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Local News

February 1, 2013

Otesaga pays $550,000 to settle lawsuit

Resort sued by workers, admits no wrongdoing


“The financial dispute concerned people that … we believed were not properly eligible to participate in the service-charge assessment,” Greenberg said. “That included people with managerial responsibilities of varying degrees. … Some of these people were captains in the dining facility. Some of them had other management positions.”

“It was our view that these persons’ function as management personnel, as opposed to hospitality or service personnel, disqualified them from participating in the service-charge assessment,” he added.

The lawsuit had five named plaintiffs: Virginia M. Elliott; Deborah Knoblauch; Jon Francis; Laura Rodgers, and John Rivas. An additional 27 workers and ex-workers filed claims under the Fair Labor Standards Act and joined the lawsuit.

Laura Rodgers said in an affidavit that she was paid $4.60 an hour when she worked in the dining room, and that her share of the service charge was $1.90 per person for breakfast, $1.85 for lunch; and $4.50 for dinner. But she said in the affidavit that she never received an accounting from the hotel about where the rest of the money went.

She said dining captains, who received a portion of the money, exercised considerable managerial authority over servers and could reward or punish the servers as they saw fit. But they had almost no service function themselves, she said.

She also alleged that the captains actively discouraged diners from leaving additional tips.

“On at least one occasion, I have had a customer retract an additional tip given to me after a dining captain approached the customer to explain that the additional tip was not necessary,” she said in the affidavit.

Distribution of the settlement is complex.

Altogether, 660 people were identified as members of the “class,” and thus entitled to a share. The plaintiffs’ attorneys received $112,475, or 20.45 percent of the settlement, plus expenses totaling less than $15,000. An additional $24,000 was allocated to Rust Consulting Inc., which is administering the settlement.

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