HospitalityLawyer.com | Melissa Dallas Case Study | Assessing Corporate Social Responsibility in Hospitality Organizations Using Lawsuits as a Gauge by Melissa Dallas
This study identifies and describes major lawsuits against Fortune 500 hotel, foodservice, and casino corporations over the past ten years and suggests that these suits are one indicator of Corporate Social Responsibility (CSR). Lawsuits claiming fraud, discrimination, unjust enrichment, copyright infringement, and wrongful death which ended in settlements or jury awards above $2 million are included. This research follows the methodology of a 2006 study which examined similar claims against Fortune 100 companies.
The Filipino Street Games is a cultural Treasure cherished by generations of Filipinos. In the age of Modern technology & high-tech game gadgets, Magna Kultura Foundation advocated the revival of the Games of our heritage among the new generation. It bonds children and adults. It enlivens communities, at the same time, it created livelihood opportunities at the grassroots. It is both social and cultural entrepreneurship.
FOR MORE INFORMATION, CONTACT:
Dickie Aguado, Magna Kultura Foundation
Mobile Nos.: +63 917.899.0025 (Globe) or +63 922.899.0026 (Sun)
Direct Line No.: (632) 514-5868
Email Address: kulturapilipinas@gmail.com
The Filipino Street Games is a cultural Treasure cherished by generations of Filipinos. In the age of Modern technology & high-tech game gadgets, Magna Kultura Foundation advocated the revival of the Games of our heritage among the new generation. It bonds children and adults. It enlivens communities, at the same time, it created livelihood opportunities at the grassroots. It is both social and cultural entrepreneurship.
FOR MORE INFORMATION, CONTACT:
Dickie Aguado, Magna Kultura Foundation
Mobile Nos.: +63 917.899.0025 (Globe) or +63 922.899.0026 (Sun)
Direct Line No.: (632) 514-5868
Email Address: kulturapilipinas@gmail.com
This is the third chapter of the course Readings in Philippine History as per the course guide from Commission on Higher Education.
Course sub-topics:
-Site of the First Mass
-Cry of Balintawak or Pugad Lawin?
-Rizal's Retraction
This is the third chapter of the course Readings in Philippine History as per the course guide from Commission on Higher Education.
Course sub-topics:
-Site of the First Mass
-Cry of Balintawak or Pugad Lawin?
-Rizal's Retraction
Similar to HospitalityLawyer.com | Melissa Dallas Case Study | Assessing Corporate Social Responsibility in Hospitality Organizations Using Lawsuits as a Gauge by Melissa Dallas
The Importance of Ethics in Business Essay
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How Commercial Real Estate Giants Can Put Tenants' Hard Earned Dollars At RiskGail Fischer
Fischer provides a hard-hitting analysis of the biases and conflicts of interest that prevail in today's new commercial real estate environment. The "Big 4" global commercial real estate firms increasingly represent both landlords and tenants. But they make most of their money from the owners, investors, developers and landlords. Tenants come last and as a result risk getting a bad deal. "It's a gamble for a company to put its corporate real estate portfolio in the hands of giant firms that serve multiple players and have much to gain by supporting the best deal for landlords rather than helping tenants minimize costs," Fischer said.
ETH–1Marketing Ethics Prepared and written by Dr. Linda.docxSANSKAR20
ETH–1
Marketing Ethics
� Prepared and written by Dr. Linda Ferrell,
University of Wyoming
Marketing ethics addresses principles and standards that define acceptable conductin the marketplace. Marketing usually occurs in the context of an organization,
and unethical activities usually develop from the pressure to meet performance objec-
tives. Some obvious ethical issues in marketing involve clear-cut attempts to deceive
or take advantage of a situation. For example, two former senior executives with Ogilvy
& Mather Advertising were sentenced to more than a year in prison for conspiring to
overbill the government for an ad campaign warning children about the dangers of
drugs. The executives were also required to perform 400 hours of community service,
pay a fine, and draft a proposed code of ethics for the advertising industry.1 The
requirement to draft a code of ethics implies that the court viewed the executives’
wrongdoing as a lapse of ethical leadership in the advertising industry. Obviously, mis-
representing billing on accounts is a serious ethical issue which can evolve into mis-
conduct with severe repercussions. The overbilling in this case was to benefit the
advertising agency’s bottom line.
The Ethics Resource Center (www.erc.org) reported in its most recent National
Business Ethics Survey that “one in two employees witnessed at least one specific type
of misconduct.”2 At least 52 percent of employees observed at least one type of mis-
conduct in the past year, while the percentage of employees willing to report the
misconduct dropped by 10 percentage points between 2003 and 2005.3 This may
explain the increase in corporate whistle-blowing reports to the Securities and Exchange
Commission. Even with a regulatory requirement that public companies have an anony-
mous and confidential means of reporting misconduct under Sarbanes Oxley and the
Federal Sentencing Guidelines for Organizations, companies are likely to learn about
the ethical misconduct in marketing at the same time as the public. This overview of
marketing ethics is designed to help you understand and navigate organizational eth-
ical decisions. �
Why Marketing Ethics Is Important
There are many reasons to understand and develop the most effective approaches to
manage marketing ethics. All organizations face significant threats from ethical mis-
conduct and illegal behavior from employees and managers on a daily basis. Well-
meaning marketers often devise schemes that appear legal but are so ethically flawed
that they result in scandals and legal entanglements. For example, in one case, a sales-
person pretended to be in shipping rather than sales to hopefully develop customer
trust. The Colorado Consumer Protection Act was found to be violated in this case.
