed re to imes .an
~ker, bar :h Che ~s-
)rfor ag cals in secondhand smoke (N-nitro sodimethylamine, or NDMA) has led to the estimate that two hours spent in a smoky bar exposes a person to the equivalent amount of N D M A as the exposure one would get from smoking four cigarettes. This same research indicates that the inhalation of ETS by patrons for two hours in "typical nonsmoking section(s)" of restaurants gives an NDMA-exposure equivalent to smoking one and one-half cigarettes.IS A n e w test. By 1995 scientists at the U.S. Centers for Disease Control and Prevention (CDC) had 14Michael Siegel,"Involuntary Smoking in the Restaurant Workplace," Journal of the American Medical Association, Vol. 270, No. 4 (July 28, 1993), p. 490. aSHilts, p. 169. Cited are the test conclusions of S. Katharine Hammond, Ph.D., University of California at Berkeley, School of Public Health, who measured smoke levels in various locations to determine the presence of N-nitro sodimethylamine (NDMA), a chemical found in cigarette smoke.
38
I~tNILI HOTELAND RESTAURANTADMINISTRATIONQUARTERLY
developed a fast, precise method of testing human exposure to ETS through blood samples. The availability of such a test is expected to produce data that can be used to calculate cancer risks associated with exposure and the general relationship between passive smoke exposure and health) 6 The availability of these data will likely lower hurdles that have traditionally prevented widespread ETS litigation. To date, plaintif£ have found it difficult, if not impossible, to prove exposure levels and, therefore, causation. In relation to ETS-liability for employee exposure, the most significant health study to date found that the effects of ETS exposure linger, and that nicotine by-products are traceable in blood up to three days after an exposure limited to just one or two hours. Iv F i n d i n g links. In April 1996 the
.Journal of the American Medical Assoclarion published new findings from the CDC that indicated that exposure to workplace tobacco smoke might be a much bigger danger to health than workers had been led to believe. TM The CDC findings, encompassing the most extensive data ever compiled on bystanders' exposure to cigarette smoke in U.S. workplaces, involved physical examinations performed on more than 12,000 individuals. The exams revealed that 87.9 percent of the tested individuals had cotinine, a nicotine residue, in their blood serum. A journalist examining this study speculated that the findings "will likely add ballast to antismoking groups' efforts at the federal, state, and local levels to ban 16Karen H s u , " C D C Refines Way to Gauge Passive Smoke," Wall StreetJournal, August 23, 1995, p. 95. 17Hsu, p. 95. lSTimothy Noah,"Exposure to Workplace Tobacco Smoke Is Greater Than Believed, Study Says," Wall StreetJournal, April 24,1996.
H U M A N
smoking in office buildings and other public places.''t9 Another recent scientific finding in relation to ETS hazards may be important for both smokers and bystanders. In a study published in October 1996, researchers concluded that benzo[a]pyrene, a component in cigarette smoke, causes damage to a gene that suppresses tumors. "This study provides a direct link between a defined cigarettesmoke carcinogen and human cancer mutations. ''2° Concern for employee health has prompted the U.S. Occupational Safety and Health Administration (OSHA) to propose measures that "... could affect all places of employment, including office buildings, bars, and restaurants. The OSHA rules would require employers to run HVAC systems for all work shifts and implement indoor-airquality compliance plans. ''2. OSHA officials postponed implementation of the proposals, however, following a tremendous volume of public comment. "It's not a dead issue, but it's definitely on a slower track because of the volume of interest," said an O S H A spokeswoman in late 1995. 22 Displeasure over potential and actual smoking bans has been registered by such hospitality trade groups as the National Licensed Beverage Association 23 and the National Restaurant Association (NRA). The N R A is against gov19Noah, op. eit. 2°Mikhail F. Denissenko, Annie Pao, MoonShong Tang, and Gerd P. Pfeifer, "Preferential Formation ofBenzo[a]pyrene Adducts at Lung Cancer Mutational Hotspots ii1 P53," Science, October 18, 1996, pp. 317,430. 21Lois Weiss,"Smoking Bills on Agenda," Real Estate Weekly, June 1, 1994, p. i, quoting Nicholas M. Charchiaro, Sr., branch manager for AFA Protective Systems regarding OSHA rule 29 C F R 1910.1033. 22Associated Press,"Casinos Buck OSHA NoSmoking Proposal," Knoxville News-Sentinel, December 9, 1995, p. C8. 23"NLBA Warns of 'Nationwide Catastrophe,'" [email protected], February 9, 1996.
ernment regulation of smoking in the workplace and is funding research on the economic impact of the proposed OSHA regulations. "We believe in market forces and that employers are better-suited than the government regulators to develop policies in individual restaurants," said an N R A spokeswoman.
