In Harstein v. Hyatt Corp., the Ninth Circuit Court of Appeals held that Hyatt Corporation (“Hyatt”) violated California law, which requires the payment of all wages at separation, when one of its hotels failed to pay employees their accrued vacation pay after furloughing them in the early days of the COVID-19 pandemic.
In March 2020, the director of human resources for the Hyatt Regency Huntington Beach told employees that they “will be furloughed/temporarily laid off from their employment on March 24, 2020,” and expressed hope that the hotel’s business would return to normal in eight to twelve weeks. The director of human resources noted the hotel would continue employees’ health benefits through April and May 2020, and pay accrued vacation time out at employees’ request, even though Hyatt was “not separating anyone’s employment at [that] time.” In June 2020, Hyatt sent another letter informing employees that the furlough would become a layoff, and effective June 27, 2020, the employee’s employment with Hyatt would cease. Hyatt also informed its employees that they would receive all of their accrued, but unused vacation, and floating holiday pay, per California law.
Karen Harstein filed a class action complaint and a claim under the Private Attorneys’ General Act (“PAGA”) against Hyatt in the early months of the COVID-19 pandemic in Los Angeles County Superior Court. Hyatt removed the case to federal court. Her primary theory of liability was that Hyatt failed to pay...
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