Workers Sue Hotel Henry for Numerous Labor Law Violations
Hotel Henry employees Nicole Bundy, Martha Glauser, Morgan Molfino, Gabriel Burgos Nieves, and Ahshanaye Riley filed a lawsuit in New York State Supreme Court Friday. The current and former employees claim that Hotel Henry unlawfully withheld hundreds of thousands of dollars in unpaid gratuities, wages, and commissions, including by requiring workers to work whole or partial shifts performing manual labor without compensation during the pandemic. The workers are represented by Ian Hayes, a partner with the labor law firm Creighton, Johnsen & Giroux.
Since 2017, Hotel Henry Urban Resort Conference Center has been one of Buffalo’s premier destinations for weddings, corporate functions, and other private events. Considered a crown jewel of the city, Hotel Henry is part of the National Historic Landmark Richardson Olmstead Campus and has greatly benefitted from public redevelopment money—$60 million in direct state aid and another $16.6 million in state and federal tax credits. Local, national and international press coverage has contributed to profits and growth in its early years. As owner Dennis Murphy told the Buffalo News in November 2018, “we are significantly ahead of our projections” and an expansion is “a matter of ‘when’ and not ‘if.’”
Hotel Henry has hosted more than 700 events, many of which are large weddings and corporate conferences that cater to hundreds of people. At each of these events, the hotel charges a “customary 20% administrative fee,” which can total upwards of $5,000 for a single event. The hotel leads customers to believe that workers receive the charged fee when in reality the company retains all of the money. The scheme is perpetuated through deceptive banquet contracts, company sales policies, and even direct misrepresentations from sales staff to customers. For instance, when a customer asked Hotel Henry’s Director of Sales whether the 20% surcharge included a gratuity that went to employees, the Director of Sales responded by saying “yes it includes gratuity – we call it administration fee.”
Under New York Labor Law § 196-d and longstanding case law, an employer may not retain a charge that is “purported to be a gratuity for an employee,” and a mandatory charge will be presumed to be such a gratuity if it is not clearly identified as otherwise. The hotel has gone far beyond simply failing to identify the 20% charge as a mandatory fee retained by the restaurant; it has taken active, deliberate measures to mislead its customers into believing these substantial charges are paid to servers.
To make matters worse, Hotel Henry continues to commit many other New York Labor Law violations. Management arbitrarily distributes additional gratuities left by customers amongst salaried employees, kitchen staff, and at times appears to have retained tips for the hotel. Workers do not receive legally required breaks and the hotel deducts the break time from their paychecks anyway. Appallingly, Hotel Henry has even required workers to “volunteer” their time to help with manual labor around the facility during the pandemic, and threatened employees who questioned being directed to work for no pay.
While Time Magazine labeled Hotel Henry one of the “Greatest Places” in the world, its success has been built on the manipulation of its customers and the exploitation of its workers.