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Posts from December 2014.

What is the impact of the FDA’s New Food-Labeling Regulations?  The new rules cover any restaurant or “retail food establishment” selling “restaurant-type food.”  Does that include the wide array of retail and hospitality businesses, including bakeries, cafeterias, coffee shops, convenience stores?  Dan Vecchio, a litigator in our Seattle office, has been watching the latest developments.  As our guest author today, Dan can shed his insights on how these new regulations might affect hoteliers and restaurateurs.  Thank you for today’s post, Dan! - Greg

In the spirit of the giving season, the FDA has finally issued its long-awaited final rules on menu labeling, which had languished in draft form for several years.  But for many hospitality businesses, the agency’s year-end gift is little more than a lump of coal.  That is because when the rules go into effect on December 1, 2015, they will require restaurants, hotels, and other sellers of “restaurant-type food” to provide nutrition information for the items on their menus, closing what the FDA perceived as a “regulatory gap” in the food-labeling sphere.

The new rules apply primarily to chain or franchise establishments (although the FDA is quick to point out that other businesses may voluntarily opt in if desired)! Specifically, the rules cover any restaurant or “retail food establishment” that is part of a chain of twenty or more locations doing business under the same name, serving substantially similar food items at each location.  Sounds simple enough, but it is the FDA’s definition of “restaurant” that has caused considerable heartburn.  In the view of the agency, a restaurant can be any one of a wide array of retail and hospitality businesses, including  bakeries, cafeterias, coffee shops, convenience stores, delicatessens, bowling alleys, amusement parks, grocery stores, fast food restaurants, table service restaurants, or any establishment offering for sale what the FDA has helpfully dubbed “restaurant-type food.”

What is “restaurant-type food,” exactly?  According to the new rules, it is food that is usually eaten at the restaurant, or while walking away, or “soon after arriving at another location,” and is either sold for immediate consumption or is ready-to-eat somewhere else.  In other words, whether it’s take-out, dine-in, or maybe a deli sandwich for dinner tonight, the rules will apply.

So, what makes a restaurant part of a chain?  According to the agency, it must be doing business under the same name (or a substantially similar name, such as “Restaurant” and “Restaurant Express”) as at least nineteen other locations, and must serve the same or substantially similar menu items.  “Locations” include restaurants within other facilities, and indeed multiple restaurants within the same building (a mall, for example) are counted individually.  If the restaurant has no name of its own – for example, a cafeteria in an office building or an unnamed hotel café – then the restaurant is considered to be doing business under the name of its parent entity.  So, that means that if each of a hotel’s twenty or more locations has an identically-named or unnamed restaurant (including the one providing room service), the rules will apply to them.  On the other hand, the rules would not apply to a hotel restaurant if it has its own unique name.

To comply with the rules, businesses must include calorie and other nutrition information on their menus, menu boards, signs adjacent to the food, or the like – essentially, wherever the standard food items and prices are listed.  They also must print a “succinct statement” informing customers of the recommended daily caloric intake for adults or children, depending on the menu’s target audience.  Restaurants also must keep nutrition information for their standard fare on hand in case it is requested by a customer – and the restaurant must note on the menu that such information is available.

Failing to adhere to the rules is sure to cause quite the bellyache, as well.  In response to public comments, the FDA noted that any person exercising authority and supervisory responsibility over a restaurant or similar retail food establishment could be liable for a violation.  That could mean that even the owner of a single franchise could get his or her goose cooked if that location isn’t up to snuff.

If there is any silver lining for the hotel industry, though, it is that these rules today don’t apply to alcoholic beverages that are “food on display” and not self-service, such as those bottles of liquor behind the hotel bar.  Of course, any drinks that are listed as standard menu items still will need to be labeled.  Bon appétit!

For more information about the new Food Labeling Regulations, please visit the Federal Register website. Also if you have any questions, please contact Greg Duff or Dan Vecchio.

Jared Van Kirk is a member of Garvey Schubert Barer’s Labor and Employment Group and a previous blog contributor.  Jared has been following how legalized recreational marijuana in Washington affects all employers and how the Washington State Liquor Control Board (WSLCB) will regulate marijuana consumption in premises holding liquor licenses, which will have a direct impact on the hospitality industry in Washington State. Jared is also a member of Garvey Schubert Barer’s Cannabis Industry Group and has been involved in opposing challenges to Washington’s recreational marijuana laws.  Thank you, Jared, for sharing this very important update. – Greg

Since Washington voters passed I-502 in 2012, there has been much discussion concerning how hoteliers should respond to guests who seek to use (or are caught using) marijuana on a hotel property, either in a public area or in a guest room. Could a hotel even promote itself as friendly to marijuana tourists?

Use of marijuana in view of the general public remains illegal under state law and Liquor Control Board regulations have long required liquor licensees to conduct their licensed premises in compliance with such state drug laws.  Allowing guests to smoke anything, including marijuana, in public spaces may also violate public smoking laws and smoke-free workplace laws.  So, it was fairly clear that guests could not use marijuana in the public areas of a hotel, and a hotel could not allow guests to use marijuana (smoked or otherwise) in any public place.  But that left open the question of whether a hotel could allow guests to use marijuana in smoking-friendly rooms, either explicitly or simply by taking no affirmative action against use of marijuana in guest rooms.

Amended Liquor Control Board rules that went into effect earlier this year appear to answer this question with respect to properties with hotel liquor licenses.  WAC 314-11-015 addresses the responsibilities of all liquor licensees, including hotel licensees.  The amendments state that licensees and their employees may not:

Engage in or permit any employee or other person to engage in the consumption of any type of marijuana, usable marijuana, or marijuana-infused products in a liquor licensed business, including outdoor service areas or any part of the property owned or controlled by the licensee.

or

Permit any person consuming, or who has consumed within the licensed premises, any type of marijuana, usable marijuana, or marijuana-infused products to remain on any part of the licensed premises.

"Licensed premises" includes all areas under the legal control of the licensee and available to or used by customers, which would include guest rooms.

It is unclear whether the Liquor Control Board intended these amendments to require hotels with premises licenses to exclude marijuana use in guest rooms and require licensed hotels to remove patrons who have used marijuana in guest rooms. However, as written, the amended rule states that a hotel licensee may not permit any person to consume marijuana in any part of the property owned or controlled by the licensee nor remain on any part of the licensed premises after consuming marijuana on the licensed premises.  The letter of these rules require licensed hotels to prohibit use of marijuana in all areas of their property, including guest rooms, and to remove patrons who are found to have consumed marijuana on their property.

If you have any questions about the issues raised in Jared Van Kirk's post, please contact us! Greg Duff or Jared Van Kirk.

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Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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