Lenox spa agrees to pay up in tips dispute

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Lenox spa just "agreed to pay $14.75 million to about 600 massage therapists, yoga teachers, estheticians, hair stylists, waiters, and other employees who worked at Canyon Ranch between April 2004 and October 2007," reports the Boston Globe. The dispute was over an 18 percent service charge that guests automatically paid. The Web site said, "No additional tipping is necessary or expected," according to the Globe. So, naturally guests thought that 18 percent service charge was going to the service professionals involved. While not admitting to any wrongdoing, the spa is going to cough up all those millions, though they still aren't going to allow spa professionals to be tipped. From the Globe:

    In a statement issued from its corporate headquarters in Tucson, the spa said that the 18 percent charge "was never intended to be a significant part of the employees' compensation plan" and that "any confusion or misunderstanding created by its use of the term 'service charge' was unintentional."

    Elated employees, however, saw the settlement as vindication.

The article also says the spa has replaced the service charge with an "amenity fee," which still does not go to the employees, and that the company says it stands by its no-tipping policy (and continues to pay its employees well).

Not quite sure how I feel about this. After all, a service charge is a service charge, not a tip. Maybe it was a bit deceptive, but I'm not sure I come down on the employees' side on this one--at least, not to the tune of almost $15 million. I'd err on the side of transparency if I were the company and just explain that employees are paid very well so tipping is not necessary. Some will want to tip anyway; let 'em. Just be open about the whole thing so no one feels cheated. Which is sounds like is what they're doing now. Expensive way to learn that lesson, though.

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