There is a need to identify potential risks and uncover the existence of activities or
events that relate to misconduct. Overbilling clients, deceptive sales methods, fraud,
antitrust, and price fixing are all ...
The Four Facesof Corporate CitizenshipARCHIE B. CARROLL.docxcherry686017
The Four Faces
of Corporate Citizenship
ARCHIE B. CARROLL
Some observers call it corporate socialresponsibility (CSR). Others refer to it ascorporate ethics. More recently, busi-
nesses’ social performance has been framed as
“corporate citizenship.” But, what does corpo-
rate citizenship really mean? What is business
expected to be or to do to be considered a good
corporate citizen? Is corporate citizenship com-
patible with or hostile to corporate growth and
profits?
A significant boost to corporate citizenship
initiatives was given in 1996 when President
Clinton called to Washington a group of leading
business people to discuss the notion of corpo-
rate citizenship and social responsibility. At
this conference, President Clinton exhorted the
business leaders to “do well” by their employees
as they make money for their shareholders.
He and then–Labor Secretary Robert Reich
announced the newly created Ron Brown Cor-
porate Citizenship Award, named for the late
commerce secretary who died in 1996 along
with a group of business executives on a trade
mission to Bosnia. The award was to honor
American companies each year deemed to best
exemplify efforts to support its workers.
President Clinton’s five criteria for the Ron
Brown Award for “good corporate citizenship”
boiled down to companies exhibiting the follow-
ing practices: “family-friendly” policies, such as
allowing family leave; good health and pension
benefits; a safe workplace; training and
advancement opportunities; and policies that
avoid layoffs. In 1998, the 1997 winners were
announced: IBM Corporation, for its diversity
programs, and Levi Strauss & Co., for its anti-
racism initiative “Project Change.”1 One could
not argue with these criteria nor these winners;
however, one cannot help but note that the cri-
teria all involve the relationship between com-
panies and their employees, with no mention
being made of shareholders, consumers, the
community in which the business is located, or
other important stakeholders. Surely corporate
citizenship extends beyond relationships be-
tween companies and their employees and
includes the business responding to and inter-
acting with these other vital stakeholders.
Decades of studying businesses’ corporate
social performance, their activities that extend
beyond profit-making, and their contributions
to the community lead one to conclude that cor-
porate citizenship is real—it is expected of busi-
ness by the public, and it is manifested by many
excellent companies. Further, corporate citi-
zenship addresses the relationship between
companies and all their important stakehold-
ers, not just employees.
The full gamut of corporate citizenship in-
cludes its four faces. Each “face,” aspect, or re-
sponsibility reveals an important facet that
contributes to the whole. Just as private citizens
are expected to fulfill these responsibilities,
companies are as well. Corporate citizenship
has an economic face, a legal face, an ethical
face, and ...
25law43665_ch02_025-046.indd 25 111618 1108 AMC H .docxstandfordabbot
25
law43665_ch02_025-046.indd 25 11/16/18 11:08 AM
C H A P T E R T W O
Managing Public
Issues and Stakeholder
Relationships
Businesses today operate in an ever-changing external environment, where effective management
requires anticipating emerging public issues and engaging positively with a wide range of stake-
holders. Whether the issue is growing concerns about climate change, health care, safety at work
or in our schools, social equality, or consumer safety, managers must respond to the opportunities
and risks it presents. To do so effectively often requires building relationships across organizational
boundaries, learning from external stakeholders, and altering practices in response. Effective man-
agement of public issues and stakeholder relationships builds value for the firm.
This Chapter Focuses on These Key Learning Objectives:
LO 2-1 Identifying public issues and analyzing gaps between corporate performance and stakeholder
expectations.
LO 2-2 Applying available tools or techniques to scan an organization’s multiple environments and assess-
ing stakeholder materiality.
LO 2-3 Describing the steps in the issue management process and determining how to make the process
most effective.
LO 2-4 Identifying the managerial skills required to respond to emerging issues effectively.
LO 2-5 Understanding the various stages through which businesses can engage with stakeholders, what
drives this engagement, and the role social media can play.
LO 2-6 Recognizing the value of creating stakeholder dialogue and networks.
Final PDF to printer
26 Part One Business in Society
law43665_ch02_025-046.indd 26 11/16/18 11:08 AM
A 2016 study from the Public Affairs Council found that many major corporations are
feeling increased pressure to speak out on social issues, ranging from discrimination and
human rights to environmental sustainability and quality education. Among companies
with more than $15 billion in annual revenue, more than three in four said expectations for
engagement had risen. Most of the pressure to engage in social issues, said the companies,
has come from their own employees.1
Legislative battles in North Carolina, Tennessee, Mississippi, and Georgia prompted
business leaders to take a stand favoring rights for transgender individuals. Dow Chemical,
Alcoa, and Northrup Grumman lobbied elected officials and publicly condemned measures
seen as discriminatory. Monsanto lead the fight in Missouri against a bill that would allow
businesses to deny certain services to same-sex couples as a matter of religious freedom. In
response to North Carolina’s state legislature passing a law that blocked antidiscriminatory
protections at the local level, Deutsche Bank, the German financial institution with signifi-
cant business in the United States, said it would freeze its plans to add jobs in North Caro-
lina. PayPal announced it would halt its plans to open a new global operations center there.
While .
