Workers at three Hawaii hotels filed a class action lawsuit against the hotels’ owner and operator Diamond Resorts, alleging wage theft. The class action lawsuit covers past and current employees of The Modern Honolulu, Kaanapali Beach Club, and The Point at Poipu. At least 325 employees from the three hotels are covered by this lawsuit. UNITE HERE Local 5 represents hotel workers at The Modern and Ka’anapali Beach Club.
The lawsuit alleges that employees at these three hotels did not receive paychecks in a timely manner, which is a violation of state laws. This resulted in workers not being able to pay bills on time and incurring overdraft fees. According to the lawsuit, Diamond Resorts should pay the affected employees their late-paid and unpaid earned wages plus double damages and interest.
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Yesterday, as the lawsuit was being filed in state court, Diamond Resorts announced to the Union that it would immediately lay off the entire banquets department at The Modern Honolulu, totaling 28 workers, including named plaintiff and banquet captain Dominique Spurling.
“First, Diamond Resorts failed to pay us on time, which is why we filed this lawsuit. Then they respond by laying off my entire department. This is unacceptable and a huge injustice, not only for myself and my coworkers but our whole community. According to Diamond Resorts’ numbers, they will be saving $2.3 million per year by doing a mass lay off. Diamond Resorts is bad for Hawaii. This is money that was going to local families, but Diamond Resorts is now snatching it away and taking it off island,” says Spurling.
In May, The Modern notified 78 workers—nearly 30% of the workers at the hotel—that they will be laid off. Local 5 filed federal charges against The Modern because Diamond failed to negotiate the layoffs with the Union. In response to the charges, Diamond Resorts rescinded the layoffs and the federal charges were dropped on the condition that the company bargains in good faith with Local 5. However, when the lawsuit was filed yesterday, Diamond Resorts immediately implemented the banquet department layoffs and has said it will refuse further meetings with the Union and workers.
“Why won’t Diamond meet with us?” Spurling wondered, ”Steve Bell [Executive VP of Human Resources for Diamond Resorts] needs to face the workers and take us seriously. We are being impacted by Diamond’s desire to profit at the expense of workers like me, our families, and our communities.”
The collective bargaining agreement between Local 5 and The Modern expired in December 2018, and the Union and Hotel are in the middle of negotiating a new agreement. Diamond Resorts purchased The Modern in April 2018. The collective bargaining agreement between Local 5 and Kaanapali Beach Club expired yesterday.
This is the latest in a string of negative issues impacting Diamond Resorts. Diamond Resorts has been accused of unethical high-pressure sales tactics for years, including preying on the elderly, which has resulted in a number of lawsuits against the company. In 2016, the State of Arizona investigated Diamond Resorts for violating the Arizona Consumer Fraud Act after receiving hundreds of consumer complaints against Diamond Resorts.
The Modern is a full-service hotel, but Diamond Resorts has expressed interest in partially or fully converting the property into a timeshare. They also plan on cutting guest services like daily room service, meetings, and catering. The immediate layoff of the entire banquet department means banquets services are no longer available at The Modern. However, they have not received timeshare registration approval from the Department of Commerce and Consumer Affairs or the permits needed to build or renovate hotel rooms into timeshares, so it is unclear why layoffs are necessary at this point.
Local 5 has been saying for many years that timeshares have a negative impact on workers, guests, and the state. Timeshares pay less than hotels for more difficult work, and they provide less jobs. They negatively affect the guests’ experience in Hawaii by charging exorbitant maintenance fees while cutting guest services like daily room cleaning.
Local 5 is continuing to look into its legal options. Workers at The Modern have been organizing weekly rallies and actions at the hotel and are calling on the community to support their campaign to protect good jobs and make one job enough to live in Hawaii.
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