News Feature | December 28, 2016

Restaurant And Hospitality News – December 26, 2016

Christine Kern

By Christine Kern, contributing writer


In news this week, the Department of Labor has filed an appeal of the overtime rule injunction and asked for the process to be expedited; and more restaurants are turning to customer data to help their marketing strategies be more successful.

Appeal of Overtime Rule Injunction Moves Forward

The U.S. Department of Labor has proceeded with its appeal of the overtime rule injunction, defending the use of salary to determine overtime exemption, according to The Nation’s Restaurant News. Last month, Federal District Judge Amos L. Mazzant III of the Eastern District of Texas issued a nationwide injunction against the expansion of the new overtime regulations created by the Obama administration, according to the New York Times. The change was scheduled to take effect on December 1, and raised the salary threshold for overtime from $47,476 to $23,660. It impacts approximately 4.2 million workers nationwide, USA Today reported.

According to the U.S. Department of Labor, the Department of Justice filed a notice on behalf of the Department of Labor to appeal the preliminary injunction, and they have moved to expedite the appeal. In the brief Thursday, the Justice Department defended the reliance on salary as the “best single test” of overtime eligibility, in addition to duties, arguing that both have been the basis of determining exemption since the Fair Labor Standards Act, or FLSA, was enacted more than 75 years ago.

“The injunction rests on an error of law and should be reversed,” the brief said. “The district court did not offer any persuasive basis to overturn the approach that has been used for the past 75 years by the agency charged with implementing the FLSA.”

The DOL states, “The Department strongly disagrees with the decision by the court. The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule.”

The appeals process could take months, according to legal experts, and a decision could ultimately be challenged, Fortune reported.  President-elect Donald Trump has tapped Andy Puzder, CEO of the parent to Carl’s Jr. and Hardee’s brands, as his new Labor Secretary, who is a vocal critic of the overtime rules change, making administrative support of the new legislation unlikely. NRN reported that, in light of this reality, the Texas AFL-CIO has attempted to join the effort to lift the injunction, with the hope of carrying on under the new administration.

“Depending on what happens at the Fifth Circuit, more uncertainty is possible if either side appeals the decision to the Supreme Court,” William Tarnow II, chair of the labor and employment practice group at Neal Gerber & Eisenberg in Chicago told Fortune.

The uncertainty regarding the implementation of the new rules, which stand to have a tremendous impact on the restaurant and hospitality industry, has caused a great deal of confusion and anxiety, as owners remain unsure about how to proceed.

Customer Data Plays A Key Role In How Restaurants Respond To Marketing Challenges

Guest data plays a central role in the way restaurants respond to marketing challenges, according to new research from Winterberry Group, including increased competition, declining guest loyalty, and measuring the overall effectiveness of marketing campaigns.  The study polled more than 200 restaurant brands and found that 87.3 percent of marketers agreed that restaurants benefit by collecting and studying guest data.

The study also found that progressive marketers transcend basic demographics and email data to include customer preferences, attitudes, lifestyles, buying patterns, and other behavior instincts that increase customer engagement. Many marketers also rely on geographic market, data range, and individual store performance data to measure success, in addition to responsiveness data on offers, redemption information, and mobile engagement.

“Actionable data insights continue to emerge as the real trade secret to success sin almost every service-oriented market, and the restaurant industry is no exception,” explained Fishbowl CEO Dev Ganesan. “Being able to make informed, data-driven decisions and engage guests with a high degree of certainty and minimal amount of risk is an absolute must for our clients. This report underscores that requirement by demonstrating the results a data-driven approach delivers to brands that have made it an integral part of their businesses.”

"Data insights enable companies to be more nimble and adept in responding to challenges and changing trends and empower them to rise above competition," Winterberry Group Managing Director Jonathan Margulies, said in a news release. "Understanding and embracing the shifts currently underway in the restaurant industry from the marketers' perspective can have monumental impacts on the future of any brand."