The concept of CSR has been defined in a variety of different ways by diverse authors, companies and individuals and these different definitions lead to various implementation of the concept. The concept of CSR is beyond the donation of money by companies for philanthropic purposes. In the present day it is meant to be integrated into the company’s strategic culture and run in all levels of its operations. The concept of CSR precedes this very century but began to draw attention from the last 50 years. Ever since then, several authors and experts have made striking attempts to shed more light on its importance and relevance to business operations in the society. The relevance of this concept, how it evolve and its appropriateness in today’s business world is what the first part of this essay will look at while the second part will present the real life application of the concept using Beauty Base Ltd (a manufacturing company) as a case study.
Lesson Five Corporate Ethics in the 21st CenturyLesson Four d.docxsmile790243
Lesson Five: Corporate Ethics in the 21st Century
Lesson Four discussed some of the most prominent behavioral theories concerning leadership as well as their ethical implications. Lesson Six will introduce some modern concepts of ethics for businesses, including socially responsible investing, corporate social responsibility, and environmentalism.
With changes in public perception over time, the expectations of businesses operating within American society has changed considerably throughout the history of our nation. The classical view on the ethical role of businesses was predicated on the principle of profit maximization: the idea that the only purpose of a business is to maximize the amount of money generated for its owners. Furthermore, anything that runs counter to or distracts from this prerogative is antithetical to the essence of a business. The obligation to obey the law is implied based on the fact that businesses which violate laws typically suffer losses in the form of fines or even forced closure; so compliance with the law is a behavior that is compatible with, and in fact necessary to, the principle of profit maximization.
However, things have changed. Businesses have grown to sizes and degrees of influence that present substantial threats to the welfare of communities, families, the natural environment, etc. and society no longer sees businesses as being responsible only to shareholders (McWilliams & Siegel, 2001). This lesson will discuss the ways in which changes in public perception have reshaped the ethical obligations of businesses in the 21st century.
Socially Responsible Investing (SRI)
One of the biggest ways in which public perception has changed business and industry is through socially responsible investment (SRI) funds. In the business startup world, some investors with strong ethical compasses have chosen to restrict the types of businesses in which they are willing to invest with their capital (Sparkes & Cowton, 2004). Some of these restricted categories are more or less unanimously seen as immoral industries. Others, however, are more controversial.
· Alcohol: Obviously not all people abuse alcohol, and not all people view producers of alcohol as immoral. However, many SRI funds exclude alcohol companies because of the tragic effects that alcohol has in contexts such as drunk driving, etc.
· Tobacco: Virtually the same arguments that apply to alcohol apply to tobacco, except that tobacco is vilified for its unmistakable role in cancers, emphysema, and early mortality. Thus, SRI funds typically avoid tobacco companies as well.
· Gambling: Like alcohol, not all people have gambling problems or see any ethical issue with the gambling industry. However, we do know that gambling is another addictive behavior, and for this reason casinos are typically excluded from SRI funds.
· Weapons: Firearms are a heated subject with all of the current political debate surrounding Second Amendment rights and the best ways ...
Business Ethicsand the HR RolePast, Present, and FutureVannaSchrader3
Business Ethics
and the HR Role:
Past, Present, and Future
Mark R, Vickers, Human Resource Institute, St, Petersburg, FL
I
nherent in the term "business
ethics" is an unavoidable
tension: Managers must con-
tinuously balance the needs
of the organization and its
stockholders with the needs of
other stakeholders. Despite this
tension between competing
interests, today's business
leaders can model behaviors
and create a corporate culture
that support ethical business
practices even while making
their firms more competitive
in the marketplace.
The first step in any recovery process
is admitting you have a problem, and
businesses have a problem with ethics. It is
not just a matter of some arrogant, immoral
executives at a few companies getting greedy
and cooking the books. The problem is more
basic than that. The hard truth is that natur-
al, unavoidable tension is inherent in the
term "business ethics"—a tension that stems
from conflicts between the interests of
26 HUMAN RESOURCE PLANNING 28,1
companies and rheir employees, cubtomers, and the greater society
{ C o l u m b i a , IQOI).
Although society wants companies to create many well-paying
jobs, those same organizations want to limit compensation costs and
raise productivity levels. Customers want to purchase goods and
services at low prices, but businesses want to maximize profits. Society
wants to reduce pollution levels, but businesses want to minimize the
cost that environmental regulations add to their operations.
Because these conflicts are fundamental to the nature of husiness,
managers must continuously and consciously balance the needs of the
organization and its stockholders with the needs of other stakehold-
ers, including workers, customers, and the larger community.
Managers must also balance their personal needs and desires against
those of their organizations.
Balancing such factors in a slahle economic environment is tough
enough. What makes it even trickier these days is factors such as
globalization, technological innovation, and the quickening pace of
business change. There are just too many new developments for tra-
ditional ethical standards to keep up. At what point, for example, does
using cloning technology in medical research become unethical? Are
executive stock options a principled way of linking performance to
pay, or do options actually encourage unethical decision making?
When does offshore outsourcing become a form of labor exploitation
and a repudiation of community responsibility?
conducted jointly by rhe Society for Human Resource .Management
(SHRM) and the Ethics Resource Center (ERC). Among responding
SHRM members, the most commonly cited source of pressure to com-
promise ethics standards was the "need to follow boss's directive,"
cited by 49 percent of respondents. Human Resources has a role to
ensure that employees always know there is recourse through open
door policies or 1-800 support lines where they can question issues
that ...
