Sarah M. Block
Wed, 04/19/2023
On April 7, 2023, after a multi-day bench trial, a California Superior Court judge issued a tentative ruling awarding approximately $9 million in damages for unpaid service charges to class of banquet servers who worked at the Marriott Marquis hotel in San Francisco from 2012-2017, holding that Marriott had violated the California Labor Code’s prohibition on employers keeping any portion of gratuities left for employees. Specifically, because a reasonable customer would have understood that the “service charge” added to banquet bills and calculated based on a percentage of the total bill was actually a gratuity that would be distributed to the servers working those events, Marriott violated the law by distributing only 70-72% of the service charges paid to banquet staff and retaining the remainder. Marriott changed its practices in 2017, cutting of liability, when it began splitting the service charge into two separate charges more clearly identified on the bill – a “staff charge” and a “house charge.” The case is styled Ordono et al. v. Mariott International Inc., No. CGC-16-550454 (Cal. Sup. Ct.).
Many states have laws similar to those in California which govern the use of service charges by restaurants and protect the rights of both service workers and diners. For example, under the District of Columbia’s consumer protection laws, restaurants must clearly and prominently disclose fees at the beginning of the ordering process (either verbally or in bold print on the menu), accurately describe the reason for the fee or how it will be used, and only use the fees retained for the purposes disclosed. Notably, if a service charge is disclosed as a “service fee,” it should be paid directly and in full to service workers like servers and bartenders, unless there is another purpose clearly disclosed.
If you are a restaurant service worker and believe you have not been paid all of the wages or tips you have been owed, please contact MSE through our website to learn more about your rights.
