By Pam Zubeck
When The Broadmoor hotel’s wait staff and bartenders, in crisp white shirts and black pants, hustle to serve meals and pour drinks, they’re hoping for a good tip to supplement their hourly wage.
But the resort keeps a portion of those tips, or “service charges,” automatically tacked on to customers’ bills.
When former bartender and banquet server Chad Warriner realized what was happening, he quit and sought legal advice, which led to his filing a lawsuit against The Broadmoor in November.
But the case was dismissed in mid-January after the hotel produced documents Warriner had unwittingly signed when hired that force such disputes to arbitration and keep them out of a public courtroom.
“In this case, as in almost every employment situation I have seen,” his attorney, Adam Harrison of Denver, said via email, “the arbitration agreement was mixed into a large number of new hire documents that Chad was required to sign all at once. Like most American employees, he did not realize the significant legal rights he was losing and in any case, he did not have a choice whether to sign or not.”
Warriner’s case also seeks compensation from The Broadmoor for denying him 10-minute breaks every four hours as required by state labor rules.
Because of the arbitration requirement, Harrison won’t be able, as he first planned, to certify a group of all similarly situated Broadmoor employees to bring a class-action lawsuit. And even a second plaintiff in the original lawsuit has dropped out.
But Harrison is game to represent any Broadmoor employee interested in seeking damages for lost tips and withheld work breaks.
“The Broadmoor illegally took part of the wages of many, many employees and none of those people will have a right to get recompense for that [through a lawsuit],” he said. “Each would have to contact a lawyer, and I will tell you we are taking those cases.” He declined to say whether the resort scavenged tips of others, such as spa workers or valets.
Warriner worked at The Broadmoor for two years starting in May 2017. According to the lawsuit, the resort labeled plaintiff’s tips as “service charges.”
The Broadmoor required servers and others to inform customers about the service charges, which are automatically added to bills, “thus diminishing the possibility that patrons would pay any other Tips… ,” the lawsuit says.
The Broadmoor captured 13 percent of those service charges before doling out the balance to employees, the lawsuit says.
For example, a bill from The Tavern restaurant for drinks and snacks in January 2019 totaled $505.70 and included a 20 percent service charge, or $76. The Broadmoor’s 13 percent share totaled nearly $10. The customer didn’t add a separate tip or gratuity, but even if he had, the “Broadmoor also deducted money from discretionary tips the Plaintiffs and the Class Members received directly from guests,” the lawsuit says.
Colorado’s Wage and Hour Law forbids employers from taking any part of employees gifts, tips or gratuities unless they post a printed card, at least 12 inches by 15 inches with lettering a half-inch high stating that gifts, tips and gratuities “are not property of the employees but belong to the employer,” the lawsuit says, noting The Broadmoor failed to post such a notice.
It’s unknown if The Broadmoor has since posted a sign. Neither the resort nor its attorneys responded to requests for comment.
Harrison said, “It’s our position that the deduction is highly improper.” He adds the resort’s policy of forcing people into arbitration is “unjust.”
Harrison said he’s aware of at least two others who will use arbitration to reclaim their tips from The Broadmoor, and he said such cases arising from retained tips aren’t uncommon in Colorado.
Though Warriner will have a say in who is hired as the arbitration hearing officer, The Broadmoor will pay him or her, but only after he ponies up a $400 fee to start arbitration, Harrison said.
Regarding the 10-minute breaks, the state’s Overtime and Minimum Pay Standards Order says, “Every employer shall authorize and permit a compensated 10-minute rest period for each 4 hours of work, or major fractions thereof, for all employees.”
Nevertheless, throughout Warriner’s two years at The Broadmoor, he and others “worked long hours without breaks,” the lawsuit says.
His co-plaintiff, Morgan Manowske, made a demand to The Broadmoor in October 2019 for $318 in unpaid rest breaks, but was stiffed. She’s since dropped out of the legal action.
It all boils down to businesses making money unfairly on the backs of their employees, Harrison alleges.
“If you can limit labor costs by taking just a little money, $300 per person per year, it’s almost never going to be worth it for that employee to go after that [in a lawsuit], in spite of it being theft,” Harrison said.
Aggrieved employees don’t have to seek legal counsel to call out their employers for unfair labor practices. They can file complaints with the Colorado Department of Labor and Employment.
“Firstly, any employee can file a wage claim, including as to alleged tip theft or break rule violations — and within CDLE, the Division of Labor Standards and Statistics will definitely investigate it,” Scott Moss, division director, said in an email.
He added the division “recently launched a ‘Direct Investigations’ unit that initiates its own investigations, based on a variety of information — tips they receive as to possible violations, patterns of prior complaints, etc.
“So while filing lawsuits with attorneys is the right of any workers who believe they’ve faced wage violations, we welcome reports to CDLE of possible wage violations,” Moss said.
The state’s website contains a list of hundreds of violations that led to orders to pay thousands of dollars to employees, along with fines and penalties (tinyurl.com/vedpdom).
But Harrison pointed out the Labor Department “has a very limited bandwidth” and fails to pursue many wage cases, including those dealing with missed work breaks.
“They pursue the wage claims they can, but can’t pursue a lot of the complaints filed with them,” he said.
In a June 2019 deposition for a case litigated by Harrison against a behavioral health provider, state Labor Department Chief Economist Alexandra Hall Bovee testified she knew of no break-time case pursued by the state.
The defendant’s attorney Andrew Ringel asked Hall Bovee, “Are you aware of any financial sanction of any kind, whether the category is unpaid compensation for wages, fines, or penalties, arising in the rest break or missed rest break context?”
To which she responded, “I am not.”