The major credit rating agencies, Moody's, Standard & Poors, and Fitch, bear a heavy burden of responsibility for the financial meltdown. It was their seal of approval that enabled Wall Street to develop a multi-trillion-dollar market for bonds resting on a foundation of tricky loans and bubbly housing prices. Institutional investors around the world were seduced into buying these high-risk securities by credit ratings that made them out to be as safe as the most conventional corporate and municipal bonds.
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This presentation from Hotel Management & Investment (HMI) contains facts and figures regarding the Global and Argentine Tourism Industry and explains the synergies between Real Estate and Tourism.
Real Estate + Turismo - Oportunidad de inversión: Esta presentación contiene cifras y hechos relacionados con Global y argentina Industria Turismo y explica las sinergias entre Inmobiliario y Turismo.
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HospitalityLawyer.com | 2013 Global Congress on Travel Risk Management BrochureHospitalityLawyer.com
HospitalityLawyer.com, in coordination with the Greater Houston Convention & Visitors Bureau, will host the 3rd Global Congress on Travel Risk Management, September 30 to October 1, 2013, in Houston, Texas, at the Galleria Omni Hotel. The Global Congress focuses on solutions enabling businesses and governments to meet their Duty of Care to mobile employees and protecting mobile data.
The travel, tourism and hospitality industries are a $3.5 trillion global economic powerhouse encompassing transportation, lodging, and venues and events. Governments around the world spend trillions on infrastructure and travel support systems. Disruptions are costly, both financially and in customer goodwill.
The Global Congress’s objective is to facilitate the delivery of safe, secure and uninterrupted travel via an all-encompassing public-private dialogue dedicated to the sharing of best practices for issues faced by the global travel, tourism and hospitality industries.
For more information, please visit http://www.globalcongressontravel.com.
In the May-June 2013, we'll examine coverage for hotels facing fungi and bacteria claims, fraud & recovery, domestic violence in the industry, OSHA and whistleblowers, as well as provide you with updates for our upcoming travel and hospitality events.
For more information, please visit http://www.hospitalitylawyer.com.
HospitalityLawyer.com | 2013 Global Congress on Travel Risk Management BrochureHospitalityLawyer.com
HospitalityLawyer.com, in coordination with the Greater Houston Convention & Visitors Bureau, will host the 3rd Global Congress on Travel Risk Management, September 30 to October 1, 2013, in Houston, Texas, at the Galleria Omni Hotel. The Global Congress focuses on solutions enabling businesses and governments to meet their Duty of Care to mobile employees and protecting mobile data. What is the Global Congress?
For more information, please visit http://www.globalcongressontravel.com.
HospitalityLawyer.com | Linda K. Enghagen Lawsuit Study | Compliance With Sam...HospitalityLawyer.com
A series of discrimination lawsuits brought against hospitality industry businesses under state public accommodation discrimination laws highlight the ways in which some state’s laws afford protection to a broader range of protected groups than those covered by federal law. Given the relatively recent advent of legalized same-sex marriage and civil unions under some state laws, hospitality industry businesses need to ensure they are compliant with the relevant anti-discrimination laws in their respective states. In addition, research demonstrates a positive economic impact on wedding related spending in states permitting same-sex marriage and civil unions with a significant portion of that spending going to hospitality industry businesses for wedding related tourism.
HospitalityLawyer.com | December 2012 Issue Hospitality Lawyer Magazine HospitalityLawyer.com
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For 11 years, the Hospitality Law Conference has converged the country's hospitality thought leaders, breaking down silos, creating cross-functional dialogues for more effective execution and career enhancement. Lawyers have learned about the financial aspects of deals and the financial experts get a better understanding of the legal and compliance aspects. We also break down the barriers between legal, risk, loss prevention and HR for the operation. Together we do more deals, and we make hotels and restaurants safer and more secure for customers and employees. The Conference provides intensive education (CLE,CPE, HRCI and EI credit) and exceptional networking among legal, development, risk, finance, HR and operations.
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HospitalityLawyer.com | Stephen Barth in Lodging Hospitality Magazine Article...HospitalityLawyer.com
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The dispute came to a head in July when a coalition of disability rights organizations launched a national boycott and awareness campaign against the hotels and chains represented on the boards of the American Hotel & Lodging Association and the Asian American Hotel Owners Association, the industry’s leading lobbying groups. The AH&LA says it is working to educate its members on the law and how to comply, but it also hopes to keep educating Congress and the DOJ on its position that portable lifts would be a better solution.
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Register today!
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HospitalityLawyer.com | Melissa Dallas Case Study | Assessing Corporate Social Responsibility in Hospitality Organizations Using Lawsuits as a Gauge by Melissa Dallas
1. ASSESSING CORPORATE SOCIAL RESPONSIBILITY IN
HOSPITALITY ORGANIZATIONS USING LAWSUITS
AS A GAUGE
Melissa Dallas
Missouri State University
This study identifies and describes major lawsuits against Fortune 500 hotel,
foodservice, and casino corporations over the past ten years and suggests that these suits
are one indicator of Corporate Social Responsibility (CSR). Lawsuits claiming fraud,
discrimination, unjust enrichment, copyright infringement, and wrongful death which
ended in settlements or jury awards above $2 million are included. This research follows
the methodology of a 2006 study which examined similar claims against Fortune 100
companies.
