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Businesses must consider liability possibilities

Illegal catering remains thorny issue for companies

Illegal catering remains a chief concern among professional restaurateurs and caterers statewide, who say the powers-that-be are stymieing efforts to thwart major events being staged by illegal operators.

“It has always been a critical issue,” said Mike Cashion, executive director of the Mississippi Hospitality and Restaurant Association (MHRA). “The House of Representatives is stonewalling enforcement and the Health Department is slow to act. The law is clearly defined, yet unlicensed operators continue to proliferate. The real story is why? Barbers and beauty salons are regulated, funeral directors are regulated, and yet businesses that have can have a direct effect on public health can have a blind eye turned to them.”

Cashion said the Mississippi State Department of Health (MDH) has stated, “Most of the time, it’s people baking cakes.”

“That is blatantly untrue,” said Cashion. “These illegals are catering weddings, corporate functions and other private parties. Everyone knows it, yet we continue to bury our heads in the sand. Since when does a regulatory agency have the power to choose to not enforce a law? Should laws not apply to everyone?

“This is not about competition. This is not about putting people out of business. This is about upholding the law and empowering an agency to do what it takes to enforce those laws. Senate Public Health & Welfare Committee Chairman Alan Nunnelee (R-Tupelo) and the Senate should be commended for passing legislation that would do just that. The House should be encouraged to do that as well.”

Section 41-3-15 of the Mississippi Code states that MDH “shall have authority to establish standards for, issue permits and exercise control over, any cafés, restaurants, food or drink stands, sandwich manufacturing establishments, and all other establishments other than churches, church-related and private schools, and other nonprofit or charitable organizations, where food or drink is regularly prepared, handled and served for pay; and … to require that a permit be obtained from the Department of Health before such persons begin operation.”

Limited authority?

Danny Miller, MDH deputy director, said that current statutes do not authorize the department to penalize a food service facility for operating without a permit.

“The department’s authority is limited to seeking an injunction against a facility to cease operating without a permit,” he said. “Any penalty assessments are at the discretion of the local courts. For the past two years, the Mississippi State Board of Health, at the request of the Mississippi Restaurant Association, has proposed the legislation (referred) to, and in fact, MDH staff have met with legislators and testified at various committee meetings in support of the Board of Health’s proposed legislation.”

At a particular hearing during the 2005 legislative session, House members suggested that the Mississippi Restaurant Association work with MDH to develop a funding mechanism to improve enforcement capacity of the department, said Miller.

“MDH’s environmental program is funded primarily (78%) by state general funds and only 22% by fees,” he said. “As of this date, we have not received any proposals from the MRA. In addition, MDH encourages patrons to proactively request proof of a permit before hiring a food service facility to cater an event.”

The MDH Web site, HealthyMS.com, contains a complete list of permitted caterers.

Who’s responsible?

Despite the controversy surrounding the illegal catering issue, businesses remain unprotected if they hire a caterer that does not have liability insurance and cause an outbreak due to improper handling of the food.

“The most at risk are the young, elderly and indigent with compromised immune systems,” said Calvin Coleman, a fully permitted caterer for Naomi’s Catering, The Markham Café and The Crystal Ballroom in Gulfport. “We want people to feel comfortable when attending a catered event that they and their families can trust that the food they are being served by the caterer has been prepared using safe procedures. Injury to the guests could come in more forms than just food borne illness (such as) cut lips from chipped glasses … burns caused by spilled hot liquids. Hosts and corporations are not aware that they are legally liable if the caterer does not have insurance. If they don’t have a permit, they don’t have a license, and if they don’t have a license, they likely don’t have insurance.”

Coleman pointed out that illegal caterers do not pay sales tax, but often give the illusion of legality by collecting it.

“State and federal income taxes, as well as FICA, are not being paid, resulting in loss revenue to the state,” he said.
Illegal caterers have an unfair advantage, said Coleman, who added that the primary goal of association members is not to shut down illegal operations, but to make them legal.

For example, one illegal caterer had a primary client, a “certain large utility company,” that issued a company-wide policy requiring all food services provided to the company must show proof of permit and licensure. “She became permitted and is now legal competition to me,” said Coleman. “This gives her the ability to fully advertise her company and to publicly compete.

“I continue to stress that the issue is one primarily of public safety and trust, and that we would love to see these caterers legal, not shut down,” he added. “These caterers we’re talking about range from doing small, simple parties in homes to large corporate events serving hundreds of people. These caterers were not just single moms trying to make an extra dollar to feed their children, but many are society ladies and gentlemen who think they are Martha Stewart and Colin Cowie.”

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.

About Lynne W. Jeter

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