Hotel Workers Sue Eight Hotels, Including Hilton, LAX Westin, Four Points for Violating Service Charge Ordinance
November 7, 2007
City News Service

Employees at eight LAX area hotels - the Four Points, Marriott, Renaissance, Embassy Suites, Courtyard, Westin, Hilton and Radisson – filed class action lawsuits in Los Angeles Superior Court on September 25, against the hotels for violating a recently enacted city law requiring LAX area hotels to pay to their employees all tips and services fees collected on their behalf. Despite the law, the hotels have continued to pocket the fees that they are collecting on behalf of their employees. The Hotel Service Charge Reform Ordinance was passed by the Los Angeles City Council on November 22, 2006 and signed by Mayor Antonio Villaraigosa on November 27, 2006. It became effective on January 1, 2007.

Because the hotels lead consumers to believe that the fees they are paying aregoing to the employees who serve them, the Ordinance is intended to protect both workers and consumers. Despite the fact that the statute has been in place since the start of the year, none of these eight LAX area hotels have changed their practices to comply with the clear language of the ordinance. For example, while the Hilton LAX, Four Points, Radisson and Westin charge a fee of up to 20% for all food and beverages served at banquets and room service, the hotels refuse to pay the collected charges to its servers.

The amount of fees and gratuities withheld by the eight hotels is staggering, with a typical Century Boulevard Hotel doing an estimated $5,000,000 - $6,000,000 a year in banquet business alone. The result is these hotels are pocketing hundreds of thousands of dollars owed their employees.

“In bringing these lawsuits, the employees seek to bring an end to the 8 hotels’ despicable and unlawful practice of misappropriating their employees’ tips. The workers want to obtain those tips which the consumers expected that they would receive,” said Randy Renick, attorney for the employees.

“We work hard to provide for our families and this is money that is being taken from us, we just want what we have earned,” said Marco Garcia, a banquet server at the Four Points Sheraton LAX.