KEYWORDS: Corporate social responsibility, hospitality lawsuits, ethics
In the early to mid-part of the last decade, it seemed as if claims of major
corporate misconduct were occurring almost weekly. Successful companies including
WorldCom and Enron filed for bankruptcy due to the fraudulent activities of their
corporate leaders. High profile Chief Executive Officers including Dennis Koslowski of
Tyco International and John Rigas of Adelphia Communications were convicted of a
variety of crimes. The reputations of major corporations were tainted and stock values
plummeted.
2. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 2
This era was filled with ethical and legal misdeeds, and brought the need for
increased Corporate Social Responsibility (CSR) to the forefront. Corporate Social
Responsibility, often called corporate conscience, mandates self-regulation and
accountability to all current and potential stakeholders. Research into the practices and
economic impact of CSR has been surfacing in a number of fields, but little has been
done in the hospitality arena. A recent study examined social responsibility patterns in the
top ten hotel companies (Holcomb et al., 2007). The socially responsible behaviors
included in this study were self-reported on websites and in annual and CSR reports, and
focused primarily on philanthropic and diversity initiatives. Similarly, an exploratory
study was undertaken which examined self-reported philanthropic initiatives undertaken
by lodging properties throughout the United States in an attempt to quantify the “social”
aspect of CSR (McGehee, 2009).
The concept of CSR is broader though and also encompasses economic, ethical,
and legal corporate behaviors (Carroll, 1991). Many describe law as “codified ethics” or,
conversely, describe ethics as “legal compliance plus.” Thus, one way to study CSR
patterns within the ethical and legal context is to categorically examine recent lawsuits
and their outcomes.
A recent study found that forty corporations listed in the 1999 Fortune 100 were
considered “unethical,” defined as engaging in fraud (accounting, securities, or
consumer), discriminatory practices, undisclosed executive pay, antitrust activities, patent
infringement, or other violations of the law (Clement, 2006). The most frequent type of
misconduct resulting in decisions, settlements, or fines of greater than $2 million was
accounting fraud (20 firms), followed by securities fraud (13 firms), consumer fraud (11
3. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 3
firms), discriminatory practices (six firms), antitrust activities (four firms), undisclosed
executive pay (two firms), patent infringement (two firms), and other violations of the
law (three firms). The most egregious violations occurred in the insurance and financial
services industries, and none of the forty firms were primarily engaged in the hospitality
industry.
Clement also recognized that a company that settles a lawsuit before it goes to
court is not necessarily admitting a wrong. Rather, settling out of court may be in the best
economic interest of the company in that the settlement may cost less than litigation. It is
also important to note that larger corporations are statistically vulnerable to more
lawsuits, and that current public interest, at any point in time, often results in an increased
number of associated lawsuits.
This study follows Clement’s methodology and focuses on two major segments of
the hospitality industry from the 2010 Fortune 500: 1) Food Services and 2) Hotels,
Casinos, and Resorts. The Fortune 500 was used rather than the Fortune 100 in order to
capture hospitality firms to include in the study. Suits decided or settled between 2001
and 2010 will be included, expanding the study from Clement’s five years to ten years.
Finally, settlements and awards under $2 million will generally not be mentioned. To
date, no comprehensive study has focused on lawsuits filed against leading hospitality
firms as an indicator of CSR. Thus, the major purpose of this study is to identify and
describe major lawsuits and their outcomes as they relate to the ethical and legal
parameters of CSR. The results of this study will necessarily be limited since relatively
few hospitality firms are included in the Fortune 500 and the number of lawsuits will be
4. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 4
less. However, this study will demonstrate the need to categorically examine lawsuits as
they relate to the most flagrant violations of ethics and law which are both pillars of CSR.
Corporate Classification Methodology
Out of the 2010 Fortune 500 list, ten companies were classified in the “food
service” or “hotel, casino, and resort” category (Fortune 500, 2010). The companies,
shown in Tables 1 and 2, include four in the food service industry and six in the hotels,
casinos, and resorts industry, respectively, and are listed in order of their Fortune 500
rank.
Table 1
Food Service Companies Included in the 2010 Fortune 500
Corporation Revenue Fortune 500 Rank
($ million)
McDonald’s 22,744.7 108
Yum! Brands 10,836.0 216
Starbucks 9,774.6 241
Darden Restaurants 7,217.5 311
Table 2
Hotel, Casino, and Resort Companies Included in the 2010 Fortune 500
Corporation Revenue Fortune 500 Rank
($ million)
Marriott International 10,908.0 213
Harrah’s Entertainment (aka Caesars 8,907.4 264
Entertainment Corporation as of 11/10)
MGM Mirage 5,978.6 360
Starwood Hotels and Resorts 4,712.0 438
Las Vegas Sands 4,563.1 456
Host Hotels and Resorts 4,216.0 492
5. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 5
A study of lawsuits and statutory violations from 2001 through 2010 for each of
these companies was conducted online through the Wall Street Journal, The New York
Times, and Lexis/Nexis databases. As well, general search terms including the company’s
name, “lawsuit,” and “million” were used. The searches were conducted numerous times
using different search engines to best ensure that the major lawsuits and statutory
violations were captured.
Lawsuits that were both litigated and settled out of court as well as suits which are
under appeal are included. None of these searches revealed any incidences of undisclosed
executive pay, antitrust violations, or patent infringements by any of the ten hospitality
companies included in this study. However, some of these companies were unsuccessful
defendants in lawsuits claiming unjust business enrichment, copyright infringement, and
wrongful death. Each of these lawsuits and their outcomes will be discussed separately.