24
A press release issued by the N1KA in November 1995 stated that the assumptions regarding secondhand smoke were not holding up under public scrutiny, as Even after the release of the EPA findings, the American Heart Association study, and the availability of the new cotinine blood-testing technology, the N1KA endorsed a "market-forces approach" in response to the proposed O S H A indoor-air-quality standards. The N R A contention is that the market will force restaurants to ban smoking if customers and employees demand an environment free of ETS. P o o r p u b l i c awareness. If the "market forces" proponents are successful in preventing passage of legislated workplace smoking bans, however, it is unlikely that customers and employees will demand an ETS-free environment, because the public perception of the dangers of ETS appears to be low."Scientists consistently rank indoor-air pollution at or near the top of environmental health risks in the United States. Public opinion polls, however, continue to find most Americans do not perceive the risk of indoor-air pollution to be great. ''26 At least one state industry association, the California Restaurant 24Litvan, p. 65, quoting Wendy Webster, spokeswoman for the NRA. 2SNational Restaurant Association,"Assumptions on Second-Hand Smoke Not Holding Up Under Scientific Scrutiny," press release, November 14, 1995. 26Ken Sexton,"An Inside Look at Air Pollution; Complicated Public Policy Issues at Stake," EPAJournal, October, 1993, p. 9.
R E S O U R C E S
Association (CRA) has stepped forward in favor of a ban on smoking in restaurants arid bars. The C R A recently cosponsored a California bill prohibiting smoking in workplaces, with a time-limited exemption for bars. C R A president 1Konald Higgins noted that "the CRA'S board of directors recognized which way the smoke was blowing in 1990 .... We need to recognize that the public is growing increasingly intolerant of health risks. ''e7 Some businesses banned smoking, notably McDonald's and Dunkin' Donuts. Moreover, the Council of Chain Restaurants has endorsed federal legislation to prohibit smoking in all public places. 28 Dunkin' Donuts and McDonald's, however, are the only national restaurant chains to date that prohibit smoking in their franchise outlets. 29
Tobacco-Related Litigation More than 40 years have passed since the first health-related lawsuit was filed against a cigarette manufacturer. 3° Roughly 800 complaints have been filed against tobacco manufacturers during that 40-year span, yet only 20 cases have gone to triaP *and no tobacco companies have yet paid any money to smokers who claimed that they were injured by the use of cigarettes. 32 The tobacco industry is reexamining its strategy regarding such litigation. In early 1996 the Liggett Group became the first tobacco 27Alan Liddle, "Food Service Leaders Rally for Unity at Western Show," Nation's Restaurant News, September 5, 1994, p. 1. 28A]ice Horrigan, "The Smoking Gun: Passive Smoke Hazards," E, October, 1994, p. 28. 2~Hilts, p. 173. Outlets in Oklahoma are an exception, as state law there mandates that restaurants allow smoking. 3°Mark Curriden,"The Heat Is On," ABA Journal, September 1994, p. 58. 31Jolie Solomon and Peter Katel,"When There's Smoke, There's Fire," Newsweek, October 28, 1996, p. 52. 32Rabin, p. 857.
February 1997 • 39
company to agree to settle some of the suits it faced. Other tobacco companies, including R J . Reynolds, have indicated that out-of-court settlement may be the best way for the tobacco companies to resolve health-related lawsuits .33 "Plaintiffs' lawyers pointed out that the [Liggett] settlement has great symbolic value.Just getting a tobacco company to agree to pay plaintiffs anything is a watershed development in the 40-year history of tobacco litigation. ''34 If the tobacco companies change their approach, hotel and restaurant operators may find themselves facing health-related litigation. So far, hospitality-industry operators have relied on the tobacco industry's historical immunity from liability as justification for a stance against workplace smoking bans. Offense and defense. Plaintiffs began to try to recover from tobacco companies in the 1950s on theories of misrepresentation, fraud, negligence, and breach of warranty. The tobacco companies raised numerous defenses, including assumption of risk and contributory negligence. Moreover, the tobacco companies have long used a proven strategy for success in such suits, namely fighting relentlessly against claimants. They have defended cases, regardless of cost, through multiple trials and appellate actions. In the process, they have exhausted the financial and emotional resources of the claimants, often before trial. 3s The first smoking plaintiff to prevail in a suit against the tobacco manufacturers won on August 9, 33Suein L. Hwang, " R J R Chief Says He Would Consider a 'Resolution' to Cigarette Controversy," Wall Street Journal, March 25, 1996, p. B3. 34Milo Geyelin, "Liggett, Five States Set Pact Covering Treatment of Smoking-Related Illnesses," Wall StreetJournal, March 18,1996, p. A3. 3SRabin, p. 857.
