ACC Value Challenge

Palace Entertainment


Outside Counsel Performance Criteria

Legal department takes the lead on preventing theme park guest and employee injuries

By Jennifer J. Salopek

“I love the amusement park business, but I'm not a guy who goes on rides. Kiddie rollercoasters and lazy rivers are about as daring as I get,” says Michael Baroni, general counsel of Palace Entertainment in Newport Beach, California. The company owns and operates 22 parks in 11 states, with 600 rides and attractions, that provide employment for 10,000 people and draw 7 million visitors each year. “When I accepted the job at Palace Entertainment, I knew safety would be my number 1 concern. I had read horror stories of injuries and death that kept me up at night before I even started this job.” (For the record, according to the International Association of Amusement Parks and Attractions, the likelihood of being injured seriously enough to require overnight hospitalization on an amusement park ride is 1 in 24 million.)

But when he joined the company in 2010, Baroni found conditions within the legal department that gave him nightmares: a backlog of cases up to seven years old, many multimillion-dollar lawsuits, and large numbers of workers' compensation incidents. These conditions had largely been created by a growing reputation as an easy mark: Palace only took a few cases to trial, and lost some in the $1 million to $3 million range, while settling cases, on average, for 40 percent of the amount being sued for. Cases were difficult to defend; when incidents occurred, there was poor documentation of scenes and protection of evidence. Safety matters were left with the general managers of individual parks, who mostly had to fend for themselves with little corporate guidance or support.

Baroni decided to tackle the problem head-on with a multipronged approach he labeled Safety 1st, with the goal of revolutionizing company culture to focus on safety above all else.

People. First, he replaced all of the staff in Palace's legal, human resources, and risk management departments. “This is something I cared very much about. I strongly believe it's critical to have superstars on your team who have the right attitude-an enthusiasm for improving safety,” Baroni says. He created a committee of general managers and maintenance staff, which shares safety information and implements solutions consistently across properties. General managers who exhibit the most successful, proactive attack on safety issues each year receive an award. The company hired a corporate safety expert who is solely focused on park safety matters.

Policies. Palace Entertainment's approach to safety is codified in the new Safety 1st pledge, in which the company's commitment to safety is spelled out, and every employee, regardless of role, agrees to serve as a “safety officer.” Same-day reporting of incidents into Legal is required through new forms and procedures; incidents are tracked through a new database and investigated immediately.

“We investigate claims immediately and thoroughly, taking witness statements, documenting with photos, noting the weather, and so forth,” says Baroni. “This is so that we can develop strategy and settle cases before claimants get to lawyers. I am hands-on with every litigated case and claim.”

Physical plant. Baroni frequently visits parks, some of them by surprise, resulting in hundreds of safety improvements, from kitchen reconfigurations to bridge repairs and roof supports. He also enlisted vendors and ride designers, working with manufacturers to redesign warnings and procedures in their manuals and signage. After an incident in which a girl fell from a rock-climbing wall, Baroni demanded numerous design changes to the safety harness system. He has pushed for the redesign of water slides, rollercoaster seats, and ride restraints. Baroni has also reviewed physical plant and work processes to ensure employee safety, everything from weather hazards to how they install giant Christmas trees.

Processes. The revamped process for Palace employees who breach safety guidelines-for example, a waterpark lifeguard who walks away from his post-is clear and consistent: immediate termination. “The certainty and swiftness of terminations has proven to be a highly successful incentive to abide by safety rules,” Baroni says.

For workers' compensation claims, Palace implemented a Nurse's Line that employees can call to get medical advice rather than being immediately funneled into the WC process. The types of work people can do are adjusted to their abilities.

Prevention. Baroni has implemented third-party safety inspections, in both the food and beverage and ride maintenance aspects. Palace was the first in the industry to ban loose shoes on go-karts, as well as headwear; as a result, go-kart claims have declined by 50 percent.

Baroni has revamped Palace's insurance coverage, replacing a long-tenured insurance company and broker with new ones that cover amusement parks exclusively. “They are like an extended safety team,” he says.

Preparation. Upon joining the company, Baroni pulled years' worth of bills and case files to analyze them for outcomes and efficiency. If and when Palace is sued, he is ready with a new team of superstar personal injury defense counsel in each state, who also save the company money.

All of these actions, and many others, have contributed to a robust culture of safety at Palace Entertainment that has resulted in plummeting claims as well as costs:

  • Active lawsuits: down 75 percent
  • Number of claims: down 80 percent
  • Number of workers' comp incidents: down 55 percent
  • Number of high-severity workers' comp claims: down 75 percent
  • Average case settlement: down from 40 percent to 10 percent
  • Outside legal fees: down more than 85 percent.

Baroni doesn't claim that all of this was easy. “There was definitely short-term pain and turmoil,” he says. Currently, “enthusiasm for safety is driven by a culture of people who are happy in their jobs, treated well and fairly, and whose concerns are heard.

“Safety 1st is a corporate culture phenomenon. We are all on a shared mission. I am amazed at where Palace is now.”

From the Judges

"Impressive reductions in suits and claims; the project is sustainable, it has been around for several years and is still seeing improved results. Great story about prevention and safety."

  Christopher Pflug, Holly Roberts,
   Michael Baroni, Diana Tran,
   Rocio Aguerrebere

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