07/03/2007

GT Resort workers file $1M lawsuit

By VICTOR SKINNER

vskinner@record-eagle.com

TRAVERSE CITY — A lawsuit alleges the Grand Traverse Resort & Spa could be liable for more than $1 million withheld from employees' paychecks between 2000 and 2006.

The Acme-based resort, one of the county's largest employers, violated state employment and wage laws when it imposed $150 bi-weekly paycheck deductions on scores of health spa employees to help fund marketing efforts, according to a class-action lawsuit filed Friday in 13th Circuit Court.

"Employees started complaining approximately a year ago which resulted in a disclosure by the resort that the resort has been unilaterally and without permission deducting $150 from each paycheck and had been doing so for at least six years. That $150 was apparently being deducted as a marketing expense by the resort,” said Traverse City attorney Enrico Schaefer, who represents over 150 current and former employees involved in the dispute.

"A Michigan statute makes it unlawful for employers to deduct amounts from an employee's paycheck without their full, free, and written consent. This particular deduction was never disclosed to employees and they never even knew about it,” he said.

Schaefer alleged the resort also likely docked spa workers' tips and product commissions — a violation of the Michigan Sales Representatives Commission Act. Under the law, the resort could be liable for up to twice the amount of the commissions plus attorney's fees, Schaefer said.

"The policies at the resort have largely precluded employees from knowing which customers have tipped them and how much or how many product sales they are responsible for,” he said.

The lawsuit exceeds $1 million and stems from a policy established by the resort's former owners KSL Recreation Inc. when the spa opened in 1999, Schaefer said. The Grand Traverse Band of Ottawa and Chippewa Indians purchased the resort in March 2003 and eventually canceled the policy in December 2006, he said.

"The one issue that is out there for the tribe is whether or not they are going to claim sovereign immunity and thereby allege that they are immune from Michigan labor and employment laws,” Schaefer said.

Resort spokesman J. Michael DeAgostino acknowledged the lawsuit, but wouldn't discuss the case.

"We are not going to have a whole lot to say for two reasons,” DeAgostino said. "One, we don't have much to say about litigation. And two, we don't have much to say about matters that involve our employees.”

Schaefer said he plans to meet with the band's attorneys in about two weeks to "see if we can work through this and come to some sort of resolution.”

"The main reason we filed the lawsuit is the statute of limitations, but thus far the tribe has been very open to working with us on these issues,” Schaefer said. "All of these pay issues are carry-over policies from (previous ownership)... which appeared to have simply perpetuated without the tribe fully understanding or appreciating the issues after they purchased the resort.”