"Reversing Perverse Incentives and Aligning Interests: A Statutory Ap" by Sara Seymour
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Vanderbilt Law Review

First Page

337

Abstract

The hospitality industry has a sex trafficking problem: Seventy-five percent of sex trafficking victims report coming into contact with a hotel at some point during their trafficking. Though hotel franchisors publicly tout their efforts to combat sex trafficking, they are not properly or adequately incentivized to intervene in a meaningful way. The majority of hotels in the United States are franchised, and for every franchised room that is rented out—whether for sex trafficking or otherwise—hotel franchisors receive royalties. Further, franchisors are motivated to dictate material consistency, like what brand of soap to use, but not safety measures, because it allows them to benefit from uniform marketing while avoiding traditional vicarious liability claims for sex trafficking at their franchisee hotels.

Hotel franchisors publicly disclose in environmental, social, and governance reports their efforts to combat human trafficking, but such reporting lacks standardization. Despite franchisors’ awareness of the prevalence of sex trafficking in the industry, when victims pursue legal action, they often find that the hotel franchisors deny awareness as to that individual plaintiff. Franchisors’ use of this “ostrich defense” has prevented sex trafficking victims from recovering damages from companies that have financially benefited from their trafficking. This Note advocates for an amendment to 18 U.S.C. § 1595, the federal statute intended to combat sex trafficking, that would require hotel franchisors to collect and publicly report indicia of sex trafficking at their properties, as well as what steps they are taking to combat sex trafficking. This would allow plaintiffs to more effectively demonstrate knowledge on the part of hotel franchisors—one of the requirements under § 1595—and in turn incentivize hotel franchisors to avoid liability by effectively intervening in sex trafficking at their franchisee hotels

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