Accounting, Securities, and Consumer Lawsuits Claiming Fraud
While the hospitality industry has had its share of lawsuits, none were as
monumental as those faced by the financial services and telecommunications industries
during the past decade. In fact, over the past ten years, only five lawsuits filed against
major hospitality firms claiming accounting, securities, or consumer fraud resulted in an
out-of-court settlement or jury award of $2 million or more. The $2 million minimum
threshold, in line with that used in Clement’s study, generally excluded lawsuits which
solely resulted in compensatory-based awards or settlements. meaning that the plaintiff
was awarded back pay, lost benefits, and such. Rather, the $2 million mark most often
6. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 6
included both compensatory and punitive damages, meant to simultaneously make the
plaintiff “whole” while “punishing” the defendant.
When analyzing the lawsuits pertaining to the financial settlement or damages, a
natural break was clearly apparent. Many suits fell into the aforementioned target
categories, but were settled or adjudicated in the $500,000 range. The damages in these
suits were normally compensatory, meaning that the plaintiff was awarded back pay, lost
benefits, and such. The $2 million dollar minimum used in this study captured major
settlements and judgments, many of which carried with them punitive damages in
addition to compensatory damages, hence, the higher settlement or adjudicated amount.
These settlements and awards ranged from $2 million to $12.5 million. The figures,
though, pale in comparison to Clement’s findings of forty-four fraud-related lawsuits
filed against Fortune 100 companies from 2000 to 2005, some of which resulted in
awards or settlements of $1 billion or more (Clement, 2006).
It is worth mentioning though that, early last decade, five major hotel firms
including Marriott and Starwood settled class action lawsuits in which plaintiffs claimed
they were charged undisclosed fees in the form of “energy surcharges.” These suits were
settled out of court, often requiring the hotel company to issue a $10 voucher for a future
stay (Stellin, 2003). Certain food service companies faced similar lawsuits including
Pizza Hut and its parent company, Yum! Brands. The dollar amount of the potential
settlement of these suits, though, was much higher than the actual payout amounts since
not all plaintiffs chose to redeem their vouchers. None of these lawsuits will be included
since the actual dollar amount of these settlements to date has not been determined.
7. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 7
The casino segment has also faced its share of recent lawsuits and these bear
mentioning. A number of investors filed suits against Las Vegas Sands Corporation’s
CEO Sheldon Adelson and Board members in the Nevada state court claiming that
securities fraud and mismanagement were responsible for the huge decline in stock
values, but the suits were dismissed in November 2009 (Green, 2009). Two similar
lawsuits filed in federal court in 2010 have not yet been decided or settled (Green, 2010).
Six separate lawsuits against MGM Mirage claiming securities fraud were recently
granted class action status, but have also not yet been decided or settled (Lowinger v.
MGM Mirage, 2009). Neither of these pending class action suits will be included in the
table below since both are requesting unspecified compensatory damages which cannot
be quantified for the purpose of this study.
The much-publicized class action suit filed by Hindus and vegetarians against
McDonald Corporation’s undisclosed use of beef tallow in the production of their French
fries resulted in the highest settlement or award in this category. The settlement required
McDonald’s to donate $10 million to vegetarian, Hindu and/or Sikh, children’s hunger
relief, and Jewish charitable organizations. As well, they agreed to write a letter of
apology to the affected groups and to establish an advisory board charged with making
dietary recommendations to the corporation ((Block, Sharma, and Singh v. McDonald’s,
2001). In addition, McDonald’s agreed to pay plaintiffs’ attorney fees and to pay $4,000
to each of the eleven plaintiffs.
8. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 8
Table 3
Major Lawsuits Claiming Accounting, Securities, and Consumer Fraud
Company Year Nature of Description Award/Settlement
Misdeed Amount
McDonald’s 2002 Consumer Class action suit filed by $12.5 million
Corporation fraud vegetarians and Hindus settlement
claiming McDonald’s
deliberately misled customers
by failing to disclose the use
of beef tallow in the
production of French fries
(Block, Sharma, and Singh v.
McDonald’s, 2001)
McDonald’s 2005 Consumer Plaintiffs claimed McDonald’s $8.5 million
Corporation fraud did not lower the amount of settlement
trans fat in their cooking oil
after promising that they
would (Fettke v. McDonald’s
Corp., 2003)
Harrah’s 2010 False Class action suit claimed the $8 million jury
Entertainment advertising timing for the use of birthday award
club vouchers was misleading
(Smerling v. Harrah's
Entertainment, Inc., 2006)
McDonald’s 2003 Fraud, Plaintiff, a long-time multiple Initial $16.5 million
Corporation recession of franchisee, claimed she was jury award; $10
a release, wrongfully forced out of the million in punitive
and unfair system (Darling v. damages overturned
business McDonald’s Corp., 2006) on appeal; settled for
practices remainder
Marriott 2003 Antitrust Suit filed by In Town Hotels $2 million
International violation claiming mismanagement, settlement
fraud, overcharging for
services, and commercial
bribery (In Town Limited
Partnership v. Marriott
International, Inc., 2002)
A number of obesity-related lawsuits filed against McDonald’s followed
this settlement and were dismissed on a variety of grounds. Similarly, a number of
lawsuits were filed claiming that McDonald’s French fries contained gluten although
9. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 9
McDonald’s claimed they did not (In re McDonald’s French Fries Litig., 2009). The
gluten-related suits were denied class action status in 2009 due to a district court judge’s
explanation that “individual issues of law clearly predominate over common issues,
making a nationwide class unmanageable”. To date, none of these claims has proceeded
on an individual basis.
