A monetary victory for the little guys. Pending federal approval, 600 Canyon Ranch employees will receive a share of a $14.75 million settlement from Canyon Ranch for the misappropriation of service fees at their Lenox Resort. Though it won’t achieve the headlines of our current financial crisis, this represents a victory for the middle class. The decision, coupled with the skycaps’ recent victories against the airlines, is a significant strike against the corporate greed that plagues our country. Unfortunately, there is no admission of guilt or wrongdoing. Just a payout, plain and simple. And the consumer is left outside the lines.
Previously, all services at Canyon Ranch included an explicit 18% service fee. As the website declared that “no additional tipping is necessary or expected,” any additional tipping was expressly discouraged on the basis that is was included service fee and, if a guest still wished to offer an additional tip, the corporation required an elaborate process for doing so. That would be fine if the workers were actually receiving the 18% compensation for the services they had directly provided. While the full compensation policy of Canyon Ranch is unknown, the term “service fee” directly implies compensation for service. It is another way of saying “gratuity” or “tip.” While Canyon Ranch executives now express it was not their intention, they certainly gave that impression to their clients, who would have no reason to believe that the service fees were not going to the service workers based on the billing disclosure and draconian extra-tipping procedure.
In true American fashion, Canyon Ranch is able to avoid admission of guilt despite the size of the financial settlement. The legal documentation of the settlement allows Canyon Ranch to deny any wrongdoing, and certainly any later mention of the matter will have to include the use of one of our society’s most misappropriated terms, “alleged.” To further the point, the corporation has released a statement declaring that the 18% charge “was never intended to be a significant part of the employees’ compensation.” In addition, “any confusion or misunderstanding created by its use of the term ‘service charge’ was unintentional.” Really? Then it is clear that the 18% charge was nothing more than a way to gauge clients. After determining an attractive price schedule, the corporation could gain additional revenue from the misleading 18% ‘service charge’ under the guise of a gratuity for their employees. This way, no uncomfortable explanation was necessary for an unsightly, “facility charge” or “activities fee.” Instead, the billing would have the straightforward appearance of “service” followed by “service fee” which would cause no eyebrows to rise nor inquiries to be made. The corporation was unwilling to, in essence, ask for the money directly.
But now the game is up. The workers, who had been hushed for so long, finally have the opportunity to receive what their clients believed they had already given them. Canyon Ranch is not alone in its theft. Various airlines recently lost a class-action suit for the misappropriation of tips, and smaller businesses like Locke-Ober restaurant in Boston have been similarly exposed. Despite these settlements, such practices will continue with the conviction that the corporation is more powerful than the lowly service worker. Yet what should be more glaring in these cases is not only the mistreatment of the affected workers, but the bold contempt held by the businesses against their customers. Anyone who has ever paid one of these tips and now know it was appropriated by the company should be angry. The employees were robbed, and so were you.
Settlement article from Boston Globe:
