Five years ago, in 2008, a lawsuit was filed in US District Court on behalf of hospitality workers at eight hotels in Hawaii, including the likes of Starwood and Marriott. This lawsuit was held up, however, when Four Seasons Hotel attorneys argued that hotel and restaurant employees could not sue under state law as it did not fall into the category of labor and wages statutes, but rather fell into an area of consumer protection statutes.
Hotels and restaurants were taking a portion of the service charges collected to cover administrative costs, rather than distributing the entire amounts to workers. According to attorney Shannon Liss-Riordan, “When patrons pay service charges, it looks like a gratuity and then they don’t tip.” Tips are an integral part of hospitality workers’ pay and, therefore, “service charges must be paid to employees,” Ms. Liss-Riordan added.
Hawaii legislators had passed a law in 2000 to stop hotels from keeping tips that were meant for hospitality workers. The lawsuit that was filed in 2008 should have been a slam-dunk based on this 2000 law, however, the lawyers for Four Seasons Hotel made sure this would not be such an open and shut case, and upon their challenge, the case was referred by US District Court Judge Helen Gillmor to the Hawaii Supreme Court for legal interpretation.
This morning, the Hawaii Supreme Court upheld the 2000 law, which means the 2008 case filed can finally move forward and hospitality workers can finally look forward to recovering their lost gratuities from the hotels that took a portion of the service charges collected.
Attorney Liss-Riordan said this ruling by the Hawaii Supreme Court opens the doors for thousands of Hawaii hospitality workers to recover gratuities from their employers, resulting in literally millions of dollars.