The increased public attention to the use of trans fats in cooking led to two other
well-publicized lawsuits filed against McDonald’s and Yum! Brands, the parent company
of KFC. McDonald’s settled their suit, filed by watchdog group BanTransFat.com and
another plaintiff, for $8.5 million in 2006. The American Heart Association received $7
million of the settlement and the remaining $1.5 million was used to fund a public
education initiative about the potential dangers of trans fats (“McDonald’s Settles,”
2005). In 2006, the Center for Science in the Public Interest, another watchdog group,
filed a similar lawsuit against KFC, but the suit was dropped in 2007 when KFC
voluntarily stopped frying their chicken in oil with trans fats (“CSPI Withdraws, 2006).
The third case involved a false advertising and truth-in-advertising class action
suit filed against Harrah’s Entertainment in 2010. Harrah’s gave away $15 vouchers as
part of their customer loyalty program, but unreasonably restricted the hours in which the
vouchers could be redeemed. A jury awarded the 80,000 class action members $100 each
in statutory damages for a total of $8 million (Parry, 2010).
In the fourth case, a long-time franchisee filed suit against McDonald’s
Corporation claiming fraud, recession of a release, and unfair business practices. The
franchisee openly criticized some of McDonald’s policies as they pertained to franchise
requirements, and claimed that she was “forced out of the system.” A jury awarded the
10. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 10
plaintiff $16.5 million of which $10 million was punitive (Edison, 2007). Upon appeal,
the $10 million in punitive damages was overturned and, upon the plaintiff’s death, her
estate settled out of court with McDonald’s for the remainder (Kirkland and Ellis LLP).
The last lawsuit included in Table 3 was filed by In Town Hotels against Marriott
International and claimed mismanagement and overcharging for services. In Town also
challenged Marriott’s vertical ties with Avendra, a procurement services company that is
half-owned by Marriott. The suit was settled in 2003 when Marriott agreed to forego $2
million in fees owed by In Town from the Charleston Marriott Town Center property
(Browning, 2008).
Discrimination Lawsuits
The leading hospitality companies in this study fared well as compared to those in
Clément’s study regarding discrimination-based lawsuits. Since 2008, though, twenty-
eight lawsuits claiming sexual harassment were filed against Harrah’s Atlantic City, part
of Harrah’s Entertainment (Dunn, 2010). The plaintiffs are seeking injunctive relief and
punitive damages. All of these suits are still pending.
Another case worth mentioning was filed in 2002 by celebrity chef Timothy Dean
against the St. Regis Washington Hotel in Washington, D.C. The plaintiff claimed racial
discrimination in that Marriott’s management team tried to force him out of business and
harassed him due to his race (Shiver, 2005). The $50 million lawsuit was settled out of
court for an undisclosed amount.
There were many other relatively high-profile suits filed claiming discrimination
based on race, religion, national origin, gender, and sexual orientation, but in many cases,
11. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 11
they were settled out of court. In suits that went before a jury, the awards were less than
the $2 million threshold of this study.
Undisclosed Executive Pay
While no incidences of undisclosed executive pay per se were revealed, The New
York Times reported that Chairman, Chief Executive, and Treasurer of the Las Vegas
Sands, Sheldon G. Adelson, received $3.6 million in salary and bonuses in 2005 due to
“improper interpretation” of his employment contract. This was almost $1 million more
than he was entitled to had the contract been interpreted correctly (Morgenson, 2006). An
additional $1.8 million was awarded to four other top executives at the Las Vegas Sands
due to the same “misinterpretation.” The Compensation Committee of the Sands admitted
the error, but let all five executives keep the excess bonus payments based on “the
outstanding performance of the company in 2005.”
Other Notable Lawsuits
The two lawsuits listed in Table 4 were included since each has a direct bearing
on CSR as it pertains to both law and ethics. The settlement or award in each case was
above the $2 million threshold as well, and involved intellectual property rights and
unjust enrichment claims.
12. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 12
Table 4
Other Lawsuits
Company Year Nature of Description Award/Settlement
Misdeed Amount
Las Vegas 2009 Unjust Suit filed by three individuals $42.5 million
Sands business who claimed they were key in settlement
enrichment helping the Las Vegas Sands
secure a gambling license in
Macau (Stutz, 2009)
Yum! 2001 Breach of Plaintiffs filed suit claiming $41.9 million upheld
Brands implied that Taco Bell modeled its on appeal
contract and popular icon after their
copyright “Psycho Chihuahua” cartoon
infringement character (Wrench LLC v.
Taco Bell Corp., 1999)
The first lawsuit was filed by three individuals who claimed that they were
integral in assisting the Las Vegas Sands to obtain a Macau gambling license. Such
licenses are notoriously difficult to acquire. In 2009, the Las Vegas Sands paid $42.5
million to settle the suit. The Sands still faces a possible new trial in a suit filed by
another individual who also claimed he assisted in the Sand’s acquisition of the gambling
license. The plaintiff in this case is seeking $58.6 million in damages. A lower court in
Nevada initially ruled in favor of the plaintiff, but was overturned by the state‘s supreme
court which ruled that “a district judge shouldn’t have admitted a hearsay statement
during the trial: (O’Keefe, 2010). Since this ruling was procedural rather than
substantive, it is likely that the suit will be refiled.