4o
1996. 36 If this case is upheld on appeal, it will mark the first time that a tobacco company was forced to pay money to a plaintiff because of an injury caused by smoking. N o n s m o k e r s sue. A class-action suit against tobacco companies by 60,000 nonsmoking airline flight attendants who were exposed to ETS in the workplace was certified by a Florida state judge in midDecember 19943v and is expected to go to trial in the spring of 1997. 38 The tobacco companies won an initial victory by having the class action dismissed, but the Third District Court of Appeals for Florida reversed the dismissal and denied a rehearing. The Florida Supreme Court denied review of the case, meaning that it will go forward. 39
Legal Theories Available to ETS Employee-Plaintiffs Employers who knowingly expose their employees to hazardous or toxic substances are subject to workers' compensation claims and, possibly, tort actions. Should research strengthen the link between ETS and health problems, employers who allow smoking on the premises may face claims of injury. Nevertheless, in keeping with the public's low perception of ETS hazards, restaurateurs do not appear to be concerned about the potential legal liability for employees' exposure to ETS. A 1996 study that surveyed restaurant owners found that less than 38 percent of respondents agreed that restaurant 3~'Carter v. Brown & Williamson Tobacco Corp., 95-00934 (Cir. Ct., Duval Co., Fla.). 37jnnda Woo,"Cigarette Suit Approval," Wall Streetdournal, December 13, 1994, p. B l l . 3SPhilip J. Hilts,"A Personal War Against Tobacco," Good Housekeeping, November 1996, p. 173. 39See: Broin et al. v. Philip Morris Companies Inc. et al., 641 So.2d 888 (3d D C A 1994); Phih~p Morris Incorporated ~z Norma R. Broin, 654 So.2d 919 (Fla.1995); and Philip Morris Inc., et al. v. Norma R. Broin, et al., 1996 WL 1146 (FLA. APE3 DIST.)(1996).
EURNELLHOTELANDRESTAURANTADMINISTRATIONQUARTERLY
owners have an obligation to protect employees from secondhand smoke, g0 Workers' c o m p e n s a t i o n . Workers' compensation law has been applied to several cases of ETS-related damages. A legal precedent was set in December 1995 when the first workers' compensation award for ETS-induced lung cancer was given, el In a case that surprised the tobacco industry, a federal hearing examiner in Cleveland, Ohio, awarded death benefits to the widower of a Veteran's Administration nurse who died of lung cancer after working in the psychiatric unit o f a V.A. hospital for 18 years. Co-workers testified at the hearing that there were times when the heads of patients could not be seen across the room because the smoke was so dense. In 1991 a plaintiff who worked on. an assembly line in a Ford Motor plant was found to have a disabling lung condition brought on by years of inhaling ETS and industrial air pollutants. 42 In 1994 and 1995 office workers exposed to ETS were found to have sustained an accidental injury arising out of and in the course of their employment through their exposure to ETS. 43 The mul4°David C. Bojanic,"The Smoking Debate: A Look at the Issues Surrounding Smoking Bans in Restaurants," Hospitality Research Journal, Vol. 20, No. I (1996), p. 27. It is not possible to determine whether the restaurateur-respondents made a distinction between being morally obligated and being legally obligated to protect employees from ETS. 4tSee: Milo Geyelin,"Widower Wins Death Benefits in Case Over Secondhand Smoke in Workplace," Wall StreetJournaI, December 13, 1995, p. B6; and"VA Is Ordered to Pay Workers' Comp for Death Blamed on Secondhand Smoke," Knoxville News-Sentinel, December 16, 1995, p. A8. 42Fasang p. Ford Motor Company, 4 M I W C L R P 3099 (1991). ~3dohannsen v. New York City Department of Housing Preservation and Development, 94 N Y W C L R P.2043, and Claimant ~z New York State Division of Substance Abuse, 95 N Y W C L R P 1149.
