Liabilities to consider when managing a nightclub

When it comes to running a nightclub, one would have to consider many things. Since a nightclub is prone to lawsuits, liabilities are often the biggest concerns. As an aspiring nightclub owner, I felt that it was my duty to discover some of the liabilities that are impacting the nightclub industry today. For this blog post, I will share with you 3 podcasts that I believe is helpful for anyone in the nightclub/bar industry and I will also discuss about how I plan to utilize what I learned in these podcasts with my business plan.

Nightclub Security Consultants – Episodes 2-3

This podcast was based on a discussion between Robert C. Smith, a nightclub industry expert, and Manny Marquez, the host of the Nightclub Security Consultants podcast, about the nightclub industry and how one could protect his/her nightclub business from a civil lawsuit. An example that was given in the podcast was about a woman who slipped on a lime wedge and sued the bar 2 years after the incident occurred. Although the decision of the case was not discussed, the bar owner was unable to make a viable argument, as there was no proof that corrective actions were made. Since so much could happen in a 2-year span, the bar was unable to recall the incident in full detail, which gave the plaintiff an advantage in the lawsuit. 

As seen in the example above, the bar was prone to a civil lawsuit the moment the woman slipped. Even if the possibility of a lawsuit is unlikely, taking corrective actions after an incident occurs is a good practice. As an aspiring nightclub owner, I must be adamant about documenting all incidents in great detail and gather important information, such as the victim’s name and the video footage of the incident.  By documenting an incident, this would show proof to the court that I am aware of what happened and that my business did everything accordingly to assist the woman as needed. Even if I was fighting a losing battle, showing proof of taking corrective actions through a thorough documentation could limit the dollar amount that is requested by the defendant.

However, I feel like the best way to handle a case like this is to make sure that it never occurs at all. I plan to do this by investing in training programs to educate my employees on how to work responsibly. By giving them the proper tools, they should become more than capable to uphold a high standard in which I hope for my business to achieve. I also understand that my display of great leadership would be crucial for upholding my business standards. If I manage my business with malpractice, my actions will only reflect on my employees, making my business even more vulnerable to liabilities.

Nightclub Security Consultants – Managing a Major Violent Incident

This podcast was based on a discussion about different procedures one should follow in order to manage a major violent event that occurs in a bar/nightclub venue. According to Robert, the industry expert in this podcast discussion, a major violent event is usually something serious and substantial that requires the involvement of the police. It can be as shocking as a shooting or as horrifying as a bombing. After reviewing this podcast, here are some things that I found to be useful for my business plan.

As obvious as it may sound, I will always make sure that an employee from the venue calls 911. Many times, it is usually a guest that would make the emergency call. However, a call from an employee at the venue is crucial for the appearance of my business. As discussed in this podcast, if an employee from the venue fails to make an effort to contact emergency services in a timely manner, the business could appear to be responsible for any consequential damages in court. Of course, this is assuming that the business lacks preparation for responding to serious incidents. As a business owner, I will need to make sure that my employees are trained to make that crucial call, even if it appears to have already been taken care of.

Another concern that I will have as a nightclub owner is to make sure that all exits are clear and well lit. This will help reduce congestion and provide better safety for my customers in case of an emergency. I will also need to invest in modern surveillance cameras to capture and replay incidents that occur. The recorded footage would not only protect my business in a litigation, but it would also help the authorities capture the suspect and prevent any future harm.

If a major violent event resulted in bloodshed or death in my nightclub, I understand that certain procedures should be followed in order to assist with the investigation. First, I will shut down the business for the night. Second, I will make sure to block access to the site of the incident until the proper authorities arrive. Lastly, I would wait for the consent of the highest person in charge of the scene before I begin to pursue with any proper maintenance of the venue.

Entertainment Law Update – Episode 33

(This podcast provides a discussion on several newsworthy topics that occurred in the entertainment industry. In this particular episode, issues dealing with infringement, privacy rights, and personal damages were covered.)

One topic that was discussed in this podcast was about a gay couple whose photo was used in an attack advertisement against Colorado legislatures. Since the photo was copyrighted, the infringers argued that it was fair use, as they were not profiting from the photo and were only using it in the form of “political speech.” As the discussion went on, it was clear that the issue was not about the copyright, but it was about the association that was made to the photo without the consent of the owner. As a result, the gay couple is planning to hire a lawyer to settle the case.

Although this appears to have no relevancy to the nightclub industry, this does bring up a concern. What if someone comes into my venue to take pictures of an artist who is performing a live show when the artist requests that no photos are to be taken? Since this issue is different in every case, careful planning with the act’s manager would be crucial for the preparation of the show. As a nightclub owner, I will have to learn how to balance the interests of the act with the interests of the audience.

Another topic was discussed in this podcast was about a woman from Oregon who is suing Justin Bieber for $9 million, claiming that his concert was the cause of her hearing loss. During one of his acts, Justin Bieber pointed into the direction of the crowd, causing an uproar of excitement that exceeded above an average noise level for an enclosed venue. According to the plaintiff, the wave of noise struck both of her ears and damaged her hearing.

