A California federal district court granted summary judgment to Hyatt Corporation against a class of former employees who alleged that they were entitled to accrued vacation time from Hyatt after Hyatt laid them off, indefinitely, at the start of the COVID-19 pandemic. The judge found that by laying the employees off rather than terminating them, Hyatt had not severed the employer-employee relationship, and therefore they were not eligible for a payout of their accrued time. The case is Karen Hartstein v. Hyatt Corporation et al., case number 2:20-cv-04874, U.S. District Court for the Central District of California.
Due to the pandemic, Hyatt furloughed thousands of California workers in March 2020, offering to pay out their accrued vacation time and paid time off upon request. Employees also received cost-free health insurance coverage and access to the complimentary hotel room program, which provided a certain amount of free hotel stays per year. About three months after the layoffs, Hyatt terminated many employees.
Former employees sued Hyatt in April 2020 for failing to pay overtime, compensate them for unpaid wages while furloughed, and provide correct wage statements. The employees also brought claims alleging unfair business practices under the Private Attorneys General Act. In May, a California federal district court judge certified three subclasses of former employees, as follows:
- Furloughed employees who did not receive payment upon ending their jobs
- Furloughed employees who did not receive vested nondiscretionary hotel room bonuses
- Hourly employees who received the hotel bonuses but requested overtime compensation for those bonuses
