Law review: Legal issues affect concession operations


Recent news headlines are creating legal concerns at the concession stand. More attention has been paid to this area of our operations over the past year, as evidenced by the tradeshow seminars tackling the subject. The National Association of Concessionaires devoted its seminar at CinemaCon to legal issues and also had a second panel addressing the topic at its annual convention. ShowSouth also offered a seminar by Reynolds & Reynolds on the effects of the new healthcare law on the cinema industry. Let’s review a couple of these issues and where they currently stand.

The biggest news of late on drink size restrictions in New York City is that they were struck down again. On July 30, the First Division of the New York State Supreme Court's Appellate Division upheld the first ruling against the ban, saying the proposed law was unconstitutional. In March of this year, New York Supreme Court Judge Milton Tingling had ruled that New York City could not enforce the ban. His decision came a day before the ban was set to be enforced. Tingling called it arbitrary, capricious and beyond the city's regulatory powers.

"Like the Supreme Court, we conclude that in promulgating this regulation, the Board of Health failed to act within the bounds of its lawfully delegated authority,” Appellate judges wrote in a unanimous decision. Remember, it was the appointed, not elected, Board of Health who wrote the ban in the first place. Still, while two courts may have struck down the ban, New York City Mayor Michael Bloomberg vowed to continue to appeal.

"Today's Appellate Division decision is a temporary setback, and we plan to appeal as we continue the fight against the obesity epidemic,'' was the statement issued by Bloomberg’s office. The American Beverage Association, which fought the drink ban, was thrilled. They issued the following statement: "We are pleased that the lower court's decision was upheld. With this ruling behind us, we look forward to collaborating with city leaders on solutions that will have a meaningful and lasting impact on the people of New York City."

This saga is most likely not over, as Bloomberg refuses to concede. But he will not be Mayor too much longer and the court system is proving effective at demanding a true legislative process to take place, and not just a decree from the city’s Health Department. However, food issues in general will continue to persist far beyond beverages. For example, packaged candy companies are all faced with putting calorie counts on the front of the package, which you can now see everywhere. The push for legislative action to combat obesity continues.

Our industry is also not buffered in any way from the healthcare law that will soon be taking effect, commonly referred to as Obamacare. This issue dwarfs the drink issue for the industry as a whole, in that it affects how we all offer and administer healthcare insurance to all our employees. The food and beverage offerings in the cinema command the greatest need for employees in the theatre business. In order to avoid the biggest effect of the new healthcare law, the employer mandate to provide health insurance to full-time employees once a firm surpasses 50 employees, companies will be facing greater pressure to keep part-time employees the normal standard. This is often the case with concession stand workers, but with the expanded menus that are driving cafés, bars and restaurants in the cinema complex, more full-time employees are needed.

There is not a company in America that is not dissecting the healthcare law and positioning their response to the changing rules within it. So you have to stay on top of it! In June, the White House announced it was delaying for one year the aforementioned employer mandate, the major provision that requires companies with over 50 full-time employees to provide health insurance or pay a penalty. The government exchanges, the penalties, and the actions that companies must take now have a little more time to solidify. A plan of action will be required.

NAC, the National Association of Theatre Owners, the American Beverage Association and other organizations in our industry are striving to stay on top of these issues and deliver a voice to Washington. They are working with representatives from industry operators and with one another to bring collective activism to Washington to represent our needs. It has never been more important to be a part of the organizations that serve our industry, as the legislation that affects our business is coming from all sides. Go online to any of these organizations, get involved with your local NATO chapter, and get to know your supply partners who belong to large organizations who are fighting along with you. Participating in the process is optional, but compliance with laws is not.

E-mail your comments to