Cornell Roundtables Address Employment Law, Service Innovation, and Brand Management

May 25, 2011

Contact:  Jane Henion, 607.255.9780,

Cornell Roundtables Address Employment Law, Service Innovation, and Brand Management

Ithaca, NY, May 25, 2011 – The spring 2011 series of roundtables produced by the Cornell Center for Hospitality Research (CHR) examined the latest wrinkles in human-resources related law and introduced new examinations of service innovations and brand management. The Labor and Employment Law Roundtable was organized by Associate Professor David Sherwyn, who devised the formula for the original CHR roundtables. The service innovation roundtable was organized by Cathy Enz, the Lewis G. Schaeneman, Jr. Professor of Innovation and Dynamic Management, and Associate Professor Chekitan Dev was the "instigator" of the brand management roundtable. All roundtables were held at the School of Hotel Administration, with CHR partners and invited guests having a seat at the table.

Labor and Employment Law
The tenth annual Labor and Employment Law Roundtable, sponsored by the Cornell ILR and Law schools,  first discussed a hot topic involving social media. The National Labor Relations Board (NLRB) ruled regarding Facebook, determining that Facebook communications are protected under what we used to think of as union law. In a case where an employee was dismissed for posting comments about her company on Facebook, the NLRB announced in April 2011 that a settlement was reached, and the board's position is that employees may use social networking sites to comment on working conditions.

An analysis of union–management relationships in the hotel industry, presented by David Rothfeld, partner, Kane Kessler, and Jim Zuehl, partner, Franczek Radelet, pointed to the numerous provisions that impede efficient operations. For example, Zuehl discussed a current arbitration where the union is trying to prevent hotels from buying machine cut vegetables, which are cut to exact size and thus perform more consistently in recipes, on the grounds that purchasing the vegetables violates a subcontracting clause. A key question is whether the unions and management could work together to eliminate employment statutes that neither the employers nor the employees desire. The sentiment is that in the current environment this will not occur.

Of great interest is the status of class actions generally and the Dukes v. Wal-Mart case specifically. In this litigation, the Supreme Court will determine whether all Wal-Mart employees can be considered a class. Michael Heise, professor at the Cornell Law School, set up the issue and then Cornell Professor Dawn Chutkow laid out the issues of what is necessary for a class to be certified under Rule 23, which is the number of the applicable rule. Chutkow and Joe Baumgarten, partner, Proskauer, analyzed the issues that the Court will likely consider. Baumgarten further focused on the oral arguments and the Justices' questions. He believes that Justice Kennedy, the so-called swing vote, seems skeptical that Wal-Mart can have a national policy of discrimination that is carried out by giving local managers discretion.

The roundtable also addressed the growing cause of retaliation, and the Thompson case. Gregg Gilman, partner and co-chair, labor and employment, Davis and Gilbert, and Ilene Berman, chair of the labor department at Taylor English Duma, set forth the question of who is now protected. In Thompson, a woman complained of sexual harassment and the company terminated her fiancé. The panel questioned whether boyfriends, girlfriends, siblings, roommates, or lunch buddies are protected. The law is developing and is unclear.

Finally, Carolyn Richmond, partner, Fox Rothschild, and Paul Wagner, shareholder, Stokes, Roberts, and Wagner, discussed the wage and hour nightmare in which plaintiffs' lawyers are going to states without specific laws and making common-law wage and hour claims. The issue of service charges is hot, as some courts have held that service charges can only be kept by the house if the client is aware that this is the case. Thus, companies are now putting long language in their contracts and even on restaurant checks to explain.

Brand Management
The goal of the first Cornell Hospitality Brand Management Roundtable, organized by Chekitan Dev and sponsored by Hilton Worldwide, was to significantly, permanently, and positively affect the management of hospitality brands. To that end, Dev invited eleven "provocateurs" to make presentations designed to stimulate discussion on key brand management issues, and an additional two dozen brand leaders, consultants, and professors to participate in the day-long event. With a focus on hospitality brands, the provocateurs examined the elements of a global brand, analyzed the pillars of brand growth, and explained the value of amenities to brand identity. A particularly interesting idea involved the question of which brands add the most value to a hotel reflagging, taking into account the fact that without a brand the deal probably would not be done at all. The challenges of reorganizing a company to support brand extensions were depicted in the case of the Taj Group of brands, along with the issues involved in when and how to use co-branding in the lodging industry. Design as a key element of branding was explored, with examples of how careful design touches can set a brand apart from its competitors. The roundtable also included a critical element that is not always part of the brand development discussion but needs to be, legal issues.

Key themes that emerged across all presentations included paying attention to global trends, benchmarking against the best brands, making decisions about brand standards (amenities) based on scientific research, focusing on driving brand value for all stakeholders, rethinking metrics for brand performance, creating logical and sustainable brand architecture, protecting brand rights, and focusing on brand elements that drive guest and associate engagement. The roundtable provided participants an opportunity to showcase their thought leadership, offer insights, and learn from some spirited and informative discussions.

Service Innovation
The Service Innovation Roundtable began by highlighting the importance of developing an innovative culture and encouraging innovators. Roundtable participants listed their service innovation areas from the past two years, including altering the guest experience, developing a culture of being green, energy saving "courses" for customers, building art into the hotel environment, capturing and utilizing customer data from social networks, building a common culture for a franchise company, developing revenue management analytics, and removing red tape in employee training to focus directly on guest preferences.

To demonstrate how to create new ideas and move the process forward, a presentation by Cecilia Lewis and Matthew von Ertfelda, of Marriott International, described an innovative process of rethinking the lobby space, with food service and menus that are programmed around the speed of the meal. Customers were brought in to the process to test assumptions and focus the concept by gaining customer insights. The result was increases in RevPAR premiums, guest satisfaction, and 1,600 additional food-service covers. Doug Larson of Southwest Airlines explained how analysis and forecasting through customer behavior simulations helps to model and understand customer behavior.

Above all, the critical point in innovation is gathering data and then using it correctly. In particular, given the information available on social media, the issue becomes how to filter out unneeded information and interpret the rest. The roundtable concluded with a discussion of how to diffuse innovation using the Hospitality Change Simulation as a shared experience for participants to experience the challenges of introducing change.

About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center's 82 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly. To learn more about the center and its projects, visit

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