Four Seasons, Marriott Workers Win Millions in Unpaid Tips

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Two famous luxury hotels, Four Seasons Ltd. and the Marriott Hotel Services Inc., have agreed to settle class action lawsuits alleging that they withheld tips from workers that were part of mandatory service charges placed on customer bills. Both of these lawsuits were centered in Hawaii, and were settled within a short time period.

The Four Seasons agreed to pay $4 million to settle a class action lawsuit that had been filed against them in Hawaii federal court. The lawsuit alleged that the hotel giant had wrongfully taken away the tips of the food and beverage service workers by pocketing portions of the tips in the disguised form of “gratuity fees” on guest checks.

The class action lawsuit against the Four Seasons was started five years ago. While some issues in the case remain, such as potentially awarding the food and beverage workers liquidated damages, both sides came to an agreement on the service charge settlement, which was approved by the judge in charge of case.

The other class action lawsuit was filed against Marriott. Under the terms of the Marriott service charge class action settlement, the hotel giant agreed to pay for the lost wages of its food and beverage servers, plus the loss of tips, and interest. Similarly to the Four Seasons lawsuit, a group of servers had come together to sue the hotel after it is was discovered Marriott was taking a portion of their tips through “gratuity fees.”

The judge assigned to this case was U.S. District Judge Leslie E. Kobayashi. She ruled in favor of the servers, who have been trying to collect lost wages since January 2009. Judge Kobayashi stated that Marriott had no materialistic or financial concern that required them to charge these “gratuity fees.” The lead plaintiffs in this case were Bert Villon and Mark Apana, who filed the class action lawsuit in November 2008 on behalf of themselves and their fellow Marriott service workers. The class action lawsuit accused the hotel of misleading customers into believing that the service fees they were being charged had gone directly to the service workers.

Earlier this year, the Hawaii Supreme Court passed a provision under the state’s wage law, stating that it was illegal for hotels and restaurant to charge a mandatory service charge or mandatory customer charge without distributing the fees to the service workers as tips. Under this law, they must give the tips the service workers, or explicitly state that the fees do not go to the service workers.

Several states have made it illegal for resort and restaurant establishments not to inform customers that most of the money they leave for a mandatory customer charge does not actually go to their waiter or waitress. The states that have this policy include Hawaii, Washington, and New York, among others.

In most states, service charges are not considered a tip, which leaves it up to the managers to decide how it is to be distributed. Typically, the service charge does not go to the actual servers. Not all states are required by law to explain service charges, which allows for restaurant and resort managers to use this loophole to pocket a portion of the servers’ tip money. This practice is considered problematic because it could prevent servers from making minimum wage.

The Four Seasons service charge class action lawsuit is Davis, et al. v. Four Seasons Hotel Ltd., Case No. 1:08-cv-00525, in the U.S. District Court for the District of Hawaii.

The Marriott service charge class action lawsuit is Bert Villon and Mark Apana v. Marriott Hotel Services Inc., Case No. 1:08-cv-00529, in the U.S. District Court for the District of Hawaii.

Free Legal Help for Obtaining Unpaid Tips

If you were paid with a mandatory service charge within the past four years and believe it may have negatively affected your minimum wage or overtime pay, you have rights under federal wage and hour laws. Obtain a free case evaluation by filling out the short form at the Service Charge, Wage & Hour Class Action Lawsuit Investigation. One of the skilled employment lawyers working with Top Class Actions may be able to help you get the money you’re owed, at no out-of-pocket cost to you.