The U.S. Court of Appeals for the Third Circuit has ruled in a significant class action employment lawsuit involving hotel workers' claims over gratuity fees collected from resort guests. The case, *Chelsea Henkel v. Highgate Hotels, LP; Cove Haven Inc.* (Nos. 24-2984, 24-3099), centers on allegations that the resort operators failed to properly distribute gratuity fees paid by guests to the employees who provided services.
Chelsea Henkel filed the lawsuit on behalf of herself and others similarly situated against Highgate Hotels, LP and Cove Haven Inc., asserting both federal and state causes of action. The case originated in the U.S. District Court for the Middle District of Pennsylvania under case number 3:15-cv-01435, with District Judge Jennifer P. Wilson presiding.
The class action includes more than 30 named plaintiffs representing hotel and resort workers, including Lisa Hastings, Leonora Mocerino, Craig Mocerino, Lizeth Larkin, Noelle Androne, Tammy Bradley, Christopher Carroll, Christopher Colella, Dennis Considine, Ganesa Culic, Milan Culic, Michael Czartosieski, Veronica Gibbons, Susan Gruber, Jessica Guratosky, Veronica Harr, Jenna Hastings, Desiree Herzog, Robyn Klim, Gena Kline, April Lescio, Christina Lombardi, Jocelyn Loriz, Jose Matos, Rebecca Morris, Joyce Parola, John Rodriguez, Erin Schuman, Paula Strada, Blake Suhr, Katie Wasco-Hynak, Mark Wolff, Peter Ventimiglia, and Heather Yeager.
The dispute arose from the resorts' alleged practice of collecting gratuity fees from guests without properly sharing the proceeds with employees who provided the services that warranted the tips. This practice forms the basis of the workers' claims that they were unlawfully deprived of compensation they rightfully earned through their service to resort guests.
At the district court level, the case proceeded through various stages of litigation. The District Court denied the resorts' motion for summary judgment on the unjust enrichment claim, indicating that factual disputes remained that required resolution at trial or through further proceedings. The ruling suggests the court found sufficient evidence to support the workers' allegations that the hotels improperly retained gratuity fees that should have been distributed to employees.
The case reached the Third Circuit through dual appeals numbered 24-2984 and 24-3099. The first appeal (24-2984) was filed by the worker plaintiffs, while the second appeal (24-3099) was filed by the defendant hotels, Highgate Hotels, LP and Cove Haven Inc. This cross-appeal structure indicates that both sides were dissatisfied with aspects of the district court's rulings and sought review by the federal appeals court.
The Third Circuit panel consisted of Circuit Judges Shwartz, Matey, and Fisher. The case was submitted pursuant to Third Circuit Local Appellate Rule 34.1(a) on Oct. 1, 2025, and the court issued its opinion on Jan. 20, 2026. Circuit Judge Matey authored the opinion for the panel.
The litigation has been ongoing for over a decade, with the original complaint filed in 2015 in the Middle District of Pennsylvania. This lengthy timeline reflects the complex nature of class action employment litigation, which often involves extensive discovery, motion practice, and procedural disputes before reaching final resolution.
Highgate Hotels, LP operates numerous hospitality properties across the United States and internationally. Cove Haven Inc. operates resort properties, including romantic getaway destinations that typically charge service fees and gratuities as part of their all-inclusive packages.
The case represents part of a broader trend of employment litigation in the hospitality industry, where workers increasingly challenge practices related to tip distribution, service charges, and mandatory gratuity policies. Hotels and resorts often implement automatic gratuity systems, particularly for group events, banquets, and all-inclusive packages, leading to disputes over how these fees should be distributed among staff.
The workers' claims appear to center on theories of unjust enrichment, suggesting that the hotels were improperly retaining money that guests intended as compensation for employee services. Such claims typically require plaintiffs to demonstrate that the defendants received a benefit under circumstances where it would be inequitable to allow them to retain it without compensation.
The Third Circuit's ruling in this case could have implications for other hospitality workers facing similar issues with gratuity fee distribution. The court's analysis of the unjust enrichment claims and any guidance provided regarding the proper handling of guest-paid service charges may influence future litigation and industry practices.
The opinion was marked as "not precedential," meaning it will not serve as binding precedent for future cases but may still provide persuasive guidance to courts and practitioners dealing with similar disputes in the hospitality employment context.
The resolution of this long-running litigation will determine whether the worker plaintiffs will receive compensation for allegedly improperly retained gratuity fees and may influence how hotels and resorts structure their service charge and gratuity policies going forward.