Ritz-Carlton Employees Awarded $1.8M in Unpaid Gratuity

A class action lawsuit against The Ritz-Carlton Hotel Company filed by two food and beverage service workers has resulted in a $1.8 million class action settlement.

The wage and hour class action lawsuit alleged that the company charged hotel guests a “service charge” that was not distributed to the company’s waiters, servers, or cooks. The lawsuit further alleged that this violated Hawaii law—as well as precedents set by recent court cases.

According to Hawaii law, such a service charge can only be charged if it is either directly paid to employees as tip income or the company explicitly states to their customers that the money is not going to the employees. This is similar to federal law.

Service charge lawsuits like this one have become more common after a landmark case in New York.  This case clarified several aspects of federal wages and hours law, which has in turn made it easier for employees to seek legal action against employers over issues related to service charges and gratuities practices. After the New York case opened the floodgates, there has been a spate of wages and hours cases that hinge on issues related to service charges and tips.

The Ritz-Carlton class action lawsuit was filed by Elizabeth Valdez Kyne and Adam Borowiec sought several types of damages. It sought the recovery of the money from the service charges, as well as legal fees and other damages. It also considered cy-près awards. That is, if enough of plaintiffs do not come forward, their share of the ultimate settlement is donated to a charity or some other cause that may indirectly benefit class members.

The case is formally titled Elizabeth Valdez Kyne et al, on behalf of themselves and all others similarly situated, vs. The Ritz-Carlton Hotel Company LLC, doing business as The Ritz-Carlton, Kapalua, Civil Action No. 1 :08-cv-00530-ACK-RLP, filed in the United States District Court for the District of Hawaii.

Join a Free Class Action Lawsuit Investigation

If you’ve had an employer keep your tips or charge a gratuity without distributing it to employees, you may not be sure of your next move. But you need to take action fast, since statutes of limitations may limit the length of time that you can wait before taking action. You can take your first steps by visiting the Minimum Wage Lawsuits: Service Charge, Wage & Hour Class Action Lawsuit Investigation. Here, you can enter information about your situation for a legal review by a trained expert with a background in this type of litigation. The initial consultation is completely free of charge, and from it, you can receive valuable guidance on the best steps to take in your exact situation.