Hotel Online 
News for the Hospitality Executive

A Class-Action Lawsuit Against Kahala Hotel & Resort, Hawaii, Alleges Resorts
Tipping Policy Deceptive; Improperly Kept Tips Intended for Employees

By Rick Daysog, The Honolulu AdvertiserMcClatchy-Tribune Regional News

Dec. 11, 2009--Thousands of customers of the Kahala Hotel & Resort are now part of a lawsuit alleging that the hotel's tipping policy was deceptive.

Circuit Judge Gary Chang yesterday granted class-action status to a 2008 suit by local resident Jason Kawakami, who said the hotel charged him more than $4,800 in service fees but did not disclose that only portions of the fee would go to hotel employees.

The ruling increases the potential damages that the hotel would have to pay if it loses the suit. According to Kawakami's attorneys John Perkin and Brandee Faria, more than 4,300 customers have been billed for the service fees by the hotel.

"This really gives us a chance to pursue the claims on behalf of all consumers who have been hit by the service charge," Perkin said.

Lisa Cataldo, attorney for the hotel, could not be reached.

The suit is one of several in state and federal courts alleging that local hotels improperly kept tips intended for its employees.

Under state law, hotels and restaurants must distribute service charges for food or beverage service to employees, or clearly disclose to customers if the service charges don't entirely go to employees.

Perkins said the law allows victims to recover up to triple damages.

Kawakami's lawsuit alleges that he was improperly billed for service charges of 19 percent when he held his wedding reception at the Kahala Hotel in July 2007. They included a service charge of $3,106.46 for food and $1,704.49 for beverages, the suit said.

Not all of the gratuities went to hotel staffers, and Kahala officials did not disclose that the hotel service workers would not receive the entire amount of the tip as required by law, the lawsuit said.

Reach Rick Daysog at


To see more of The Honolulu Advertiser or to subscribe to the newspaper, go to

Copyright (c) 2009, The Honolulu Advertiser

Distributed by McClatchy-Tribune Information Services. For reprints, email, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. OTC-PINK:KAHL,

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.