In the nightclub industry, playing music at a high volume is essential for transmitting the energy from the speakers to the customers. Not only is the sound of the music enjoyable for the customers, but being able to feel the music is part of the excitement of being in a nightclub. However, I still must be concerned about the volume in which the music is played. To help protect my nightclub from any liabilities dealing with hearing loss, I will hire a professional to measure the sound pressure levels during sound checks in order to make sure that the volume of the music being played is within reasonable parameters.

Legal Controversies in the Nightclub Industry

As some of us may know, the nightclub industry is prone to lawsuits, so it is important to practice legally in order to protect the longevity and image of the business. Since I am creating a business plan for a nightclub in New Orleans, I must always remind myself of the issues that could arise and educate myself to help prevent such issues. This requires a lot of research and a basic understanding of the legal language. For today’s blog, I want to share with you my findings on 3 different legal cases that are impacting the nightclub industry and provide my personal opinion on how one could protect his/her business from too much trouble in each case.

Copyright Issues

Copyright issues can occur in a “nightclub or live venue, onthe radio, on television, in commercial establishments, elevators or anywhereelse where music is publicly heard.” It is sometimes overlooked in the nightclub industry, as people may be unaware of the options that are available to them. For this particular case, we will look at how easy it was for this issue to occur at the Crocodile Rock Café in Pennsylvania.

According to an article on The Morning Call, BMI filed a lawsuit against The Crocodile Rock for playing music without a license. Joe Clark, owner of The Crocodile Rock, stated that there must be a “misunderstanding with the music licensing agency,” as his concert promoter have been paying BMI regularly. Unfortunately, these payments were only made to cover the promoter’s obligations and had nothing to do with the club itself. As a result BMI is suing for $30,000 in damages.

So what is the lesson learned here? Copyright issues are very sensitive. It should be in your best interest to discover the options that are available to you as a nightclub owner to prevent any copyright infringement. A great option is to purchase a blanket license from ASCAP, as it gives you permission to perform millions of songs that are already protected by the agency. This way, you will not only have access to the latest hits, but also the permission to play them in your venue.

Hostile Work Environment

A hostile work environment creates issues that are more common than one may think. In the nightclub industry, this can easily occur when one becomes a victim of sexual harassment, when one is under the negative influences of their peers, or even when one becomes a victim of battery and assault. To give an example, let’s analyze a lawsuit that occurred between a VIP server and Light Group, a grand nightclub operator in Las Vegas.

According to the plaintiff (server), the management at Light Group’s Jet Nightclub pressured her and other women servers to dress in sexy outfits, to use drugs, and to sleep with the VIPs in order to earn a more promising work shift. Because of this, the women were victims to sexual harassment and those who were unable to fulfill their duties were wrongfully discharged. The plaintiff also blamed the nightclub for her drug overdose, in which she received little help from the establishment. As a result, she sued the Light Group for punitive damages and the nightclub no longer exist as is.

As seen in this case, creating a hostile environment is never a safe practice, even if it brings in the highest dollars. If something were to go wrong, your liabilities would be great, especially if it involves someone’s life. One may argue that drug, sex, and alcohol are beyond our control, as it is part of many people’s nightlife enjoyment. However, I believe that some level of control could be maintained if the venue discouraged unsafe acts.

It is also important to never neglect an employee’s emotional and physical distress. As a nightclub owner, it should be in your best interest to protect and support your employees at all costs. Taking remedial action the moment an incident occurs is the best way to do this. This would not only protect the image of your business, but also the longevity of your company.

Dram Shop Rule

The Dram Shop Rule is a state law that puts a liability on establishments that sell liquor to intoxicated individuals who become injured as a result of too much alcohol consumption. Although this applies to 38 states, awareness of this law is essential when you are establishing a nightclub in an unfamiliar area. Let’s take a look at a recent case where this law was put into effect.

Club Volcano is a strip club in Birmingham, Alabama that contains a full bar, featured dancers, and a full dinner menu. According to an article on Alabama.com, an intoxicated off-duty officer had left Club Volcano and found himself in a car accident that resulted in the death of a minister. Since the Dram Shop Rule is practiced in the state of Alabama, both the officer and the club were sued for being the cause of the minister’s death. As a result, a total of over $40 million was paid in damages.

As important as it is to maintain a safe work environment, it is equally as important to make sure that your employees get the proper training to handle situations that could happen at any moment. Assuming that the officer is a regular to the venue, it is possible that the bartender’s natural reaction is to sell the officer a drink. Because of his unawareness of the harm that was about to take place, this resulted in a lawsuit that fell almost entirely on the club. Although this is something that is difficult to control, there are options that could help prevent such acts from occurring. Invest in services such as the Hospitality Insurance Agency that would help protect your nightclub from the Dram Shop Rule by educating and training your bartenders to become more responsible.