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tiple chemical sensitivities of one claimant were found to be causally related to her work environment and, therefore, constituted a disability. Although workers' compensation is a logical route for ETS-injury claims, not all employees will necessarily take that route because it has specific disadvantages. "The chief benefit of the workers' compensation system for the injured employee is that it provides a much speedier and more certain recovery than a suit at law.''44 Because workers' compensation is usually the exclusive remedy for the injured employee, however, the employee "gains a statutory no-fault remedy, but sacrifices the right to a potentially larger recovery in tort. ''45 Moreover, workers' compensation claims for environmental or toxic exposure illnesses historically have been limited by the short statute of limitations of most workers' compensation statutes. That shortcoming could change, however. For example, the NewYork State Assembly is considering removing that state's two-year statute of limitation for ETS claims. 46 Strategies that have been used successfully to get around those workers' compensation limitations are discussed below. D e t o u r 1. An injured employee may avoid workers' compensation and head straight to court if there is a chance of prevailing on any alternative legal theory because of the lower, statutorily determined amounts awarded through workers' compensation insurance. Moreover, one legal theory holds that ETS damages are inherently outside the coverage of workers' compensation. 44W. Page Keemn et al., Products Liability and Safety, 2nd Edition (Mineola, NY: The Foundation Press, Inc., 1989), p. 684. 45Ibid. 46Weiss, p. 1.
ETS plaintiffs have been creative in designing alternative causes of action, although to date the only claim that has met with success has been a claim of negligence. The various legal theories that have been used by employees injured in the workplace by ETS include the common-law duty to provide a safe work environment, 47 negligence. 4s infliction of negligent or intentional emotional distress, 49 violation of disability statutes, s° a claim of the constitutional right to a smoke-free workplace, 51 and an implied breach of contract action for a smoke-flee workplace. 52 The reasoning of the court in the negligence case, McCarthy v. Department of Social & Health Services. is particularly illuminating because it differentiates ETS-exposure complaints from those that are specifically occupational in nature (e.g., exposure to asbestos). The McCarthy court held that:
R E S O U R C E S
Should research strengthen the link between ETS and health problems, employers who allow smoking on the
premisesmay face claims of
injury.
[IJf the employee could prove that her employer had negligently exposed her to tobacco smoke in the workplace and that the disease she contracted because of such negligence was not peculiar to, or inherent in, her occupation, and thus not within the exclusive coverage of the workers' compensation act, then she had a common-law action for negligence. 53
In 1992 the Nevada Supreme Court specified that ETS is not inherently a part of the casino's 47Gordon v. Raven Systems & Research, Inc. (1983, Dist Col App) 462 A2d 10. 48McCarthy v. Department of Social & Health Services (1986) 46 Wash App 125,730 P2d 681, 1 BNA IER Cas 1233, 106 CCH LC P 55750, review gr 108 Wash 2d 1001. 49Bernad v. Cameron & Colby Co. (1986) 397 Mass 320, 491 NE2d 604, 2 BNA IElZ Cas 678, 104 CCH LC P 55584, 63 ALR4th 1015. ~oViekers v. Veterans Administration (1982, WD Wash) 549 ESupp. 85, 29 BNA FEP Cas 1197, 30 CCH EPD P 33099. SlKensell v. Oklahoma (1983, CA10 Okla) 716 F2d /350. 52Bernard, 397 Mass at 320, supra. S3McCarthy, 46 Wash App at 125, supra.
February1997 • 41
business and found that a casino employee was therefore not eligible for workers' compensation under a state Occupational Disease Act: [I]t is apparent to us that despite its common presence in bars and casinos, environmental tobacco smoke is not incidental to the character of these businesses, is not a natural incident of these businesses. 54
D e t o u r 2. Another detour around the limitations of workers' compensation is to prove that the employer committed an intentional tort. However, this exception to the workers' compensation statutes has usually been construed very narrowly and the employer has had to cross the line into fraudulent concealment of the risks involvedJs ETS-related injuries or illnesses may not be subject to this type of claim because knowledge of the hazards of ETS are generally available to the general public, even if those hazards are not widely accepted. D e t o u r 3. Yet a third way to circumvent workers' compensation may be found in the "dual capacity" doctrine. When the employer has a dual capacity, both as an employer and as a tortfeasor, the employee may pursue a private cause of action, skirting workers' compensation. If a business owner is a heaW smoker, for example, subjecting the employee to daily doses of ETS, the employer could perhaps be found to have dual capacity as a tortfeasor.
