The Four Seasons Resorts on Maui and Hualalai, on the Big Island of Hawaii, must repay food and beverage service employees the portion of service fees that was diverted to other corporate uses without being discussed to customers, Federal District Judge Helen Gillmor ruled recently.

According to WaiterPay.com:

In the lawsuit, Four Seasons did not dispute that the resort customers are billed an 18 to 22 percent service charge, and that it retained a portion of the service charge that was not distributed to employees. Judge Gillmor ruled that “Four Seasons failed to clearly disclose to at least some customers that service charges would not be remitted in full” to the servers, and therefore they were liable to the servers for unpaid wages, under Hawaii law.

A trial will determine the amount of back wages the company must pay.

A Google search turns up a lot of recent news about Hawaii’s Four Seasons resorts, but I didn’t see any mention of this case.

Gillmor’s decision ripped into a series of defenses thrown out by Four Seasons, including claims that it did not actually employ the banquet servers because “day-to-day” operations of the two resorts were handled by 3900 WA Associates, LLC (Maui) and Hualalai Investors, LLC.

Four Seasons states that these entities each separately controls its own payroll, has its own revenues, issues its own financial statements, makes its own human resources decisions, and has its own human resources department.

But the court rejected the argument, citing evidence that Four Seasons was contractually responsible for operating the resorts, and employment agreements drafted by Four Seasons and stating, “in capitalized letters, ‘I AM A FOUR SEASONS EMPLOYEE.'”

The class action lawsuit was originally filed in November 2008. A legal issue in the case was referred to the Hawaii Supreme Court, which issued a ruling in March 2010 which allowed the case to go forward.

The case is just one of several legal claims brought to enforce a state law on tips passed by the legislature in 2000.