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Are You Courting a Discrimination Suite?

Are You Courting A Discrimination Suit?

Ask any denizen of lower Manhattan about Coffee Shop, a Brazilian-themed restaurant in the Union Square neighborhood, and they'll say something along the lines of, "Oh, yeah, the place with the model wait staff." Not model in the sense of exemplary; model as in, when they aren't slinging Mojitos, they get paid to be photographed.

Coffee Shop isn't alone in its strategy. Besieged by competition, restaurateurs, hoteliers and nightclub owners will do anything to get an edge. Hiring servers that look as if they have stepped straight off the pages of a fashion magazine is a time-worn trick to drum up a hot rep and attract customers--but that doesn't mean proprietors aren't playing with fire.

"The Equal Opportunity Employment Commission has been paying more attention to hiring practices in the hospitality industry of late," says Carolyn Richmond, a labor lawyer with Seyfarth Shaw in Manhattan. "I have seen the number of charges brought by the EEOC against restaurants go up."

The Business Of Nightlife

This issue doesn't just affect gender. Say you are opening a French bistro. For credibility's sake, you want to hire servers--male or female, young or old, attractive or plain--who were born and raised in France. Bad move: Under labor laws, you can't discriminate based on nationality.

The question for entrepreneurs: Where to draw the line between strategy and discrimination? And how close to skirting it is worth the risk?

The answer lies in a murky stew of statutes and case law. Codified law comes in three forms: federal (under Title VII), state and city codes. Specific statutes vary by location, but the hot-button issues are age, gender, race, national origin and even sexual orientation--but not attractiveness.

"If you are discriminating against people because they are unattractive or overweight, that's not illegal," says Walker Harmon Jr., head of his eponymous labor law firm in Manhattan. As for all those trendy eateries and watering holes, the issue is not that the servers are beautiful; it's that they are young, and in many cases, female.

Some jobs come with a built-in defense: Lawyers call it a "bona fide occupational qualification," or BFOQ. These standards trump protections of hallowed characteristics like gender and age. Example: Priests in the Catholic Church must be male. Yet most distinctions aren't nearly as clear-cut.

Take Hooters, the restaurant chain known for hiring bubbly (and buxom) female waitstaff--a strategy criticized by the EEOC in years past. Being a woman is not a necessary qualification for providing good food service. Hooters has kept the authorities at bay by reclassifying its staff as "server-entertainers" crucial to its business model.

Once employees are on the job, other thorny issues like appearance, grooming and dress code come into play. Casinos have caught fire recently for demanding that female servers wear makeup, don sexy clothes and even drop weight. Here, too, the legal ramifications are as clear as mud. "Restaurateurs are playing a risky game," says Richmond.

While proprietors are understandably loath to discuss discrimination, here is their quiet risk-reward calculation: Hospitality jobs are everywhere and bringing a lawsuit is expensive, so better to hire who you want and let the gripes fall where they may. Potential damages? Everything from mild distraction to six-figure payouts and a river of nasty ink.

If you don't want the EEOC sniffing around, first ask yourself: Is there a truly legitimate business need for a particular hiring standard? Go back to that French bistro: You could justify a requirement that servers speak French, but you'd have a tougher time proving that they also had to be, say, females under the age of 30.

Next, edit your want ads. Troll the hospitality job postings at and you'll find thousands of entrepreneurs begging for a slap by the EEOC. "Female bartenders wanted!" is a classic poisonous plea; another is asking for a photo along with the application. A plaintiff attorney's interpretation: You were vetting applicants based on ethnicity.

Understand, too, that labor laws protect employees not just from employers but also from customers. That's why entrepreneurs need a well-articulated anti-harassment policy--and be willing to eject customers who don't respect it. If not, employees can sue you for not getting their backs, says Richmond.

If you do decide to run the risk of a labor suit, at least make it worth your while. In May, the New York Post reported that some of the city's top financial firms--including Morgan Stanley (nyse: MS-news-people) and Lehman Brothers (nyse: LEH-news-people)--have banned their executives from lunching at the Hawaiian Tropic Zone, a restaurant that features waitresses dressed in bikinis and sarongs, because "they think it's too much like a strip club."

Sometimes, it seems, sex doesn't sell.


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