The second suit was highly publicized and involved the creative ownership of a
talking Chihuahua that catapulted the brand image of Taco Bell. Two plaintiffs asserted
copyright infringement and breach of contract. They claimed to have developed the
"Psycho Chihuahua" cartoon character which was then transformed by Taco Bell into the
13. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 13
live Chihuahua which became a national icon. The five-year court battle ended in a $41.9
million verdict for the plaintiffs.
Discussion and Further Research
This study was not designed to be exhaustive and in many ways is limited. The
number of lawsuits filed against these hospitality companies regarding a key area of CSR
was far fewer and the settlements and jury awards were markedly less than those
identified in Clement’s study. However, the sample size is only one-tenth of the size of
Clement’s sample and the number of lawsuits resulting in awards exceeding $2 million is
small. Nevertheless, the results seem to indicate that using qualified lawsuits as one
indicator of CSR is a useful measurement tool because it objectively ferrets out the most
egregious examples of disregard for ethical and legal principles. As well, the study
establishes the effectiveness of its methodology in identifying significant awards.
A more conclusive examination of the ethical and legal profile of the hospitality
industry would require a significantly broader study. Such a study should expand the
definition of the industry, perhaps including segments such as airlines and entertainment,
as well as extending the scope of the examination to the Fortune 1000 instead of the
Fortune 500. It might also be revealing if certain industry segments could be identified as
experiencing higher rates of litigation pertaining to CSR. An investigation of actions
initiated by the Securities and Exchange Commission could also be included. Finally,
loosening some of the qualifying parameters, such as the amount of awards or
settlements, might cast a wider net and permit more detailed study of the types of firms
involved.
14. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 14
REFERENCES
Block, Sharma, Singh et. al. v. McDonald’s, No. 01CH9137 (Cir. Ct. of Cook County, Ill.
June 6, 2001).
Browning, L. (2008, July 28). Marriott and owner of hotel settle lawsuit. The New York
Times, p. C4.
Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral
management of organizational stakeholders. Business Horizons, 34(4), 39-48.
Clement, R. W. (2006). Just how unethical is American business? Business Horizons,
49(4), 313-327.
CSPI withdraws from lawsuit after KFC cuts trans fat. (2006, October 30). Retrieved
from: http://www.cspinet.org/new/200610301.html
Darling v. McDonald’s Corp., WL 164986 (Cal. Ct. Spp. Jan. 24, 2006) (unpublished).
Dunn, M. (2010, April 28). Bridgeton attorney brings four new lawsuits against Harrah’s.
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every eight seconds but dangers lurk - Apparently especially for McDonald's
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release.asp?ID=12002
Fettke v. McDonald’s Corp., Case No. 044109 (Cal. Sup. Ct. 2003). See also
BanTransFat.com v. McDonald’s Corp., Case No. 034828 (Cal. Sup. Ct. 2003).
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drop. Las Vegas Sun. Retrieved from
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las-vegas-sands-stoc/
Green, S. (2010, July 22). Shareholders file another lawsuit against Las Vegas Sands
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against-las-vega/
15. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 15
Holcomb, J. L., Upchurch, R. S., & Okumus, F. (2007). Corporate social responsibility:
What are top hotel companies reporting? International Journal of Contemporary
Hospitality Management, 9(6), 461-475.
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In Town Limited Partnership v. Marriott International, Inc., No. 2:02-0481 (S.D.W.V.
filed May 23, 2002).
Kirkland & Ellis LLP, Lawyer Search: Jonathan C. Bunge, P.C. – Partner. (n.d.)
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http://www.kirkland.com/sitecontent.cfm?contentID=220&itemID=8099
Lowinger v. MGM Mirage, et al. Filed August 19, 2009. Case No. 2:09-cv-01558-RCL-
LRL, U.S. District Court for the District of Nevada. Khachatur Hovhannisyan v.
MGM Mirage, et al. Filed October 19, 2009. Case No. 2:09-cv-02011-LRH-RJJ,
U.S. District Court for the District of Nevada. On November 4, 2009, the Court
entered an Order consolidating for all purposes the Lowinger and Hovhannisyan
actions before the Honorable Robert C. Jones, with such consolidated actions
captioned as “In re MGM Mirage Securities Litigation.”
Marriott International loses $11 million verdict in wrongful death case. (2002, July 25).
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from http://www.nytimes.com/2005/02/12/business/12food.html
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Morgenson, G. (2006, May 31). Big bonuses still flow, even if bosses miss goals.
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Wall Street Journal. Retrieved from
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6.html
Parry, W. (2010, September 29). Harrah's casinos ordered to pay $8 million for
misleading ads. Las Vegas Review-Journal. Retrieved from
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misleading-ads-103913854.html
16. Dallas / ASSESSING CORPORATE SOCIAL RESPONSIBILITY 16
Shiver, H. (2005, March 2). New chapter in his story: Chef opens restaurant.” The
Baltimore Sun. Retrieved from http://articles.baltimoresun.com/2005-03-
02/news/0503010145_1_timothy-dean-jean-louis-chef/2
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Stellin, S. (2003, July 13). Hotel bills with add-ons galore. The New York Times.
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0A25754C0A9659C8B63
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loss. Law Vegas Review-Journal. Retrieved from
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Wrench LLC v. Taco Bell Corp., 51 F. Supp. 2d 840 (W.D. Mich. 1999).
Submitted January 4, 2012
First Revision Submitted April 10, 2012
Accepted June 3, 2012
Refereed Anonymously
Melissa Dallas, J.D. (melissadallas@missouristate.edu) is a professor in the Hospitality
and Restaurant Administration Department in the College of Natural and Applied
Sciences at Missouri State University.