Further, if the employer actively fought to avoid a smoking ban for fear of lost profits, he or she could be seen as deliberately exposing employees to a known Class A carcinogen, potentially allowing a toxic tort action. 56 D e t o u r 4. Employees can also sue under the American with Disabilities Act if they have requested accommodation for a disability caused or exacerbated by ETS and have been denied that accommodation. 57 The provision of a smokefree workplace can be found to be a reasonable accommodation for an employer to make. So many businesses have imposed a workplace smoking ban, including hundreds of hospitality-industry businesses, that it would be hard to claim that a ban was unreasonable.
Employers' Options The prospect of an employee lawsuit against an individual restaurant or bar owner is an expensive one. While the employer would have to find financial or legal resources to fight such a lawsuit, an employee is able to retain a law firm on a contingency basis. Even if industry associations were to raise the funds to support test cases, the cost of potential class-action suits could be prohibitive. Perhaps the only resource available to the small business owner faced with this type of suit would be financial support from tobacco com-
S4palmer v. Del l/Vebb'sHigh Sierra, 108 NEW 673,838 R2D 435 (1992). SSMillison v. E.I. du Pont de Nemours & Co., 101 NJ. 161,501 A.2d 505 (1985) anddohns-Mansville Product Corp. v. Superior Court of Contra Costa County (Reba Rudkin, real party in interesO, 27 Cal. 3d 465, 612 R2d 948, 165 Cal. Rptr. 858 (1980). Sqn the past, some casinos supplied free cigarettes to all customers. Later, free cigarettes were supplied only to favored customers. This dual capacity (employer and retailer) could enhance the plaintiff's right to recovery. The plaintiffin Palme~ 838 R2D at 437, an employee of a casino, sued because he was constantly exposed to ETS in the workplace (he was a dealer). The Palmer case empha-. sized that this particular casino encouraged smoking by giving away free cigarettes, and that the casino was a retailer for economic gain because the cigarettes enhanced the customers' value perception. STInHomeyer lz Stanley Tulchin Associates, Inc., the Seventh Circuit Court of Appeals recently reversed and remanded a dismissal of an Americans with Disabilities Act (ADA) claim. The court did so because the lower court had improperly held that there was no set of facts that the plaintiff could plead that would make her chronic severe allergic rhiuitis and sinusitis a "disability" within the meaning of the act (1996 WL 428030 [7th Cir.(Ill.)]). Earlier, a federal district court in the Seventh Circuit had refused to dismiss a similar case, stating that a plaintiff with ETS-triggered asthma could go forward with an ADA claim against his employer. The Court held that a substantial limitation on the ability to breathe is a disability within the meaning of the ADA. Bell v. Elmhurst Chicago Stone Comparly, 919 E Supp 308, N.D. Ill. (1996).
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HOTELAND RESTAURANTADMINISTRATIONQUARTERLY
panies, s* But unless tobacco companies are willing to foot the entire litigation bill, which is unlikely, hospitality-business owners should consider the potential detrimental impact of a large compensatory and punitive damage award to an employee or patron. Although government-imposed smoking bans are anathema to most restaurant associations, one strategy for restaurateurs concerned about potential ETS-based liability is to support wide-area smoking ordinances. Politics aside, a municipal smoking ordinance levels the field for restaurateurs who are concerned about ETS. Many smoking "bans," such as that in NewYork City, function as ordinances that specify the circumstances under which smoking is permitted, s9 Although opponents of smoking bans fret about leakage of business across municipal lines, restaurateurs operating under such ordinances are less likely to face ETS lawsuits than those who have no policy regarding smoking, whether mandated by government or selfimposed. Even if some business is lost--a point still in contention--a restaurateur must weigh the value of that business against the prospect of a far larger economic loss from an ETS judgment. The studies and case law reviewed here indicate that there are compelling reasons why hospitality-industry operators and owners might decide to ban smoking for purely economic reasons. There is also sufficient medical research and testimony that suggest there are humane and ethical reasons to consider such a ban as well. 6° CO SSDoug Levy,"Struggling to Clear the Air on Tobacco," U.S.A. Today, October 12, 1994,p. 1D. 59David L. Corsun, Cheri A.Young, and Cathy A. Enz,"Should NYC's Restaurateurs Lighten Up?," Cornell Hotel and Restaurant Administration Quarterly, Vol. 37, No, 2 (April 1996), p. 26. 6°Sandra G. Spodman,"Restaurant Employees' Risky Business: Research Links Waiters' Lung Problems to Secondhand Smoke," Washington Post, August 3, 1993, p. WH7; and Siegel, p. 490.