Spa Employees to Share Millions in Gratuity Settlement
The luxury Canyon Ranch Spa in Lenox, Mass., where patrons pay thousands of dollars for services including facials and tai chi classes, has agreed to pay $14.75 million to hundreds of waiters, massage therapists, yoga instructors and other employees who said the spa denied them tips they were owed.
The settlement, which was completed Monday in Federal District Court in Springfield and awaits a judge’s approval, is thought to be one of the largest wage cases in Massachusetts history.
The lawsuit, filed last year, claimed that employees were the intended recipients of an 18 percent service charge the spa levied on all bills at the all-inclusive resort. The spa told patrons that tipping was not necessary because gratuities were included in their bills, the lawsuit said.
Massachusetts law says that all service charges, gratuities and tips must be distributed to employees, including those who work outside restaurants. The settlement covers employees who worked at the resort from April 2004, when nonrestaurant employees were added to the law, to October 2007.
The fee, the resort said, was never intended to be part of its employee’s pay, but rather for things like airport transfers.
According to the lawsuit, Canyon Ranch required patrons receiving a spa treatment or other service to sign a voucher that stated a gratuity was included, something the spa no longer does. The lawsuit also claimed that program coordinators actively discouraged guests from tipping employees.
Lawyers for the plaintiffs referred all questions to Canyon Ranch, and employees who were reached did not comment.
The lawsuit said employees had to decline all tips when offered. If patrons insisted on tipping, they would have to take the tips to a designated area and fill out a form, which few did, the lawsuit said.
“Patrons of Canyon Ranch intended and expected that Canyon Ranch would honor its contractual commitment and representations,” the lawsuit said, “and therefore distribute tips and service charges (including without limitation the 18 percent charge) to the plaintiffs.”
The suit added, “Many Canyon Ranch employees feared that they would lose their jobs if they pursued their inquiries or pressed for payment of the tips and service charges owed them.”
The spa, a sprawling compound with a quaint New England inn and a mansion modeled after Versailles, still charges the 18 percent fee, which is now called an “amenities fee.”
“The resort amenities fee or any portion of it,” the spa’s Web site says, “does not represent a tip, gratuity or service charge for wait staff employees, service employees or any other employee at Canyon Ranch.”
In an interview, Jerry Cohen, the chief executive of Canyon Ranch, said the service charge was never meant to be viewed as a tip. Mr. Cohen said employees received a generous pay and benefits package, rendering tips unnecessary.
“We didn’t want our employees to have to rely on tips for their livelihood,” he said.
Employees are still told to refuse tips when initially offered, Mr. Cohen said.
He said the amenities fee was still necessary, as it paid for the perks that guests expected from an all-inclusive luxury resort, like free telephone service.
“The only thing that has changed is we now refer to it as a ‘resort amenity fee,’ ” Mr. Cohen said. “We changed the language.”
Employee Comment:
As one of the many massage therapists at Canyon Ranch, I would like the opportunity to respond. Your article suggested that the hundreds of employees at Canyon Ranch are an unhappy lot, subjected to repressive management and being cheated out of their wages. Nothing could be further from the truth.
I have worked for Canyon Ranch since its opening day. I have never felt cheated or misled with regard to my compensation. The rate of pay is generous. In addition, the Ranch offers many benefits that few therapists receive elsewhere: excellent professional training (often free), medical and dental insurance, 401(k), supplemental disability, and full use of the spa facilities.
More important, we work for a family business, with a strong sense of purpose and integrity. The founders, Mel and Enid Zuckerman, are good, kind people who feel strongly about changing people’s lives, including those of their employees. We love them dearly and they have been deeply hurt by this.
No one “won” this one except, perhaps, the lawyers.
DEBORAH L. CARTER
East Chatham, N.Y.
