Ramirez v. Marriott International, Inc.

Background

Humberto Ramirez sued Marriott International, Inc. and The Ritz-Carlton Hotel Company, LLC, individually and on behalf of proposed class and collective members. Ramirez alleged that he worked as an in-room dining server at the Ritz-Carlton, Westchester, from 2015 through November 2019. He alleged that the defendants charged customers an 18% service fee and a $5.00 delivery fee, but did not pay all of those proceeds to the non-managerial employees who served the food and beverages.

Ramirez’s fourth claim alleged that the defendants violated New York Labor Law § 196-d. That law generally prohibits an employer from retaining gratuities or charges represented as gratuities for employees.

Motion to Dismiss

The defendants moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim. They argued that disclosures on the in-room dining menus informed customers about the nature and distribution of the service and delivery fees. The disclosures stated that the hotel retained all delivery fees for administrative and other costs and stated that an 18% service charge would be distributed to servers and/or order takers.

The defendants also argued in their reply brief that Ramirez had not identified a specific day or week when he did not receive the full portion of the 18% service charge to which he claimed entitlement.

Documents Considered

The court declined to consider samples of guest receipts and weekly pay reports submitted by the defendants because those documents were not attached to or incorporated into the complaint and were not integral to the allegations. The court determined that it could consider sample menus because the complaint referred to the menu disclosure language. The court nevertheless stated that it did not need to rely on those menus to resolve the motion.

Court’s Analysis

The court concluded that the defendants’ notice argument did not address the central issue at this stage. The issue was not whether customers were adequately informed that the delivery fee was retained and that only the service fee was treated as a gratuity. Instead, the issue was whether Ramirez had adequately alleged that the defendants failed to remit the entire service fee to him and other in-room dining staff. The defendants did not dispute for purposes of the motion that the service fees were gratuities under Section 196-d.

The court also rejected the argument that Ramirez’s allegations were insufficient because he did not identify a particular day or week of underpayment. The court stated that this argument raised a factual dispute that could benefit from further factual development and discovery. Resolving such factual disputes is not appropriate on a motion to dismiss.

Disposition

The court denied the defendants’ partial motion to dismiss Ramirez’s fourth claim for relief under New York Labor Law § 196-d. The court directed the defendants to file their answers within 14 days and directed the Clerk to terminate the pending motion sequence at docket entry 43.