Alerts and Updates

On Your Marks for the Olympics

January 25, 2012

As with any good contingency plan, the primary solution is to think through what your business needs and how the Olympics might impact your ability to do business.

With the Olympics now a little more than six months away, most businesses are fine-tuning their contingency plans. Businesses large and small—whether based in Europe or simply having people pass through—need to be prepared. The Olympics will run from 27 July to 12 August with venues all over London, together with events like football and sailing outside of the capital. There are likely to be significant extra visitors to London, not only those visiting the events but also hospitality staff, security personnel, media, sponsors and hangers-on. The Olympics will be a spectacular event, and London will welcome visitors from around the world. For most organizations, however, planning is essential. Among the planning tasks to be included are those in the following areas.

Accommodation

Demand for hotel rooms is likely to be high. London hotels are busy in normal times, but efforts have been made to increase capacity. The official London 2012 website maintains that more than 100,000 hotel rooms should be available, but some properties will be more in demand than others and some owners have rationed accommodation amongst regular guests. The Intercontinental Hotels Group is the Olympics partner hotel chain. The chain includes Intercontinental, Crowne Plaza, Hotel Indigo and Holiday Inn properties throughout the capital. Companies who use these properties may be wise to speak now to their preferred hotel to ensure availability or locate alternatives.

Transport

London's public transport was an element of the Olympic bid that scored poorly in the IOC's initial evaluation. However, significant improvements have been made since London won the bid in 2005.

Road transport around London is likely to be challenging, as specific Olympic lanes have been designated for official traffic. For those without privileged access, the tube will be at capacity on some routes, particularly at peak hours, and there is likelihood of tube station closures. London Transport expects around 800,000 extra bus passengers and severe delays could be experienced—more so if possible industrial action by around 28,000 bus workers goes ahead. Black cabs may not be the reliable alternative, given that many cab drivers have said that they will not work Central London during the Olympics and given the introduction of new emissions regulations shortly prior to the Olympics, which might mean that a number of older black cabs have to be retired. For many owner drivers, particularly those who work part-time, they will retire with their vehicles. There are additionally rumors of short-term capacity issues in producing black cabs, which has led in part to the authorities' licensing an alternative van-based taxi. Even so, capacity issues should be planned for.

One alternative might be the recently introduced and highly sophisticated cycle-hire scheme that exists in London, known locally as the "Boris Bikes." The Boris Bikes saw a considerable increase in activity during earlier transport strikes, but disproving the common saying, it seems that many users had forgotten how to ride a bike in the 30 years or so since they left school. For businesses contemplating advocating cycle use, it may be worthwhile to prepare. This may include making provision for cycling proficiency courses and allocating space for bike and helmet storage. Employers could also consider taking the long-term hire of bikes for the duration of the Olympics. However, employment as well as health and safety considerations abound in providing equipment. On a cultural note, the terms "office bike" and "office bicycle" should be avoided.

Overground train services could provide another option for those visiting the main Olympics site. Special trains will run from St. Pancras (the terminus of the Eurostar trains in London) to the Olympic site on a new high-speed rail line using temporary platforms at Stratford raised with wood. It is estimated that an additional 4,000 train services will run during the games with longer trains.

Hospitality

Hospitality is likely to be significantly more expensive during the Olympics, and there are already rumors of some restaurants increasing their prices to meet higher demand. For those fortunate enough to be entertaining at the Olympics, proper planning needs to be undertaken to avoid committing an offense under the UK Bribery Act 2010 (the "Act"), which covers giving and receiving hospitality. Unlike equivalent U.S. legislation, there is no need for public officials to be involved—offenses can be committed under the Act when one company executive invites another. Offenses can be committed, even if neither the giver nor the recipient are UK citizens. Given the prices of official hospitality packages, planning should include looking at guest lists and checking the motivation behind the hospitality being offered. Accepting hospitality is also under the scope of the Act, so if you have employees being entertained at the Olympics, you may want to do those checks too.

