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Room Service

From California Law Business Room Service – Los Angeles' Ballard Rosenberg, which caters to the legal needs of hospitality manage****ment, is facing a tough challenge in the Loews Hotel labor dispute. Room-Service-Article A few years ago, a magazine, conducted a poll of corporate lawyers, soliciting their opinions of various law firms. The poll was welcome news to attorneys at Los Angeles' Ballard Rosenberg Golper & Savitt, LLP. “They listed us as one of the most underrated firms in the U.S.,” partner John Golper recalls. “They couldn’t understand how they got the results they did with the rates we charge. That was probably one of the nicest compliments we could get.” Golper and his colleagues like to boast that their 32-attorney labor law boutique can deliver high-quality and effective legal services at far lower rates than larger, white-shoe firms. The Universal City-based firm represents management in labor law disputes, with special emphasis on the hospitality industry. Starwood Hotels & Resorts Worldwide Inc., a chain of 650 Sheraton, Westin and other hotels, the New York City Hotel Association and Loews Santa Monica Beach Hotel are among the firm’s hospitality clients. Clients in other industries include Lockheed Martin Corp., the Boeing Co., Consolidated Freightways Corp. and Anheuser-Busch Inc. The firm’s client roster and personnel recently underwent a significant expansion. On July 1, Linda Miller Savitt and 11 other lawyers from Sherman Oaks-based Rushfeldt, Shelly & Drake joined the 20 attorneys at Ballard Rosenberg. Savitt, a veteran medical malpractice and labor litigator, is best known for her victory in Fisher v. San Pedro Peninsula Hosp., 214 Cal.App.3d 590 (1989), a landmark sexual harassment case in which the California Court of Appeal delineated the definition of a “hostile work environment.” Despite her success in this and other labor cases, Savitt says she found her litigation practice limiting because it “didn’t have the depth of advisory work” her clients required. She teamed with Ballard Rosenberg to enable her clients to obtain counseling and training aimed at preventing litigation. The merger also has been beneficial for Ballard Rosenberg’s attorneys, several of whom had worked with Savitt on past cases. “We were searching for a person of substance who can add practice skills and a substantial client practice,” partner Richard Rosenberg says. “Linda brings to us her additional skills as a litigator.” She also brings an impressive client list that includes Catholic Health-care West, Cedars-Sinai Medical Center, Foundation Health, Homebase, Wal-Mart, the City of Los Angeles and the Los Angeles Unified School District. Ballard Rosenberg was established in 1986 by Rosenberg and Ken Ballard, an expert in labor law relating to the hospitality industry. The two had been partners in the Los Angeles office of Jackson Lewis Schnitzler & Krupman. Golper, a partner with Parker Milliken Clark O’Hara & Samuelian, joined the new firm a month after its founding. Founders aimed to provided a cost-effective alternative to traditional labor practices. “We saw a lot of waste and inefficiency in the way the big firms did their practice,” Rosenberg says. They also saw a lot of negative attitudes which they believed were detrimental to the best interests of their clients. According to Rosenberg, “Some firms in town are set at a disadvantage because they have such a uniform anti-union stance” and a hostile approach to dealing with the National Labor Relations Board. This mind-set, he adds, does not provide the flexibility and creativity that attorneys need to craft the best resolution for employers confronting labor issues. He maintains his firm is an exception to the rule. “We have developed a strong reputation with government and unions,” Rosenberg says. “They respect us and are willing to negotiate with us.” Ballard says the firm’s representation of hotels during negotiations with labor unions illustrates its inventive approach to labor law practice. “I was the first one to negotiate wage supplements [or bonuses] instead of annual wage increases,” says Ballard about a contractual clause he negotiated on behalf of a hotel in 1983. Traditionally, annual wage increases are provided to all employees at a uniform level according to a predetermined formula based upon the cost of living. But wage supplements, or bonuses, can be determined by employers, with larger bonuses awarded employees whose work is deemed to be of a higher quality. Wage supplements, Rosenberg says, cost about half as much as annual wage increases, and give employers the “operational flexibility for management and better quality.” “It’s surprising,” he adds, “but if you can put in an incentive to employees, you can make them [wage supplements and service standards] attractive to employees who want them. “If you can figure out what various constituents you would like to achieve, you can get unions to agree to things they normally wold fight. We try to come up with options, not take the same uniform approach” Rosenberg says. On behalf of the New York City Hotel Association, Ballard recently helped negotiate a five-year extension of a new union contract a year before the existing pact expired. He says it’s “unprecedented” to approve a contract at such an early stage in negotiations. The firm is facing tougher challenges in representing the management of Loews Santa Monica Beach Hotel. The seaside resort is embroiled in a bitter and highly publicized battle with the Hotel Employees and Restaurant Employees Union, which is seeking to organize 300 hotel workers. The union and employees are calling for a “card check” election, in which the workers would sign cards supporting or opposing union formation. However, hotel managers maintain that employees should vote on union representation in a formal election supervised by the National Labor Relations Board. The unionization campaign has political implications because Loews Hotels Chief Executive Jonathan Tisch is a major Democratic fund raiser and a friend and donor to presidential nominee Al Gore. Ballard Rosenberg provides three general types of services to its clients: advice, training and litigation. Advice, or “preventative labor and employee relations,” as some partners call it, includes counseling to help employers comply with labor statutes, handle discipline, termination and demotion, prepare contracts, employee manuals and other documents, and operate pension plans and drug testing programs. Attorneys also conduct in-house seminars and briefings to provide employers with up-to-date information about labor law and policy. “We do intensive work in-house with clients to teach them about sexual harassment, termination, leaves of absence and other obligations under employment law,” Rosenberg says. “We provide this advice to line management, the people who are working with the employees and who are most apt to make mistakes.” The firm also touts its success in the courtroom, boasting that its lawyers have won six published appellate opinions favorable to employers within the last five years. The best known of the six is Turner v. Anheuser-Busch Inc, 7 Cal.4th 1238 (1994), in which Golper represented Anheuser-Busch before the California Supreme Court. The Supreme Court ruling in Turner established a new definition of ‘constructive discharge” that was favorable to employers against workers who quit and sue, claiming they were forced to quit because of adverse working conditions. Under the new definition, employees must establish that working conditions were so onerous that they were compelled to quit, and that quitting was not just a rational alternative under the circumstances. The firm won another victory on behalf of its client, Consolidated Freightways, in Davis v. Consolidated Freightways, 29 Cal.App.4th 354 (1994). The California Court of Appeal determined that employers who follow progressive discipline policies do not relinquish the right to terminate employment at will. In January, Ballard Rosenberg formed a strategic alliance with Goldman, Magdalin & Krikes, a workers’ compensation defense firm with offices in Los Angeles, Ventura and San Diego counties. Rosenberg said the alliance will enable his firm’s clients to obtain workers' compensation defense services from Goldman Magdalin, while receiving Goldman Magdalin’s client referrals for other legal services. He expects his firm will continue to broaden its labor law services in the immediate future. “Some areas are naturals for growth,” he says, citing disputes over trade secrets and noncompete contract clauses, physicians' hospital privileges, employees retirement benefits, and employers' right to hire immigrants to perform professional-level duties, as examples. Ballard Rosenberg, he adds, also will create some Web-based tools to help clients conduct labor relations audits and become better informed about pertinent aspects of labor law. “We are partnering with our clients,” he says. “We take out the legalese, unless we’re talking to the general counsel, and try to provide education to our clients.” California Law Business - September 18, 2000 228385.1