Metropolitan News-Enterprise


Tuesday, October 22, 2002


Page 3


Surcharge on Room Service Meals Not Unfair Competition Violation—C.A.


By a MetNews Staff Writer


A service charge on room service meals, printed on the menu and paid by the hotel directly to the server, does not violate California’s unfair competition law, the Fourth District Court of Appeal has ruled.

In an opinion filed last week and disseminated yesterday, the justices rejected a class action brought by a former guest at the San Diego Wyndham Plaza Hotel. Linda Searle claimed that the 17 percent charge was unfair because it forced her to pay a gratuity whether she wished to or not, and was deceptive because a guest who does not know that the server is keeping the charge might be misled into adding a tip.

Justice Patricia Benke, writing for the appeals court’s Div. One, said Searle’s argument fails because the charge is not a gratuity, but an add-on. Just like charges for mini-bars “stocked with $3 candy bars and $2 sodas” and in-room movies, the room service charge offers the guest an optional service, she said.

As long as the charge is clearly stated and the guest is free to accept or decline the service that it covers, there is nothing unfair or deceptive about it, the justice concluded.

Benke agreed with San Diego Superior Court Judge Linda B. Quinn, who sustained Wyndham International, Inc.’s demurrer and dismissed the complaint.

California law, Benke noted, does not regulate tips, except by prohibiting employers from taking them by deducting them from an employee’s wage. That statute, Labor Code Sec. 351, is a protection for employees and cannot support an allegation that a service charge is unfair because it might result in an employee being overcompensated, the justice reasoned.

“The difficulty we have with [Searle’s] argument,” the justice wrote, “is its premise: that because the 17 percent service charge is paid entirely to the server, we must therefore treat it as a gratuity.”

She elaborated:

“What a hotel does with the revenue it earns—from either the mini-bar, in-room movies or its room service charges—is of no direct concern to hotel guests. The mini-bar patron, like the room service patron, is given both clear notice the service being offered comes at a hefty premium and the freedom to decline the service. Just as the hotel patron has no legitimate interest in what the hotel does with the large premium it earns from its mini-bar snacks, the patron has no legitimate interest in what the hotel does with the service charge. The hotel is free to retain for itself the large premium, as well as the service charge, or to remit all or some of the revenue to its employees.”

In no way, she added, does the service charge deprive the patron of the right to choose whether to tip or not. While the patron might wish to base his or her tipping decision on whether the server or the hotel keeps the service charge, Benke wrote, the law does not compel the hotel to disclose that information,.

“[W]e are not willing to indulge the notion that the custom of tipping somehow gives patrons the right to know how much a server is being paid by his or her employer,” she declared. “In this situation the only obligation the hotel has to the patron is the one codified in Labor Code section 351: an assurance that, however large or small, the tip will go to the server, not the employer.”

The case is Searle v. Wyndham International, Inc., D039145.


Copyright 2002, Metropolitan News Company