When the UK bribery legislation was introduced, the Ministry of Justice (MoJ) clarified that hospitality is fully within the ambit of the new law, saying "Hospitality and promotional expenditure can be employed improperly and illegally as a bribe." It seems to be the view of the UK government and the prosecutors that hospitality is often just the first act in a bribery play. For example, one of the prosecutors said during the implementation process that hospitality is "used . . . to groom employees . . . into a position of obligation and thereby prepare the way for major bribery." The MoJ's guidance also says that the sector of business should be taken into account. What is viewed as normal entertaining in some industries would likely appear lavish in others. The guidance also explains that travel and hospitality connected with the service offered is unlikely to be prosecuted—again showing the significance of working out the exact purpose of the hospitality and the itinerary for the trip.

Use of Social Media

It is likely that employees' use of social media and their personal Internet use will increase, partly through a desire to follow events and partly to keep up-to-date with travel issues affecting the journey home. Employers may want to review their social media policies, look at a central intranet portal for travel news and possibly relax elements of their policy for the period of the games. In addition, it may be a good time to remind employees of the special restrictions that exist during the Olympics on advertising (see below) and of the need to have transparency on Twitter and Facebook when talking about your products or services. In the UK, as in the United States, the regulators are investigating companies whose employees used social media to promote their products without disclosing their relationship with the company.

Working from Home

For many organizations, telling staff to work at home may be the answer. It is important to note that this is likely to have security implications. It is unlikely that employees will have a home Internet connection as secure as your corporate network. If they are using their own laptops or transferring information to home computers using email or USB sticks, employers should be aware of the data security risk and consider whether they need to offer employees additional support—for example, virus protection or a security application like Computrace—in case their laptop is stolen. Data protection legislation makes an organization responsible for the security of the personal data it holds: The Olympics' weeks are not excepted. Organizations might want to make special provisions for employees who are dealing with more secure data; for example, they might want to prohibit online corporate banking from home. They may also need to check software licenses, as some may prohibit use of devices that are not part of the corporate network. If companies are encouraging home working, they may want to look at the capacity of their network. If their employees are going to access the corporate network over Citrix, they may want to ensure they have enough licenses in place, and if there are limits on their infrastructure, they should consider telling employees outside of London to work in the office to free up Citrix capacity for London users.

Mobile bandwidth may also be an issue. As phones gets smarter and new devices like iPads enable us to use more bandwidth to do even more things while mobile, the London mobile infrastructure has struggled to keep up. Providers are investing in adding capacity to the network, but it is now a race against time, particularly as the demand for mobile access generally continues to increase. Last year's prolonged BlackBerry outage in London and the 7/7 terrorist bombings have taught us that coverage cannot be guaranteed. Companies who may need emergency access to their employees should consider contingency plans, which could include issuing them with SIM cards from an alternative provider and a reporting procedure using landlines or face-to-face reporting if coverage goes down.

Advertising and Marketing

Companies should be aware that specific regulations exist for the Olympics to prohibit ambush marketing. The organizers issued special guidance in April 2010 on their special powers. As with previous Olympics, there is tightened trademark and copyright protection for Olympic symbols, words and logos. In addition, special laws deal with street trading, ticket sales and the unauthorized use of Olympics tickets as prizes in promotions. Coupled with that, UK law has protected athletes who have featured in marketing campaigns without their consent. In one case, a Formula 1 driver recovered damages after a radio station implied that he endorsed their coverage. If you are planning a event-related marketing campaign, it may be prudent to you check that it is compliant.

Solutions

As with any good contingency plan, the primary solution is to think through what your business needs and how the Olympics might impact your ability to do business. Companies might have capacity in other offices outside of London that they could use on a temporary basis. They may be able to manage customer relationships by sending out July invoices earlier to avoid capacity issues at the end of July, which will also be the start of the Olympics.

For Further Information

If you have any questions this Alert, please contact Jonathan P. Armstrong in our London office, any member of the Corporate Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.