Davenport Hotels agreed to $3 million class-action settlement a month before announced sale

The owners and operators of the Davenport chain of luxury hotels agreed in November to pay $3 million to settle a legal claim brought by banquet workers who argued they didn’t receive payment from service fees charged by the hotelier for events held between 2018 through 2020.

Davenport Hotels did not admit to any fault before making the payment, and a spokesman for the group of hotels that announced this week a pending sale to a private capital firm said the settlement would have no effect on closing.

“The sale should be complete in the next 30 days and this particular lawsuit was already settled in the past,” Matt Jensen, corporate director of sales and marketing for Davenport Hotels, wrote in an email.

The class action lawsuit filed in March in Spokane County alleged the ownership group collected service fees at its Historic Davenport and Davenport Grand locations between March 23, 2018, and April 8, 2020, that were not paid back to employees in violation of state law.

Washington law requires such automatic charges for “food, beverages, entertainment or porterage” and the percentage paid directly to employees must be disclosed to the customer. The law has been in place since at least 2007 and was most recently updated as part of a voter’s initiative on the minimum wage in 2016.

Prior to settling, Davenport Hotels argued, among other defenses, the events worked by employees did not qualify as banquets under state law and there was no prohibition in the law on the hotel keeping the service charge amount.

Two banquet workers filed the lawsuit, hiring the legal services of the firm Thomas & Solomon LLP, based in New York, according to court records. A phone call to their offices was not immediately returned Thursday.

The firm identified 272 employees affected by the settlement. The $3 million amount included $750,000 in attorney’s legal fees. The class members received automatic payments based on the hours they worked, according to court records.

The settlement agreement was approved by a judge Nov. 5.

Walt and Karen Worthy, owners of the Davenport hotels, announced earlier this week the sale of their properties to KSL Capital Group, a Colorado-based private equity firm specializing in tourism and hospitality assets. A sale price was not disclosed.